Pains and Joys of Owning a Vacation Rental Property

Growing up I had the blessing to see a family owned cabin in Munds Park which happens to be located just just outside of Flagstaff, Arizona. We would visit our cabin 5-7 times each year alongside one another. I have very fond memories within the cabin once my parents made a decision to sell it about 6 years ago I immediately began trying to find a cabin of my very own. I desired to provide the children with similar possiblity to make memories with a family cabin because i had. We started searching for a cabin or land in order to develop a cabin June 2006. We quickly found some land in Pinetop-lakeside Arizona that is based in the white mountains and approximately 3 hours from the Phoenix area. It had been a modest 8,000 square foot lot but we loved how close it was to the movie theatres, restaurants, ski resort, lakes, plus more. We decided against making a site built home and placed a new manufactured home on the lot which we had been capable of complete by November 2006. We figured we might make use of the cabin a number of years and would be able to market it for a profit in the future (yes, this has been through the real-estate boom so you can imagine exactly how much underwater I am). I can\’t describe the fun there were during our first journey with the children to check out our brand new cabin. There was so much fun our first-time together our kids and ourselves couldn\’t wait to come back. We took the 3 hr journey to our own cabin as much week-ends as possible. After our newbie of ownership as well as realization we couldn\’t sell the cabin, much less give it away, there was a dilemma on our hands. We had the ability to scrape together enough money to pay for cash with the cabin. What we didn\’t realize is just how expensive a cabin without having any mortgage would remain. Whether a cabin is paid off or not you still have to pay for property tax, property insurance, basic utilities, frozen pipes, re-staining the porch and several other expenses. We had no desire to be out of pocket on a cabin we merely visited Five times per year so we quickly jumped online to find a strategy to rent our cabin. This is where we met VRBO commonly known as Vacation Rentals By Owner. What really sold us on this vacation rental website was the fact there was several other friends who swore by it. We paid our initial $299 yearly fee and off we were praying to rent our cabin. Over many years we have had great success using VRBO and we are capable of pull in roughly $8,000-10,000 each year. Some could imagine how wonderful it would to bring in this type of money. We thought the same until we realized there was no money leftover at the end of the entire year. Don\’t misunderstand me, We are very grateful to get the income given that it allows us to break even each year rather than being broke. It is amazing how expensive it turned out to rent our cabin. If you think about it though, the greater you rent the cabin the greater utilities costs as well as more wear and tear occurs. Hiding within the shadows were all additional negative aspects of renting our cabin that we soon discovered and have never been able to chase away. After owning our cabin since 2006 we\’ve ultimately arrived at a conclusion we would prefer to be renters of a vacation rental property as opposed to owners. I\’m sure several of you\’ve got a different view, which I would like to hear, however, for our little growing family of 6 it\’s just too much to deal with. I have listed some good and bad points of being a vacation rental property owner we\’ve experienced. Purchasing a property has never been something we need to do on a whim so take some time, study your options, research your finances and interview anyone you can find about their experience. This is a quick good and bad points list of having a vacation rental property.

PROS

1. Vacation Property – you no longer need to pay anyone to rent a house you might or may not like. You\’re able to decorate the property to your liking to make any changes without having to ask for permission. You have complete control of where you buy your property and what it will look like.

2. Potential Rental Income – we successfully rent our cabin 10 roughly times each year using VRBO but I\’m confident that we rented it additional days we may finally obtain a profit. Depending on the spot where you buy the property and how its purchased you may well be capable of producing a profit quicker than we do.

3. Tax write-offs – If the property is purchased for an investment and/or rented annually there could be potential tax deductions you are able to receive. Obviously I\’m not really an accountant which means you would have to inquire additionally from the professional.

4. Bragging rights / Bucket List – As funny as it can read I\’m sure most people invest in a vacation rental mainly for bragging rights or even to cross it off a bucklet list. The thought of owning a cabin must have been a great fantasy I had likewise that had been a part of the reason I acquired one.

5. Investment – If you buy the investment within the perfect location and timeframe there\’s a chance you\’re capable to sell the vacation rental for a profit a little while at some point.

CONS

1. Maintenance – I\’m sure a lot of you thinking about purchasing a vacation property currently own a home. So then I\’m sure you might have something each month in the house that has to have a little TLC. We found the repair of our cabin possesses a hefty yearly expense from re-staining our porches or siding to rushing out a plumber whenever the pipes freeze and break all through the winter. Often there is a sudden expense.

