As you consider your vacation home purchase, keep in mind one of the best sources for affording the purchase and operation of the home – renting the home out. Even renting the home out for a couple of weeks can go a long way towards paying for the property taxes and maintenance for the home. Renting the home out more can put a significant dent in your mortgage payment.

Not everyone is suited for renting their vacation home, however. For some, the idea of “strangers” in their home is too uncomfortable. For others, the burden of managing the rental process seems overwhelming. Then there's the question of when to rent the home – do you lose use in the prime season to get income? While these are real concerns, they pale in comparison to the financial reality that renting your vacation home can be very profitable.

The answers to these questions will help you make your decision regarding a potential vacation home.

Before You Buy

If you already know you will rent your vacation home, consider these questions as you look at properties: Is there a vibrant rental market in the area? What is the average rent that the area can command? Is this a seasonal area or year-round location? Are there local restrictions or regulations regarding renting?


Rental Seasons

How do you decide when to rent your property and when to use it yourself? If the home is in a one-season area, for example, summers at the Michigan shoreline, then giving up that time of year in favor of rental income might defeat the purpose of having the home. In this case, you might look for a long-term (9-month) renter for the off-season, among the local population, while you use it in the summer. On the other hand, if you buy a winter ski condo or chalet, it is still highly rentable in the summer time. In short, if you balance your own needs with the market demands, you can attain both fun and money.


Practical Considerations

For successful renting, first find out the going rental market rate. You must also determine if you want to market it yourself, or use a rental agent. Self-marketing takes time and may be difficult if you live far away. Next, be sure to arrange for a property manager. Their services might include arranging for cleaning, being on call for maintenance (especially important if you live far away), and dealing with the daily needs of the renters.


Welcome Renters to Your Home

By far, the most important factor in your rental success is your personal investment in the process. This means your personal contact with your renters. From a simple welcome greeting and local maps and restaurant menus to a thank-you note and on-going contact, your personal relationship will help create a repeat flow of guests who not only love your second home but will also pay for the privilege of using it!