You may be interested in getting into the vacation rental market and wonder if it's the right thing for you. You may also wonder what type of housing should you buy to use for your rental. Having a vacation rental property can be a great investment and also a means for your own enjoyment too.
While there are perks to buying a single-family home or townhouse as a vacation rental, having a condo for rent for tourists and vacationers alike can be the better idea in some cases. Here are some good reasons why you should buy a vacation rental condo as an investment.
You Will Earn An Income
One of the top perks of having a condo for rent for vacationers is that you will earn an income from that condo. Condos tend to be a bit cheaper in price to buy, for the most part, so your monthly mortgage payments on it will be less than if you bought a single-family home or townhouse. While you may have to pay maintenance fees to the condo association, it typically covers your utilities and overall maintenance of the property, meaning you don't have to worry about that.
When you pay less for your mortgage, having the condo for rent for tourists can give you an income. You could have your rental fee a little more than your maintenance fees or mortgage costs, and over time, that fee will become a great income for you as those payments lessen and are paid off.
It can create a great business for you and your family.
You Get Tax Deductions
Another great perk of having your condo for rent to tourists is that you can receive tax deductions on the condo. If you plan on using it mostly as an income source, you will have created a business, especially if you are renting your condo for more than a night or two. While you will have to pay taxes on your income like with any other business, you will get tax breaks on many items too.
For example, you can write off any repair costs or renovations you need to have done to modernize or maintain the home. You could write off the fees from any listing service you are using. You could also write off expenses due to cleaning costs. This includes cleaning supplies and if you have hired a management staff to clean for you.
It's also possible to write off maintenance fees for the condo, supplies for the home, insurance costs, and even your mortgage interest.
A Good Long-Term Investment
There is a reason many people invest in real estate because it's a good long-term investment. Property values increase over the years, and this does include condos. Having a condo to rent for tourists, and even to use for yourself for vacations once in a while, can help you build wealth over time.
If you ever decide to sell the condo, you should get back more than what you paid for it due to this increase in value.