Advantages and Disadvantages of Owning Multiple Vacation Rentals
The Ins and Outs of Owning Multiple Vacation Rentals
When you make the leap towards purchasing a short-term rental property and see big returns in a short amount of time, it can be tempting to want to purchase a slew of homes to maximize your revenue. However, there are a few pros and cons to owning multiple vacation rentals–it’s not an easy endeavor, by any means, but it can be rewarding.
We advise anyone looking to expand their short-term rental empire to weigh the advantages and disadvantages of owning multiple properties. While you can certainly make bigger profits, not everyone wants to turn property ownership into a full-time job.
Advantages of Owning Multiple Short-Term Rentals
Higher Revenues
There’s no argument that the main goal of most short-term rental owners is to maximize revenue, and the easiest way to do that is by growing the business and investing in more properties to rent out. Though it can be tough at first to acquire the necessary capital to create your vacation rental empire, it can pay off big time in the long run if you can invest in the right places.
A Variety of Places to Escape To
The best part about owning a vacation rental is having a dedicated space to escape to when everyday life gets too overwhelming. When you own more than one rental, this feeling of comfort is magnified, since you’ll have a variety of options for your next vacation destination. An added bonus of having multiple rentals is that it’s easier to plan spontaneous trips, since you’ll have more flexibility to work around guest bookings due to the sheer volume of availability.
Home Price Appreciation
Purchasing real estate has long been touted as a sound investment, and it’s obvious why: over the last few decades, home prices have skyrocketed, sometimes doubling their value over only a few years. When you decide to invest in multiple vacation homes and keep them in good shape for those who come after, the value of those homes will only continue to appreciate over the long-term. Come selling time, you’ll not only be looking at the profits you’ve made from renting it out for short-term guests, but you’ll also be likely see a profit on the investment in the property itself.
Larger Tax Deductions
When you make the leap into buying a slew of short-term rentals, you may be surprised to learn the true number of different expenses you can deduct when doing taxes for your business.
With more homes under your name, you can save money on your taxes by deducting qualified business expenses like housekeeping services, insurance premiums, utility payments, and even property management fees.
Disadvantages of Owning More Than One Vacation Rental Property
Unforeseen Costs
When you own multiple properties, you also multiply the chances that something will go terribly wrong at one of them. Property maintenance and repairs alone can be tough to manage, especially if you’re not located near your rental to oversee everything yourself. As with any other business, there will always be unforeseen costs that pop up, so it’s a good idea to expect the unexpected and plan for the worst.
We recommend setting up an emergency fund to help insulate your business from the cost of unexpected expenses, that way you won’t see a hit to your revenues.
Higher Stress Level
Owning more than one property not only multiplies the chances of unforeseen costs arising, it also multiplies the amount of stress owners have on their plates. With so many cleanings, inspections, guest inquiries, and issues to take care of, owning more than one property can get very overwhelming, very quickly. Managing one rental is tough enough, but once you have an array of properties to upkeep, that’s when you might find yourself buried alive under an avalanche of work.
Self-Management Nightmares
It’s all well and good to not give anyone a slice of your vacation rental revenues, but self-managing is more of a headache than most people would assume, especially when you own more than one property. Not only will you have to take care of all property inspections, repairs, and cleanings yourself, you’ll also be responsible for listing and optimizing your rental on distribution channels like AirBnB and VRBO, which can quickly become a full-time job. Reigning over your empire of short-term rentals might feel great come profit time, but self-managing is usually more hassle than it’s worth and can turn into a nightmare if you’re not careful.
Take the Work Out of Managing Multiple Properties
Managing multiple vacation rentals can be a ton of work, but it can also be extremely rewarding when you read the reviews from happy customers and it comes time to collect all the revenue you’ve made. However, not everyone who owns multiple rentals wants to invest the time and energy into managing all the homes themselves. That’s where a property management company like LocalVR comes in–we take all of the stress off of your plate and hand it over to our local experts, who take care of every detail for you.
If you’re a property owner looking for ways to take your short-term rental to the next level, we recommend checking out our guide to avoiding common mistakes that owners make. Or, if you’re struggling to fill up all the dates on your calendar, take a look at our advice on landing more last-minute bookings.