Have you heard about the riches people are raking in renting out their spare properties as vacation rentals and want in on the action? While owning a vacation rental can be a lucrative investment, it’s not all sunshine and dollar signs. When it comes to vacation rentals, there are a lot of risks that come with the territory. Here are just a few of them:
Lost Revenue
There are a few ways that you can lose revenue on your rental property. One is if your property isn’t booked for as many nights as you expected. Another is if you have to discount the price of your rental to fill vacancies. Additionally, you may incur extra costs associated with maintaining your rental property, such as cleaning or repair fees.
Property Damage & Theft
You could experience damage to your property from guests, which could end up costing you a lot of money to repair. Plus, vacation rental properties are subject to a lot of wear and tear that isn’t covered by insurance.
Not only can renters damage your property, but they can also steal items from your home. In order to protect yourself from financial loss due to damage or theft, it’s important to have good insurance coverage on your vacation rental.
Legal Liability
You could also be sued by a guest if they are injured while staying at your property. With many vacation rentals housing everything from the elderly to children to boozy young adults, injuries are bound to happen. In some cases, you could be liable even if the injury was not due to any negligence on your part. This is again why a robust insurance policy is a must for vacation rentals.
Local Regulations
Some communities have outright banned vacation rentals, so it’s important to know the local rules before listing your place. You could be fined or forced to stop renting out your property altogether. And just because your neighborhood doesn’t have regulations about vacation rentals now doesn’t mean they won’t in the future. Spending the money on a vacation rental just to have a law change and outlaw the rental could be a major blow to your bottom line.
Vacation Rental Management in Southwest Florida
These are just a few of the risks that come with owning a vacation rental. Before you decide to become a vacation rental owner, be sure to do your research and understand all the risks involved. If you have a property that would be great as a vacation rental but don’t want to deal with the operations, contact Douglas Realty Property Management at (239) 542-6906 or online. We can deal with the daily grind while you sit back, relax, and enjoy a truly passive revenue stream.
