Being close to some of the best beaches in the world, potential property owners often ask for advice on whether they should buy property for an annual investment or a vacation investment. The response to that question generally depends on the cash flow expectations of the investor.
Annual Rental Advice:
If you are looking for quick cash flow and an immediate return on the property, then an annual rental is the better way to go. It provides stable income and it allows you to plan and budget. You know that the tenant is taking care of the utilities and there is minimal maintenance that’s needed at the home. All the annual rental landlord is responsible for is the financing, insurance, HOA expenses and any major maintenance costs.
Vacation Rental Advice:
Vacation rentals are completely different. The owner or landlord will always be responsible for utilities. Additional maintenance costs are typically associated with vacation rentals. While the monthly rental income can be higher, the costs are higher as well and vacancies can be longer. Generally, the vacation model is more expensive and therefore it does not provide the cash flow most property owners want.
If you want to own your own property in a beautiful part of the world, a vacation rental model can boost your income and subsidize the costs of your property investment. You’ll also be able to use the property when you want to. Really, it is a choice on where your investment goals are.
Any of the properties that people in this area buy will be appreciating. So both models have an appreciation bonus to them. Whether you buy and sell within five or 10 years, you will see an appreciation in the home’s value.
If you have any questions or you’d like more information, please contact us at Gulf Coast Property Management.