When you’re addicted to travel, it’s a lot like dating: You “test out” a lot of various vacation hot spots before finding “the one.” And once you’ve found your dream destination, chances are that you’ll want to visit again and again to soak up all that destination has to offer. Of course, while you may love vacationing in a certain spot, you may not love shelling out for accommodations. Multiple trips can really add up, so thinking about investing in a holiday home may be in the cards. Not only can a vacation property help you save money on your favorite getaway, but it can also generate income when you’re not around. Find out whether a vacation home is right for you and your family – and then go shopping!
One of the most obvious benefits of investing in a vacation or holiday home is the opportunity to generate some income when you’re not using the property. By renting out your condo, home, villa or flat when you’re not vacationing, you can recoup some of the costs of owning a vacation home and extend your good fortune to others.
There is a number of ways that you can put your home for rent or reservation when you’re not using the property. Whether you go through a real estate agent or list the property via sites like VRBO.com and AirBnB.com, you’ll make some extra money. This can help pay mortgage payments or assist you in paying an HOA to care for your property when you’re not in town. That way, you get the best of both worlds – a place to stay while on vacation and a home that generates an income when you’re not using it.
Up and Coming Capitalization
Savvy vacationers and homeowners can tell when a neighborhood, town or city is up-and-coming. By sniffing out the best deals when a place is on the cusp of becoming a vacation hotspot, you can invest in a vacation home that really pads your portfolio and can pay you back over time. If you love a specific vacation spot, chances are that others will too – even if it’s not popular just yet. This gives you the opportunity to snag a screaming deal on a piece of property that will only increase in value over time, a virtual no-brainer for smart investors.
If you want to know whether a town is up and coming, ask around. Check with local real estate agents for pricing trends and whether or not home prices are rising. Take the pulse of the local culture and you’ll be able to detect the type of person who vacations there and whether or not you can capitalize on the beat.
If you live in the United States, there are specific tax benefits to owning a vacation home, particularly if you don’t necessarily qualify for other credits. A high tax bill can make it worth it to invest your money in vacation property. You may be able to write off a portion of your home interest or ask that Uncle Sam recoup your losses if your rental prices don’t add up over the years. As long as you occupy the vacation home at least 14 days throughout the year, you could qualify for specific tax benefits that reduce some of the burden on your current tax bill while enjoying the benefits of owning your own holiday home, even if it’s outside the United States.
Hey, if you travel to the same place again and again, it only makes sense to invest in a vacation home there as well. Otherwise, you’re plowing money into paying for hotels and other accommodations on which you could be saving. Skip the hotel and you could have your own place without all of the service, resort, facility and parking fees. Saving on your accommodations could mean you get to take your favorite vacation more often and save your money for attractions or upgrading your travel plans. It makes sense if the bulk of your travel budget is eaten up by accommodations – a vacation property saves you money and can even make you some cash in the end.
Photo Credit: Wikimedia/MattKingston