Pros and Cons of Owning a Vacation Rental in Orange County

There are always two sides to every story, especially when it comes to purchasing vacation rentals for use as an income vehicle. Consider these pros and cons of owning a vacation rental in Orange County to see the bigger picture and make the right decision for your investment portfolio. 

While each situation is unique and can bring other variables you’ll need to contemplate, we’ll cover the top contenders common to most vacation rentals.

Location

While you’ve probably heard it before, when it comes to owning a vacation rental in Orange County, you’ll be in good company, so to speak. In most cases this type of real estate is located in the most desirable location, making for an overall better investment. The more features the better, is waterfront or water view available? Are there added amenities that can increase your potential income? On the other hand, prime real estate equates to the higher end of the market, so you’ll have to initially invest more and be at a higher risk with the investment.

Equity

In general, real estate investments increase in value over time. You’ll enjoy not only the returns from your vacation rental in Orange County, you’ll be building equity. When building a portfolio, you can use this as more leverage or turn the property into cash, when you’re ready to sell.

Higher upfront investments are a drawback of vacation rentals, as a second home, you won’t see the lower down payment requirements that are common to homeownership. In most cases, you’ll need to have a higher than an average credit score to take on the additional debt.

Cash Flow

Who doesn’t want extra income! It goes without saying that owning a vacation rental in Orange County is an alluring option, as many renters seek out just this type of property. Often, great experiences lead to return visits and even more rentals through word of mouth. Unexpected expenses can certainly put a damper on the bottom line. While you can count on your monthly maintenance and routine repair expenses, it would be wise to set aside funds to cover emergencies. Time is precious and limited when vacationers are occupying your property. You’ll need to act swiftly to keep your tenants happy should something go wrong. 

Accounting

Deducting business-related expenses is another plus to owning a Orange County vacation rental. Routine costs such as cleaning services or property managers can be written off of your taxes. It’s wise to have a professional tax advisor for reliable advice on what records to keep each year. Now, be aware from the start that you’ll have to pay more taxes and other fees associated with the business..

Free Time

How exciting!  Naturally, you could plan on spending your retirement years in the property you select as your vacation rental in Orange County. You’ll have the dream vacation home you selected at your disposal. Just remember, your highest rates and peak booking dates will likely be during the prime you’d like to vacation or special dates on the calendar, such as holidays. For this reason, don’t count on spending these times on the property, unless you’re willing to lose income. Upkeep and maintenance of the property can be costly, especially if all of the services are hired out for each turn over of the unit. Do-it-yourselfers often find their vacation property nibbling away at the free time they would rather be enjoying.

We’ll guide you through the benefits and risks Orange County vacation rental investments can bring. See how we can assist you with balancing the pros and cons while optimizing your time and returns on your property, call H&M Realty Group today at 949-625-4533 or send us a message any time! 

Joe

Broker/Realtor/Investor/Mentor (41 years experience) Specialties: Buyer's Agent, Listing Agent, Foreclosure, Short-Sale, Property Management, Landlord I'm a Full Time Real Estate Professional, house flipper and mentor to many of my clients. I am here to help you get top dollar for your home or get you the best price for a home that you are going to live in. I have over 40 years of real estate experience for you to draw on and actively list and sell over 20 homes a year. I have sold over 600+ homes in the last ten years alone. I am a very skillful negotiator and will work diligently to help you realize the best possible price when buying or selling your home. With my Exclusive Home Acquisition & Sales System, I can find the Right Home for You! I have access to homes no other Realtor will show you. I can show you how to save an average of $10,000.00 on the purchase price. We will find a home that fits your needs, in a neighborhood that suits your style. If you are selling your home then I can bring all the professionals to you. I always include professional photos in ALL my listings. I have contractors standing by to assist with those upgrades if needed. I can also quickly get you ALL CASH offers for your home if you desire. My marketing surpasses all other agents. It begins with extensive internet advertising to hundreds of websites throughout the world. I do direct mail marketing for you home and also knock on doors in your neighborhood when I am holding an open house. I hold you home open to expose it to as many buyers as possible. My Exclusive program is designed to sell your home for Top Dollar in Any market. I am an experienced flipper here in Orange County and therefore can offer you my over 40 years of real estate experience. The information is available to you at no charge! If you like what you see, please call me and setup Your Free Consultation.

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