How to Rent Out a Second Home

Many people purchase second homes as vacation destinations near beaches or mountains. They can be a great investment for the long-term, but a second mortgage can put a strain on your budget. As a result, many people choose to rent out their second homes in order to recoup some of the costs associated with owning it. Proper planning, common sense, and some effective marketing can make renting out a vacation home a positive experience.

The first step is doing a little research. It is important to know what attracts the stream of renters, what the average rental prices for comparable homes are in the area, and how many guests can you accommodate. Often times, this information can be obtained quickly and easily through a real estate agent that works in the area as they have a lot of experience in the local market. You can also check with ownership associations and websites like Homeaway.com, Ownerdirect.com, Vamoose.com, and VBRO.com.

The second step is to do the math and see if it works out for your situation. Add up all the costs and add an extra 10% to cover the unexpected and see (1) if it is profitable to rent out the unit and (2) how much of your owner costs you can recoup through renting. Remember to include all research, marketing, maintenance and management fees (which typicall run for between 8% and 10% of the gross rental income).

The third step is to get the word out and start renting. The best way these days is to setup a website and advertise through Homeaway.com and Craigslist.org. For a few hundred dollars per year, you can get setup with marketing tools that should have you ready to fill vacancies! But remember, you must stay in your own home for at least 15 days per year in order for it to be a second home and not an investment property!

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