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Pros and Cons of Vacation Rentals

Pros and Cons of Vacation RentalsPurchasing a Pelham vacation home can be an exciting idea. It can be your personal vacation spot, and you can rent it out to others to cover expenses throughout the year. In reality, anyone who has ever owned and rented out a vacation home will give you details about the nitty-gritty of it all. Owning vacation rentals has its pros and cons. That’s why, before you decide on vacation rental ownership, be knowledgeable of what you’re getting yourself into.

Pro: Extra Income & Tax Breaks

One of the best outcomes of owning a vacation rental is the extra income you can earn from renting it. Depending on whether you choose to rent it out short-term (days or weeks at a time) or long-term (several months at a time), it could be that your property is able to pay for itself.

Con: Another Mortgage Payment & Expenses

Of course, buying a vacation rental comes with a mortgage payment, insurance, property taxes, utilities, and other expenses. All these points must be taken into consideration when deciding on a vacation rental. Additionally, financing for an investment property can cost more since lenders often require a larger down payment and charge higher interest rates on second homes.

Pro: It’s Yours to Use

A vacation home is at your disposal — since you own it, you can do whatever you want with it. This benefits you most when you visit the particular location often — then you won’t need to stay at a hotel! You can also use the property for business or personal events, meaning you won’t have to pay to rent event space elsewhere.

Con: Marketing and Screening Tenants

If you are not interested in staying in your vacation home for most of the year, you can rent it to potential tenants. Marketing can be a time-consuming task, as is screening potential tenants. This is made more challenging if you plan to rent out your vacation home for days or weeks at a time. Due to the high turnover, it will be hard to find tenants to rent the home year-round.

Pro: Building Your Retirement Fund

One of the best ways to get your retirement fund growing is through investing in rental real estate. Rental property owners often include their rental income or property sale into their retirement plans. The beauty of the real estate is that it can offer safety and growth, unlike other investments like the volatile stock market or the savings accounts that give little interest.

Con: Property Management Takes Time

Owning a vacation rental is no joke — it requires property management, and it will take years before being able to see the rewards of the investment. It’s even more burdensome when you are in charge of keeping your own property clean and maintained, or if your vacation rental is far from your primary residence. A lot of vacation rental owners are taken aback by the time required to prepare for each new tenant, something that rarely happens with long-term residential rentals.


There are many benefits to renting out a vacation home. With the right property management company, you can avoid the most common mistakes encountered by new investors. Would you like to learn more about smart approaches to managing vacation rental properties? Real Property Management Victory has a top-notch team of Pelham property managers to help you navigate the market as well as keep your vacation rental profitable. Contact us online or call at 205-793-0700 today!

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