Vacation Rentals
Vacation rental is a term in the travel industry meaning renting out a furnished apartment or house
on a temporary basis to tourists as an alternative to a hotel.
Vacation rentals are becoming
increasingly popular in Europe (especially in the UK)
as well as in Canada. In some European
cities, like Barcelona, local authorities determined that vacation rentals were becoming a threat to the
hotel industry, and passed some legislation placing regulations and limits on the
industry.
The benefits generally outweigh the potential negatives, with many vacation rentals
offering more space (multiple bedrooms and bathrooms, separate living areas), more
amenities (fully equipped kitchens, fireplaces, private hot tubs), convenient locations
(on the beach, ski-in/ski-out) and greater privacy than a hotel.
As of 2006, vacation
rental management has become a $10 billion industry.
Vacation Rentals are available in most states of the US including major tourist
areas such as Hawaii, California and Florida.
Vacation Rentals can be a budget studio or an expensive private villa on a private
island that runs more than $450,000 a week with a full staff to cater to the guests.
The vacation rental market is larger in Europe than it is in the United States.
You can buy a vacation home today for real estate investment
purposes as well as for enjoyment. And yes, there are tax benefits.
Some people buy a vacation
home to use as a permanent retirement home later, which allows them to get ahead
on their payments. Another benefit is that the interest and property taxes
on a vacation home are tax-deductible.
Some real estate experts predict
that
real estate investment homes will appreciate in value due to rising
demand from the aging Baby Boomer generation. You also can depreciate the
investment property if you live in the house fewer than 14 days a year, or 10 percent
of the number of rented days - whichever is greater.
You also need to consider
whether you can afford to carry two mortgages, pay for the extra utilities and maintenance
costs, and how this real estate investment fits into your total personal finance
picture.