The vacation rental industry is growing with more travelers choosing vacation rentals over hotels than ever before (49% according to Trip Advisor.) As a result more and more homeowners are choosing to rent out their luxurious vacation homes. If you are considering this option, we have a list of vacation rental pros and cons that will help guide you to the right decision when determining how to best enter the vacation rental market.
Vacation Rental Pros:
There are many upsides to renting out your vacation home.
1. Leverage Unused Time For Income
There are likely many days and weeks that your vacation home is left unoccupied. If you decide to start a vacation rental business you will reap the benefits of watching your home’s previously unused time turn into cold hard cash. It’s this financial upside that is clearly first on the list of vacation rental pros.
2. Offset Mortgage Expenses
Turning your vacation home into a revenue stream can serve as a great way to offset your mortgage and maintenance expenses. According to HomeAway, 49% of homeowners report that their rental income covers at least three-quarters of their mortgage payments. This additional income can also be used to fund upgrades and new amenities. Have you always wanted to add a pool or a larger patio? Feel your bathroom needs a remodel? Go for it. These dreams can become reality with the extra spending money you will earn.
3. Share Your Passion
The opportunity to provide access to the local culture and share the unique experience of staying in your home is one of the most rewarding aspects of renting to like-minded travelers.
4. Support Local Merchants
By referring your guests to your favorite neighborhood markets, restaurants and shops you not only support their businesses, but you also help your guests have a more authentic local experience.
5. Expand Your Horizons Through Home Exchange
There are select rental agents that offer free vacation home exchange when you list with them. Through these programs you can trade unused time in your home for a stay in another family’s vacation villa. Your vacation options expand exponentially as the agent’s portfolio becomes your portal to the world.
Vacation Rental Cons:
There are a few compromises that come with renting out your vacation home however they can be minimized if you plan appropriately.
1. Your Home Is Booked
A rental reservation is indeed a good thing, however there will be times when you’d like to use and you can’t because it’s rented out. To ensure this doesn’t create any conflicts, block out the dates you want before your home is marketed to renters for the calendar year.
2. Additional Wear and Tear
Your home will end up being used more so plan for additional wear and tear on your furniture and other home items. Vetting your guests will help keep this to a minimum, but it should be accounted for as part of your annual budget.
3. It’s a Complex Business
The vacation rental industry is complicated. It’s important to be prepared and educated on how to protect yourself and your business should any issues arise. From late cancellations to injuries that occur on your property, make sure you are buttoned up on the legal side of things. Also, you need to keep a watchful eye on the marketplace. New rental listing sites pop up all the time and consumer preferences change. You want to make sure you are listed on all the right sites and that you are showing up on the top of their pages. Sites are continually tweaking the algorithms that determine rankings so optimizing your listing is a constant.
4. It’s Time Consuming
If you handle the rental of your vacation home all on your own it could end up feeling like a second job. If you’re not looking to make that much of a time commitment, there are many professionals that can help you build a lucrative vacation rental business. Engaging experts not only gives you peace of mind, but will help you continue to enjoy your vacation home for what it was originally intended, a place of rest and relaxation.
As you think through the various pros and cons of the vacation rental business, we’d like to offer our help. Elite Destination Homes is a vacation rental management company that has successfully been marketing an international portfolio of multimillion-dollar luxury vacation homes since 2005. We’ve helped many homeowners successfully launch their homes as rentals and with our free international vacation home exchange, the vacation rental pros clearly outnumber the cons.