Vacation Home Business
During financial crisis, having extra source of income for the family’s budget is a great plan.
One of the extra backup plans that you might want to put to work is turning your vacation home into a rental one.
Owning the Vacation Home of your Dream
It is no longer impossible to own the vacation home of your dream. However, there are a few basic steps that you must take into consideration before buying one so that your good dream will not become a financial nightmare to you.
- Determine your finances before closing the deal. This will make you see if your vacation home will be a financial burden to you or not.
- Do not just rely on the rental income of your vacation home to cover its entire cost.
- Study the location, the pricing trends and time horizon. You can take the equity of your current home for the down payment of your vacation home but this is only good if the market is rising. If the market falls or flattens, you’ll be in big trouble.
Rental Vacation Home
When starting a vacation home business rental, the first step is to write a good business plan before you purchase a vacation property. There are many people who are looking for a beachfront property or just a cabin to rent during vacation time. This fact provides a large opportunity for the owner of the vacation home to earn profit. The rent can cover the cost of the vacation home but you must not entirely rely on it because if there are some advantages of renting a vacation home, there are also some disadvantages.
Advantages
- The rent increase potential is great. For example, if the ongoing lease rate is $1000 per month but the night rate is $150, then you can get $1500 for 10 nights.
- The vacation home is available and the owner can stay there when it is not rented by others.
- There can be a short-term renter and a longer-term renter.
- The owner doesn’t have to wait for the ending of the lease if he or she wants to sell the vacation home.
Disadvantages:
- There can be multiple arrangements for rent and therefore means more work.
- Cleaning is required regularly especially after each client.
- Your vacation home is always exposed to large volume of customers who are a stranger to you.
To-do List for Vacation Home Business
- Get adequate insurances as well as address liabilities.
- Clean and remove all valuable items in the house or lock up your personal belongings.
- Determine the rental rates of your competitors and deposit all requirements.
- Arrange it for the advertisement to wide range of audiences.
- Get someone who can manage your property well.
- Decide on the method of payment from the renter.
- Make rental agreements, documents, and instructions for the usage of home, guests’ requirements and rules.
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