5 Questions to Ask Before You Decide to Manage Your Own Vacation Property
Your vacation home is your baby. So when it comes to renting it out, you’re not going to let anyone else manage the details but you. Sure, it’ll take a little extra work, but to you, it’s worth it.
But before you decide to go the DIY route instead of hiring a property management firm, ask yourself these five questions about being a first-time vacation homeowner.
Ready to get your rates?
See what lenders have to offer.
Get Quotes Here
How will you market it?
If you use a property management company, they generally take care of the marketing for you. But if you plan on going the DIY route, you’ll need to find inexpensive ways to market yourself. Lucky for you, there are a ton of vacation home rental sites out there like Airbnb and VRBO.com. Read our how to on marketing your own property to see if you're ready.
Who will clean the house?
Managing your own property means you have two choices for cleaning after a guest checks out. You can clean the house yourself, or you can hire someone to do it. Just remember, an exit list can help, but you can’t always rely on it to make sure your guests leave your house as nice as they found it. You can also offer to let the guests clean it themselves or pay an extra fee for housekeeping.
How will you handle upgrades and repairs?
Even if you have perfect renters, you’re still going to need to make the occasional upgrade or repair. Will you be putting some of your rental income aside each month in a savings account? Or do you plan on paying for it with a home equity line of credit (HELOC)? Will you take out a second mortgage? Make sure you're financially prepared to deal with home maintenance or ready to make the repairs yourself.
What are the house rules?
What do you feel comfortable allowing in your house? Try to think through things like smoking, the number of guests that are allowed, and the minimum number of nights they have to stay. Letting renters bring their furry friends means you might end up with more damages, but it also might set you apart when it comes to people searching for a place to stay. (Yes, you can charge a pet fee.) Laying down the rules and screening your applicants will help cut down on any potential horror stories.
Do you know how to calculate and deal with the taxes associated with a second home?
You have to declare your rental income on your taxes. Make sure you know the ins and outs of what you can deduct and what exemptions--like the Masters Exemption--you might be eligible for. We recommend talking to a tax professional before starting to rent your place.
Owning a second home can be very rewarding, and it can be a lot of work. As you ask yourself the above questions, you may want to add one more: Should I DIY or hire a property manager? It's definitely an option worth considering. Though there are costs involved, a good property manager can help you make more from your investment and enjoy it when you can!