How to Make Your Vacation Property Pay for Itself

For many people, a vacation home is the ultimate luxury. Especially if you have a favorite vacation destination, whether it's the beach or the mountains or somewhere in between, a vacation property makes it easy to get away without giving up the creature comforts of home. However, many people are unable to justify purchasing a vacation home if they will only be using it for a few weeks out of the year. There are options, however, that can make a vacation property not only affordable, but profitable as well. This is especially true if your vacation property is located in a popular tourist destination, and even more so if you intend to use your vacation home during low or off-peak seasons. By renting out your vacation property when you're not using it, you could recoup some of your costs, and possibly even make a little extra as well. And renting your vacation home is preferable to leaving it empty and vulnerable throughout the year, because it reduces the risk of break-ins and ensures that leaks, clogged drains and other potentially serious issues are noticed so they can be dealt with quickly. Making the choice to rent out your vacation property is not always an easy one. Chances are, the property is located a fair distance away from your year-round home, making it difficult to maintain the property, get it ready for renters, or handle the administrative tasks associated with renting. However, if you know someone in the area that you can trust, you can ask for their assistance in managing the property in your absence. Many real estate companies provide general property management services that are well suited to owners who wish to rent out their vacation homes. If you're thinking about renting your vacation property, there are a few things you should take into consideration. As with any rental situation, there is a degree of risk involved. Renters may cause damage, injure themselves on the property, or fail to pay the rental price agreed upon. For this reason, it is important to ensure that you have all the necessary paperwork taken care of any time you decide to rent your property. Some of the important documents that you should consider are: • Rental Application • Vacation Property Rental Agreement • Property Management Agreement The Rental Application is what prospective tenants will fill out if they are interested in renting your property. This document commonly includes information such as the desired rental period, how many people will be staying in the property, and a preliminary rental agreement. In the event that you approve the application, a more formal vacation property rental agreement can be filled out that more clearly details the rights and responsibilities of the renter and the property owner. A formal vacation property rental agreement contains provisions such as: • How and when the security deposit will be returned to the renterrn• Description of the property and items supplied, such as appliances, linens, etc. • Restrictions on the use of the property, such as smoking, pets, noise, guestsrn• Fees payable for no-shows and cancellationsrn• Limitation of the owner’s liability for injury, loss or damage to occupants and property. A written rental agreement is important not only to prevent misunderstandings, but also to provide a legally binding method of protecting your property, and to reduce the risk of liability and damage claims. A property management agreement comes into play if you decide to hire an agent to manage your property on your behalf. Property managers typically provide services such as: • Opening the property and providing keys for renters, and picking up keys and locking up at the end of the rental. • Cleaning, laundry services, restocking of supplies (toilet paper, soap, etc). • Regular maintenance and repairs, as required. • Regular security checks of the property when unoccupied. • Collecting the rentals and any other fees and charges (long distance phone calls, pay-per-view TV, etc). • 24/7 phone support for emergencies. • Arranging for removal of occupants who are not complying with the terms of the rental contract. Whether or not you decide to use a property management service, it makes sense to have somebody that you can trust available to assist renters with checking in and out and to address any issues that may arise in your absence such as repairs, property damage, and so forth. You may also want to consider a landscaping / groundskeeping service to keep the property in good condition at all times. With the rising cost of air fare, gas and accommodation, people are looking for more affordable ways to enjoy a vacation. Rental properties such as cabins, cottages, and other vacation homes are becoming increasingly popular as they are generally more cost-effective than staying in a hotel and more comfortable for extended stays. This gives vacation property owners an excellent chance to get the most out of their vacation properties all year round.