Why You Should Consider Renting Your Vacation Home
And why should you consider renting out your second home to vacation travelers? Simple economics.
If you decide rent out your vacation home, it could potentially not cost a dime after your down payment.
Christine Karpinski, author of How to Rent Vacation Properties by Owner and Profit From Your Vacation Home Dream, has come up with a simple break-even formula for vacation rental properties. "It's not a high level formula that accountants use to factor in tax advantages or other complicated formulas," she says. "I just want to know how many greenbacks it is going to cost me out of my pocket each month." She explains her simple formula, "If your mortgage payment is less than or equal to one peak week that you can rent your property for and you can rent that property for 17 weeks a year then that property will break even."
She goes on to give an example, "Let's take a property that's mortgage payment is say $2000 a month. If you can rent that property for $2000 a week and can rent it for 12 weeks, which regardless of where you own (on the beach, in the mountains, on a lake, or in the middle of a prairie), there's typically 12 peak weeks. And most properties are rented fully those 12 weeks. So if you can rent your property those 12 weeks you can pay your 12 mortgage payments. And then the extra costs associated with ownership like phone bills, insurance, cable, and power can usually be paid for by five extra weeks rentals. So if you rent your vacation home for 17 weeks, it's paid for itself."
Another reason to rent your home is that "It's better to have a property be rented than to sit empty because insurance companies hate properties that are unoccupied," Christine says. "They would much rather see a property that's unoccupied more often, which is contrary to what most people believe. Many second homeowners think 'if I'm going to switch my vacation home into a rental home, the insurance ramifications are going to be much greater.' Well that's not necessarily true. Yes, you'll have to take out some extra liability, but really your property is going to be occupied, which the insurance companies like to see."
Related Tags: real estate, second home, vacation rental
For more tips and advice for vacation rental owners and those thinking about renting their second home, visit the Owner Community at HomeAway.com, a great resource featuring educational articles, vacation rental news, owner polls, monthly newsletters, and a weekly internet radio show by bestselling author Christine Karpinski.
Your Article Search Directory : Find in ArticlesRecent articles in this category:
- 5 Reasons to Buy Jasper Real Estate
Jasper is a small town in North Georgia and it is growing rapidly. Since North Georgia Foreclosures - Ellijay Real Estate
Ellijay Georgia has always been known for it's outdoor activities and seasonal festivals. Downtown E - How to Deal With Blocked Drains
A blocked drain is an occurrence that happens eventually to all households. You may have experienced - The Benefits of Hiring a Plumbing Consultant
Your dream home may not always be brand new, with fresh paint and home essentials. There are certain - The Worst Mistake You Can Make When You Apply to Rent a Home
A whole new class of people has become renters and potential renters in America during the last thre - State of Individual Real Estate Markets
Everybody is well aware of the hit that the real estate market has taken over the past three years. - Thoughts on Avoiding the Landlord Trap
I've heard several people say they would never invest in a multifamily rental property because they - An Idea to Increase the Bottom Line of Your Investment Property
Are you pretty sure that you've already maximized the income coming from your property? If you've cl - Finding the Value of a Piece of Investment Real Estate
There is a lot of confusion about how much investment property is really worth. We'll look at three - Arkansas Land For Sale - Search Engine Optimization and Your Website
If you have Arkansas land for sale and are interested in advertising it on your website I have a few
Most viewed articles in this category:
- How High Did Home Prices Really Go
The U.S. Census Bureau released data on Tuesday that revealed where the nation's hottest markets wer - New Homeowners Tips for Household Safety
With so many items on their ¡°buying a home¡± checklist, few homeowners take into considerati - Truth About VA Foreclosures
Many people now days are finding themselves out of work and not being able to make the mortgage paym - Avoid Rookie Real Estate Investing Mistakes
When Robert Kiyosaki, author of the Rich Dad book series, bought his first property he was, of cours - Finding The Perfect Roommate On Craigslist
Craigslist, Roommates, and The Concerns Craigslist is "great" when it comes to looking for housing - The Forgotten Secret To Selling Property - Simple, Quick And Cheap
Why spend big dollars trying to get people to drive a long way to see your house, when your best pro - Get Amazing Results Selling Real Estate Online
This is the age of the internet. Why not take advantage of the widespread use of the internet to ad - Dallas Real Estate Information
In the United States, Dallas is considered as the second leading state according to the area. If any - The Largest Private Equity Indian Real Estate Deal
In the largest private equity deal won by the real estate sector, Morgan Stanley Real Estate has inv - Fractional Real Estate Ownership
Fractional ownership of vacation ski condos is growing in popularity. Park City Utah a popular ski t