Should I Buy a Vacation Home or Rent?
If you love visiting the Outer Banks, you might be wondering right now whether you should rent a vacation home of if you should buy a property instead. For many, buying a home that they can use when they are on vacation and that they might be able to rent out during the other times of the year to other vacationers seems like a good idea. However, it is always a good idea to do plenty of research rather than simply leaping right into the first opportunity to buy.
Let’s look at the advantages and disadvantages of owning a rental property so you can get a better idea of whether it is right for you or not.
Advantages of Buying a Vacation Rental Home
If you love the idea of vacationing in your favorite spot each year, or several times per year in many cases, you might find that buying a vacation home that you can rent out when you are not using it is a good idea. One of the great things about having a vacation rental you own and that you can visit when you want to head out on vacation is the fact that you never need to worry about booking another hotel room. You will always have a place to go and it will never be full, unless you make a mistake booking other guests to your rental property.
Another one of the big advantages you will find when it comes to having a vacation property is the potential to make money off the place. When you are not staying at the property, you will be renting it out to other people who want to vacation in the Outer Banks. Since this is a popular area, you should not have too much trouble renting the property, but you will need to make sure you have a nice space and that you market it properly. This provides you with money that you can use to help pay down the mortgage.
Once you pay off the home, you stand to make quite a bit on the rental money over the years. The value of the property can grow over time, as well.
Disadvantages of Buying a Vacation Rental Home
Of course, even though you can certainly find plenty of advantages to buying a vacation rental property in the Outer Banks, you also need to think about the disadvantages before you start buying.
One of the big disadvantages is that it can concentrate a large portion of your assets into a single spot. If you do not have money in other investments, you are putting a substantial amount of trust and faith into that property. If something were to happen to the area that somehow made the home not as desirable as a rental, or even for someone to live in permanently, it could be hard to rent out the house or sell the house. Fortunately, the Outer Banks tends to be a great area, so this does not seem like it should be much of an issue.
You need to make sure you are thinking about all the potential costs of owning property. You might have to pay condo or HOA fees, not to mention the insurance for the property. Think about basic repair and cleaning costs, as well.
Another one of the potential disadvantages is that it does require a substantial amount of work to have a rental property, and you do need to think of it like a business. This means you need to have a plan, you need to make sure the property has the features and amenities that people want, and that you learn how to market it properly. You need to have vendors who can offer cleaning services between guests, as well as gardening services for properties that have any land attached to them. After all, if you expect to keep renting, the place needs to look good.
You could hire a property manager to take care of many of these things for you, and that is what many owners do. This can relieve you of some of the stress of getting the property ready to rent. However, you will need to factor this added cost into your budget.
If you never know when you want to head out on vacation for a getaway, you need to be careful if you have a rental property that you like to rent out. You need to make sure that you know when people will be coming to the home and when it will be available for you and your family.
What Should You Do?
In addition to the advantages and disadvantages of buying a vacation rental home, you should also stop to think about just how you will be using the property to see if it makes sense for you. Make sure it fits your travel preferences for example. If you enjoy going to the same place repeatedly for your vacations, it would make more sense than if you were someone who likes to go to different places for all your vacations.
You also need to think about some of the other elements of buying a piece of property, such as your current financial viability. You might find that you simply do not have the money right now to buy the vacation rental property in the Outer Banks that you really want. In that case, it might be a better idea to wait. Always wait until you find the ideal property, too. Do not just buy for the sake of buying.
Now that you have a better idea of the pros and cons of buying a vacation rental property, you can start to determine whether it might be a good choice for you or not at this point. If you really love the Outer Banks, have the money, and you find a piece of property that is a good deal and that you like, it could be a good idea, despite some of the disadvantages.