Investing in real estate has long been considered a very sound investment. When newer investors get ready to invest, it can be tempting to want to invest in vacation properties. After all, why not invest in something that you can personally benefit from? When it comes to investing, however, there may be far better real estate investments to make than vacation real estate. Here are 5 reasons why you want to rent rather than buy when it comes to vacation real estate.
Vacation real estate requires care for the other 40 – 50 weeks of the year when you are not in residence. You can hire caretakers, of course, but that can be prohibitively expensive for many. You can rent it out the rest of the year but that requires hiring a property manager. Considering that property management fees run anywhere from 30% – 50% of the nightly rental rate, that’s a significant portion of your rental income that will go towards just paying someone to manage it.
Colder climates are known for their beautiful springs and summers, but their brutal winter weather can decimate summer properties over the winter. Tropical and Caribbean properties can be torn apart by hurricanes just prior to your vacation. When you rent, rather than buy, you can go anywhere, which means you are not limited to spending your vacation somewhere that has just been hit by devastating weather.
3. Be pampered rather than DIY on vacation
Vacations are a time to travel to beautiful, exotic locales and be pampered by a staff ready to wait on you hand and foot. Of course, owning your own vacation home provides a great deal of privacy, but you don’t have to sacrifice privacy for pampering. St Martin vacations offer a wide variety of villas available for rent in this lush, tropical paradise, where you can have both the privacy of your own home combined with the luxury of hotel life. Cook your own breakfast or make your own coffee if you prefer and then spend the day having drinks delivered to you poolside or get a seaweed wrap or massage just steps from your front door.
4. No cleaning and no surprises
If you don’t have a professional management company taking care of your property for you, there is no telling what kind of condition your property may be in when you arrive, not to mention all the cleaning you will probably have to do once you get there. With rental properties, you know what to expect when you arrive, and if there is a problem, you can generally just get moved to another room or property nearby. No fuss, no muss and no hassle.
Not only do you have to pay property taxes on your vacation home, but you are also not entitled to the same tax deductions that you are on your regular home, such as for improvements or interest paid on your mortgage. Of course, if you want to live in your vacation property full time for 2 years, then you can claim these deductions. Otherwise, they are not tax- deductible.