Is renting out your Jupiter home on a short-term vacation or seasonal basis right for you? Residential investment properties are often thought of as homes and multi-family properties rented out on a full-time basis. Owning a home in a desirable vacation destination like the seaside towns of Jupiter, Juno Beach or Tequesta offer the opportunity for significant passive income. But what’s involved in owning a vacation rental? Is it worth the work?
A seasonal rental can be a great investment for a number of reasons. The additional income for the investor can help greatly in offsetting the cost of second-home ownership, allowing you to enjoy the property during other times of the year at a significantly reduced cost. The property could also appreciate in value during the time of ownership if it’s located in a popular and growing area such as the northern Palm Beaches. Although the short term rental is still a rental property, it often fetches much higher income per-month than a traditional long term lease does. This rate is typically close to double or more that of an annual rental rate.
Vacation rentals might seem like a great deal of work, and they can be depending on the length of stay. The first choice a vacation rental owner will need to make is whether they would like to self-manage or hire a property management company. Many short term rentals are managed by a professional property manager that specializes in the short-term market. These managers have people on-call to help with arrival, departure, cleaning, repairs and rent collections. While they do charge for their services, a professionally managed vacation rental can provide a nice income stream by building positive reviews. Oftentimes multi-month seasonal rentals will be less burdensome because of the reduced changeover. While you will still have to handle repairs and maintenance, the work of preparing the home for new guests only happens once or twice a year.
Of course, there are downsides to owning this kind of investment. It’s important to choose the right location to ensure a steady stream of renters. Additionally, one must budget for unexpected repairs or damage. With the deposit being made with a credit card, it can be difficult to collect for damage done to the home.
The internet has been instrumental in the new vacation economy as peer-to-peer platforms like Airbnb, VRBO and HomeAway offer visitors the ability to interact directly with the owner. By reducing the advertising costs, investor-owners, can negotiate directly with potential renters and screen them to prevent possible problems.
If you are considering the purchase of a second home and are curious about what your potential income stream may look like, give me a call! We’ll find out if it is the right opportunity for you.