The Right Place to Find the Perfect PropertySe Habla Espanol 702.870.5500

Top 3 Reasons You Should Consider a Vacation Home as an Investment Property

Summer is just around the corner: imagine being able to just take off to your favorite hideaway in the mountains or perhaps that beachfront condo you always dreamed of, without having to pay exorbitant hotel fees if you can even find a room during the peak season. Vacation homes aren't just a fantastic investment if you have a favorite vacation spot, they're also a viable option for both experienced and novice real estate investors. If you're buying your very first rental property, a summer home can also be a much easier property to start with than a single-family home meant for year-round permanent residence.

Here's three major perks to buying a summer
home as an investment property.


Vacation Rentals May Provide Stronger Cash Flows Than Residential Leasing

If your vacation home is in the Smoky Mountains, the Jersey Shore, or other popular vacation destination that is at full capacity during the summer with little or no hotel vacancies, that fierce competition with the hotel industry can actually provide much stronger cash flow than a comparable residential property. Trying to get a good tenant who will stay for one or two years (and possibly at a bargain-basement rent depending on the area) may prove to be more expensive than renting to tourists in a popular area. Do the math on how much a one-year lease would net you on a comparable property compared to the peak and off-peak season rates you'd need to set to compete with local hotels to determine if the property is a worthy investment when you are not using it. Vacationers also don't require the rigorous screening processes that a prospective tenant does and there's none of the stress involved with ensuring that the rent is paid on time every month.


Vacation Homes Make Great
Retirement Assets

Summer homes have a multifaceted aspect when it comes to their value in retirement planning. Since vacation homes are frequently in desirable areas meant to provide a relaxing getaway for the owner, if you're a prospective owner imagining retirement where you're going to purchase the property, then you can get a taste of what it's like to live there and see if it lines up with your expectations. Then when the time to retire comes, your new home is already taken care of and the mortgage is already locked in. And if you fell out of love with the area that your vacation home is in then you have the option to sell it if you need the cash and don't wish to give up your primary residence. You can also continue to rent out the property in retirement in the event of retirement assets falling flat and needing the income, and rental properties are wonderful legacies to bequeath to any heirs or beneficiaries.


Vacation Homes Are More Likely To
Retain Long-Term Value

Like any other asset, real estate can fluctuate in value. However, vacation homes tend to be located in tight markets because there's only so much highly-desirable coastline, mountain, or college town property available. While appreciation in property values are never guaranteed, vacation homes in popular destinations are still more likely to retain their value in the long run than commercial and residential properties in areas that people aren't bound to regularly visit during high travel times like the summer. In areas where the vacation home rental market has to fiercely compete with the local hotel industry, the value is likely to be stable in the long-term compared to a rental property that's used as a primary residence as cultural and economic shifts tend to hit residential areas harder than hot vacation spots.

Vacation homes have several other benefits like tax write-offs, and not having to spend large sums of money on hotels particularly if accommodating your entire family and requiring a large suite. There's also the practical benefits that come with these properties such as being able to store all of your beach or skiing gear there and anything else you'd like to leave in your home away from home, without having to pack up your entire dresser to account for weather changes which takes away a lot of stress in preparing for vacation time. Other rental properties don't have these benefits, so you'll definitely want to consider a summer home to diversify your risk.