You and your spouse have finally decided to take the plunge on a vacation home. You have your heart set on a particular locale, but you haven’t decided whether to buy or build. You do know that you want to rent the property when you are not using it. Just know that your options for renting may influence your decision to buy or build.
Should you choose to build, the architects at Park City Utah’s Sparano + Mooney recommend discussing rental plans with your designer in the early stages. There may be things your architect can do to make the house more attractive to renters without negatively impacting your enjoyment of the property.
With that said, here are your four options for renting a vacation home:
1. Buy or Build in a Vacation Community
It is not unusual to find entire vacation communities in popular tourist destinations. These are communities built by developers specializing vacation homes. Almost all of the homes are owned by people who do not live there year-round. They live elsewhere and contract with the property developer to maintain their homes, manage the rentals, etc.
This option in readily available in most of the tourist destinations in Florida. In fact, it is an option in most densely populated tourist locales. But in places like Park City and Salt Lake City, Utah, there aren’t as many of these communities to choose from.
The other downside is that the developer may eventually want out. Then the community would have to hire a property manager to take over.
2. Hire a Property Manager Directly
If you don’t like the vacation community idea, you can always buy or build on a separate piece of land and then hire a property manager directly. You might choose to buy in a deed-restricted community or build on a more remote piece of property. Either way, the property manager handles everything for you.
The benefit of this sort of arrangement is being able to rent your home free from vacation community rules. If you want to be as free as possible, just do not purchase in a deed-restricted community. HOAs in many communities are not friendly to vacation homeowners and their transient tenants.
3. Handle Rentals Yourself
Your third option is to buy or build and then handle rentals yourself. There is no property manager involved, so you do everything. You work directly with renters to schedule arrivals and departures. You collect rental fees and security deposit. You handle marketing, maintenance, and everything else.
Contracting with a cleaning service means you will not have to visit the property at the conclusion of each rental. And of course, you can hire someone to cut the grass and trim the shrubs. Either way, you will be doing a lot more work under this model than you otherwise would under one of the previous two.
4. Use a Broker
The fourth and final option is sort of a hybrid that combines hiring a property manager and doing everything yourself. It is the option to use a broker. The broker handles marketing, rental agreements, and payments. You are ultimately responsible for everything else. This model, combined with hiring people to clean and maintain the property, alleviates any need for you to do the actual work of being a landlord. All you have to do is manage those you have doing the work for you.
Now that you know your four options for renting, does that influence your plans for buying or building a vacation home? Hopefully, you are now in a better position to make the right choice.