Making Money On a Vacation Home

Making Money On a Vacation Home

I'll just buy a condo on the beach, and rent it out for $700 a week, and then I will be rolling in the money." WRONG! Although you can make some rental income on a property, seldom will you make a huge profit, or any profit at all. There are many factors to consider.

Make sure you can afford the payments, utilities, insurance, and upkeep when it is not rented.

In the southeast U.S. there are many attractive places to have a condo, or home on the beach. However, that beach property is only in season as a rental certain times of the year. The rest of the time you just pay.

-There are monthly condo fees, that go on whether it is being used or not.

-Mortgage payments continue on.

-Utilities to some degree continue.

-Rental agency fees are deducted from rental income.

-Cleaning fees.

-Repair and upkeep costs.

-"Mother Nature" blowing plans to rent for that period.

-Insurance fees

The last one is a big one. After every major storm, insurance fees triple, or even higher for the beach areas. Your profit disappears.
If you are in the mind set of purchasing a place because you will be retiring there some day, and you just want to rent it out to help a little with the payments until then, it may be a good idea. Just be cautioned of the business expenses that will be involved. Do not cut yourself too short, in order to allow for the expenses, and non - rental times.