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Benefits of Renting a Second Home as a Vacation Rental
May 1, 2018
Have you ever thought of turning your second Orlando home into a vacation rental home? Well, that could end up being one of the best decisions you will ever make. Financially speaking of course.
Taking a look at the economics of the vacation home industry in the United States, it is estimated to be worth $100 billion. And that number is expected to skyrocket to a staggering $170 billion by 2019.
Trust me, any person involved in property management wants to be part of those numbers.
It can surely be intimidating to plunge into the vacation rental management industry but you have to keep in mind that vacation rental homes, especially in Orlando, have gained a lot of popularity. However, it would be wise to ask yourself a few questions before you rent out your property:
• Do people want to visit my second home city? Orlando is a grand vacation destination.
• Is it legal? Short/long term rentals are allowed in Orlando, Florida.
Now let’s get to the fun part, the benefits of renting out your second home:
1. You will earn a steady income
If you were to rent out your home to one family all year long, you would be guaranteed a steady flow of income. That will come as a great advantage to you especially if your second home is already paid off.
In a popular vacation destination like Orlando, even if you don’t have one consistent customer, you are guaranteed of an influx of tourists who need a place to stay all year round.
2. You can cover your expenses
Bills, bills, and more bills are part and parcel of the average American’s life. Your second home could help you cover those expenses when you rent it out to a good guests. You will manage to cover the insurance costs, maintenance, electricity and water bills, and costs of hiring a property management or vacation rental management company to manage the property for you.
In addition, if you are still struggling to meet the mortgage payments on your second home, the rental income could meet those payments.
3. You will enjoy some tax benefits
If you are renting out your second home as a vacation home, you can enjoy some tax deductions based on the period you are renting it out for. Brilliant, right?
If you rent out your second home for only 14 days a year, you aren’t obliged by the IRS to report your rental income even if you cash out big time.
If you rent it out for more than 14 days a year and you spend some of your time in it, you must report your rental income. However, you are allowed some tax deductions on your expenses like utility bills, property tax, mortgage interest, insurance premium, etc.
4. Build on your networks
Renting your home to short-term guests means that you will be able to interact with people from different walks of life. You will meet a bunch of interesting guests who can also teach you a thing or two about financial planning or the real estate market.
You could also happen to rent your house out to some big shots who could offer you or your family new job and business opportunities.
5. You will learn to be a good landlord/ property manager
Renting out your property can help you build good leadership skills especially when it comes to handling your renters. You will understand the different type of renters that you get and with time, you will be able to spot a bad renter from a mile away.
No matter how many books you read on property management, nothing will get you ready for real estate than actually renting out your property.
What’s more is that you don’t need to take on vacation rental management as a full-time job. You can focus on your other duties and get to be in property management only in the summer season when business in Orlando is booming.
6. It’s a smaller risk to take on
Unlike other real estate investments, vacation homes are more promising and you are exposed to a lower risk. You will only deal with seasonal renters and you can spend some time on the property when you are not renting it out.
Plus, Orlando vacation homes always reach high occupancy and cost even higher nightly rates.
Interested in Renting out Your Second home?
If you want to use your second home as an extra source of income, go through the following checklist before you start renting it out:
Factors to Consider When Turning Your Second Home into A Vacation Rental.
• Short-term and longterm rental legislation in your city.
• Comparative market analysis of vacation homes in Orlando town.
• Renovation requirements for rentals
• Availability of local property management/ vacation rental management companies
• Taxes and deductions
• Insurance policies and requirements
You have plenty of demands from work, family, and life in general. It is understandable that you may not spend all your time in your second home in Orlando. Why don’t you consider turning it into a vacation home and enjoy some of the investments benefits?
Do not hesitate even for a second to turn your property into a secondary profit point. It would be a shame to have a beautiful home sitting idle and gathering dust when there are plenty of Orlando vacationers who would give anything to stay there.