2. Handling renters – Now this will only be a headache if you choose to rent your vacation property. I have many fantastic renters live in my cabin but there\’s always several nightmare renters every year I must overcome over the dumbest of complaints. Honestly, even getting a perfect renter still requires an initial conversation, a request for money, a signed rental agreement, vacation rental instructions, and much more. Presently when renting our cabin throughout the winter I have a daily fear my renter is going to call me and inform me the heater broke or possibly a pipe burst. There can be an unnecessary stress without anything even occurring.

3. Resell value – I purchased our cabin within the peak of the housing boom and currently it\’s worth roughly $60,000 lower than I paid for it. What really hurts is when I remember I paid cash for the property. I\’m not going to say your resell value will drop however it is a risk you\’re taking when purchasing any type of property.

4. Vacant not being used – We are only able to use our cabin about Five times per year. When we are there it\’s really a fantastic time together. If we aren\’t there I just sit and think of my vacant cabin not utilized and ask myself why I bought something with such little use. I could have put that large chunk of money on my personal home and dramatically reduced or almost eliminate my mortgage as a substitute for buying this other piece of property. It\’s really a painful thought, I promise.

5. Mortgage – Lots of people buying a vacation rental property don\’t have the luxury of paying it off therefore yet another mortgage hangs over their head. A mortgage loan just isn\’t something you can easily dispose of very easily. Consider, a mortgage loan, TLC, and everything else occurs might be detrimental to your wallet.

6. Lawsuits – This absolutely should probably are categorized as renters but I want to ensure it is it\’s own category. One time I had a renter who slipped on ice on my small front porch and broke his leg. His wife called me a couple of times telling me what occurred and also just how it occurred due fishing for money from me. I quickly got out my vacation rental agreement to ensure I had created the right language incorporated but that also isn\’t foolproof. Thank goodness they never attempted to come after me personally but where do you think my stress level was for several months? Having a vacant property comes liability.

7. Basic Utilities – Again, this ought to probably belong to another category above however i thought it ought to be mentioned separately. To improve my possibilities of renting our cabin when not in use we provide cable television, Internet, toilet paper and soap (consider that), and also the basic utilities. I\’ve got a monthly expense starting the first day of each month whether I rent the cabin or not. The expense is varying from $100-200.

8. Maid Service – Since I live 3hrs from the our cabin I have to hire a maid service to clean after each renters stay. The charge is $75-85 for a 3hr clean. They call me afterwards and report on their findings and let me know if its going to require me to pay an extra hour or not depending on how trashy the renter was. Additionally they restock some of our basic supplies. This is yet another task you have got to manage in addition to anything else.

9. Emergencies (plumber, handyman, glass repairman, electrician, snow plow) – I have a big list of emergency contacts which I have used a couple of times. It has never been fun when you have to call one of those contacts but it really doesn\’t help when one isn\’t available. I got smart after the first couple of times of having nobody to consult but Google thus We have no less than 3 contacts for each emergency category

10. HOA – I actually built a cabin where an HOA exists. An HOA may either be amazing or possibly a headache and I\’m sure you have all experienced both types. Often there is a yearly fee associated with a HOA and certain demands that must be met.

11. Location – How are you affected when a few years in the future you want to buy a seaside vacation property as opposed to a mountain property. Oops, can\’t really pick-up the property and move it to a new state (well you probably could but you know what I am talking about). Also, what occurs as soon as the vacant lot adjacent to you now is under construction and your views now are gone?

12. Vacation Website Rental Fees – You will want to promote your vacation rental property somehow if you opt to rent it. I started advertising using VRBO for $299 on a yearly basis and am now paying over $500. Yes my yearly rentals cover the charge yet it\’s still a headache to manage but yet another expense.

My cons list could go on and on. What amazed me with regards to the pros list was how little I had been able to make a note of. Honestly, following the first two points listed above I had to question my wife which helped me to consider the other 3. For us, we\’d not likely buy a vacation rental property again unless we\’re able to utilize it a lot more than 5 times annually. Remember Five times yearly is my average, I was only able to utilize it Three times this past year. We always tell ourselves how frequently we are likely to make use of it but life comes at you quickly and plans change. We realized we\’d prefer to be a renter so we will pay a nightly rate to stay wherever and whenever we are wanting to leave we\’re able to throw our towels and sheets on the floor while not having to be worried about having it spotless. I manage our property so the best part to me about not having a vacation property would be leaving all of the stress of owning and renting the home behind me. I desire to go on trip to relax and do nothing at all, instead of worrying and losing sleep over owning such a luxury. If you are the ledge deciding between owning a vacation rental. Lets hope this helps with the decision. If you find this post helpful please leave a comment and tell me your thoughts.

Attention all Vacation Rental Owners, I would love to hear what your pros and cons are in regards to owning a Vacation Rental Property. This article, Pains and Joys of Owning a Vacation Rental Property has free reprint rights.