Investing in a rental property is a natural choice for many. You’ve got the chance to turn a renewable profit from your tenants, and if the market takes a sharp turn, you’re in a prime position to sell up. 

Simply put, renting out a property can be a very smart decision for anyone looking to build a portfolio. 

But what if you’ve got a vacation home on your hands? You’re only going to be renting out for a week or two at a time. That’s a pretty high tenant turnover, and there’s a lot more admin that goes into the management. 

So, while a vacation home is a good way to capitalize on your location, there are a few more details you’ll need to think about. Here are the most important to keep in mind. 

Cleaning and Repair Costs Could Be Heavy

When you have shorter rental contracts and a high rate of tenant turnover, your need for cleaning and repair could climb to an astronomical level. 

After all, more people traipse in and out of the property, use it in their own way, and may or may report any damages that occur while they’re renting it. And when you rent a property for a week or less, you don’t see it as your home. 

Typically, that means your tenants will take less care. But it’s still up to you to clean up, fix a few things, and then get the house back on the market in double time. That can double the amount you might spend compared to someone who takes on long term tenants, and you’ll have only half the time to maintain the property in the meantime.

Vacation Homes Often Require More Interaction

With a vacation home, you’re taking on ‘guests’. They won’t think of themselves as tenants. They’re on a trip, and they’re going to expect an experience from the accommodation they’ve rented. 

If you were expecting to be hands off, you might need to change your plans. You can hire a property manager to take care of guests’ needs for you, but you’ll still need to fork out for this more personal level of interaction. 

Are There Rental Rules to Be Aware of?

Finally, make sure you’re aware of rental rules applicable to your area, both on a local and state level. When you’re dealing with a short term rental, tax and safety implications can be complex. 

You need to be sure your vacation rental is compliant at all times, as many local councils operate short term rental management software to keep an eye on investment properties like yours. 

These rules can vary depending on where you are, and where your rental property is located as well. But expect to pay tax on the property when it’s occupied, whether or not you live in the property some of the time as well. 

Want to turn a profit off of those on vacation? It might be more complicated than you were expecting.