Renting vs Selling Your Vacation Home

When you own a vacation home, you might have to choose between renting it or selling it at some point. Both options present you with some pros and cons that you will have to consider. Here are a few things that you need to think about in regards to renting or selling your vacation home.

Renting

Many vacation home owners choose to rent out their homes when they are not staying in them. The great thing about this strategy is that it can provide you with some significant cash flow. If you have a house and a prime vacation destination, you could potentially charge quite a bit for rent. It is not uncommon for vacation homes to rent for several thousand dollars per week in good locations. Therefore, if you can figure out how to keep it rented most of the time, you could pay for the mortgage payment and have some left over.

On the other hand, renting out your vacation home can present you with some challenges as well. First of all, you will have to worry about keeping it rented. This means that you will your have to hire a management team or do this yourself. If you hire a management team, you will have to give them some of the money from the rent that you generate. If you do it yourself, this could result in a great deal of work that you do not have time to do. You might have to set up a website, advertise, or use other means in order to keep the house full. 

In addition to keeping the house rented, you will also have to worry about potential maintenance costs. You will have to pay someone to clean the house in between visitors. Since you will have a constant stream of people in the house, you will also have to worry about making repairs occasionally. All of these things can add up to significant costs over the long-term.

Selling

Instead of renting, you could also consider selling your vacation home. With this option, you could potentially realize a substantial profit. If you have been in possession of vacation home for an extended period of time, you might have significant equity in the property. By selling a home, you will be able to pocket this equity and use it for other purposes. You can also eliminate the worry of having to make an extra mortgage payment each month.

When you sell a vacation home, you will have to consider some other factors. For example, you will have to pay some transaction costs in order to get the property sold. You will need to utilize a real estate agent in order to sell the home in most cases. They will take approximately 6% of the total sale price.

It may take some time in order to sell the property as well. Therefore, if you are in dire need of money, this option might not be the way to go. You have to factor in the time and costs that will be necessary in order to sell the house.

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