Owning a second home can provide you both with a vacation home as well as a source of income when you rent it out. Here are your options for using it for these two purposes.
With busy schedules, vacations become a rushed week of driving, sightseeing, eating, and moving from hotel to hotel. The expense of traveling with every member of your family makes family travel prohibitively expensive. Have you priced air travel for a family of five, lately? Even a snatched weekend for two can break the bank.
Enter the vacation rental property. A vacation property could be just what the doctor ordered. Usually located in beach or mountainous or sightseeing areas, vacation homes offer a home-away-from home. Families can drive to the vacation home, eat a homemade meal and sleep in beds made up with sheets and pillowcases from home.
Is it worth it to buy a vacation home? Is the expense of running a second home a good investment... not to mention the second mortgage? Would you feel comfortable renting the home to a complete stranger?
Buying a Vacation Home
The decision to buy a second home may be an easy one. You need a place out-of-town to escape to. The kids want to bring friends on vacation, but staying in a hotel is too costly for more than a family of four. The vacation home becomes the ideal spot for the mom’s scrapbooking weekend or dad’s golf trip with the guys.
Extra beds, comfy furniture, storage for bikes or snowshoes, and more make the vacation home a perfect place for families to hang out with each other. The initial search for the house may be a nerve-wracking. Mom may want to buy at the beach while dad and the kids prefer a lake house. Dad may want a rancher, but mom is insistent on needing the extra bedrooms in a townhouse.
Cost, especially, when buying a house can be a deal breaker. If your family struggles to pay one mortgage taking on a second mortgage is probably unwise. However, with a little research, you may find a vacation property that does not break the bank.
Renting as a Business
With you and your spouse in agreement that buying a vacation home is a go, the next question is “To rent or not to rent.” Renting out their second home might be considered a deal breaker for some buyers. For some the idea of someone sitting on their couch, or eating off their dishes is just too much. Those who want to go to the vacation home every weekend might be inconvenienced by having to check with the realtor about who is renting the house.
For other buyers, renting the house allows them to live in the house when they need it. The rent goes towards the mortgage, and can considerably bring down the cost of owning a second home. Owning and renting out a home becomes a small business.
You could rent out your vacation home yourself, by placing an ad in the paper, posting on the bulletin board at work, or through word-of-mouth marketing to friends and neighbors. Get the word out that you have a beach house and wait for the rental agreements to arrive.
Using a realtor or a property rental company is another option. By farming out the administration of renting, you give someone else the headaches of nonpayment of rent, guests who don’t show up, and damage to the property. For a fee, the property rental company will allow you to use the house as a rental property and vacation home all at once.
Buying a vacation home with an eye to earning a little extra cash via renting could be the difference between buying a home and not. With a little careful planning ahead, you and your family could schedule the weeks and weekends you want to spend at the vacation home. Any other times, the house is available for rent and can serve as an income generator.