Renting out your vacation property is a financial decision that makes a whole lot of sense, and one that can earn you a nice chunk of additional income. In some instances, the rent amount may not cover the mortgage payments but regardless, the tax benefits and income generated from a rental property is almost always worthwhile.
Furthermore, this is often a better option than selling a home. You could be using an idle piece of property to generate some extra income. With this in mind, we will take a look at why you need to consider renting out your vacation property and some common benefits from the process.
THE DECISION TO RENT OUT A VACATION PROPERTY
For many vacation property owners, there is simply no way to be in two places at the same time. This will mean that the property is sitting idle and going to waste. Similarly, it is often the case that an owner is unable to sell this property for a sufficient price and hence, renting out their vacation property is a much more sensible solution. Some vacation property owners are simply looking for an easy way to improve cash flow and renting out a vacation property can be a highly profitable way to do so.
THE DOWNSIDE TO RENTING A PROPERTY
As you might expect, renting out a property requires a great deal of time and effort. Whether this refers to carrying out repairs or dealing with listings, the tasks are many and this is especially true in the case of ongoing maintenance or assisting renters. On the other hand, there is always the option of working with a property management firm who can take care of these issues.
Aside from the above, some property owners are concerned that the building or furnishings will incur damage from those staying at the home. Conversely, renting your vacation property is often a chance to improve conditions and keep on top of anything which needs attention.
Here are the 10 reason you should rent out your vacation property.
1. TAKE ADVANTAGE OF TAX BENEFITS
As already mentioned, renting out your vacation property will enable owners to offset their rent or income with tax breaks. However, this is also an opportunity to use the income from this rental property to cover other expenses such as insurance and mortgage payments.
2. CARRY OUT VACATION HOME IMPROVEMENTS
Although some owners may not be able to sell up, renting out your vacation property is the perfect excuse to renovate the home. In fact, many of the expenses incurred during these improvements are likely to qualify as tax deductions. On a slightly different note, having tenants in the property is likely to help you or the property manager to keep tabs on the condition of the home.
3. SOMEONE ELSE MANAGES THE PROPERTY
As you may know, many vacation property owners choose to work with a property manager. For this reason, when it comes to listing the property, vetting guests, or carrying out maintenance, there is no need for the property owner to get involved. In this sense, for a small monthly fee, homeowners can generate an extra income without needing to lift a finger.
4. YOU NEVER NEED TO BE THERE
In fact, when renting out your vacation property, you never need to be there. From maintenance and bookings to inquiries and payments, property management firms can take care of all the business while you get on with your life.
5. NO RENTAL INCOME REPORT NEEDED
If you rent out your vacation property for less than fifteen days in a calendar year, there is no requirement to file a report on your income taxes. At the same time, it must be remembered that if you do not file this same report, you will be unable to deduct any expenses from taxes.
6. YOU CAN STILL USE YOUR RENTAL PROPERTY
Even though this is now treated as a rental property, you still have the option to stay in this home whenever you want. In this sense, the property is still your private hideaway and you simply choose to rent it out to earn some extra income throughout the year.
7. THE OPPORTUNITY IS NOW
At a time when almost everything is online, there has never been a better opportunity for renting out your vacation property. That is to say, property management firms are extremely experienced when it comes to listing the property and finding renters. That being said, there is always the option to do this for yourself, although this is certainly a time-consuming task.
8. GETTING STARTED IS EASY
While there are several formalities for renting out your vacation property, this process of getting started in this business is pretty straight forward. You will need to inform the insurance company that this is now a rental property but otherwise, most of the work involved involves preparing and maintaining the home.
9. RENTING OUT YOUR PROPERTY IS BETTER THAN SELLING
Renting out a property is often an option for owners who are unable to sell the property due to a low valuation. At the same time, there is a strong likelihood that the value of your property will grow over time and this effectively makes a vacation home a sound investment.
10. PLANNING FOR RETIREMENT
Needless to say, if you do not sell a vacation property, you will still have this as an option at retirement. However, if you ever did decide to sell your initial property, you will then have the opportunity to use this equity to pay off the mortgage on your vacation home. That being said, let us stay focused on the present and not so far down the road!
RENTING YOUR VACATION PROPERTY WITH MINNESTAY
As you can see, there are many benefits to renting out your vacation property. While you can absolutely take full responsibility for the entire process, employing a property management firm can make this a rather seamless process. Moreover, it makes perfect sense to take advantage of the tax breaks and start generating an extra income as the value of your vacation property continues to grow.