Vacation homes: Roll out the welcome mat
If you are having difficulty hanging on to your vacation home, consider earning extra cash by turning it into a money-making rental.
Owners of pricey vacation homes currently face the “unenviable choice” of either selling at a loss or holding on until better times, said Suzanne Barlyn in The Wall Street Journal. “With a little creativity, however, it is possible for owners to squeeze extra cash from properties that might otherwise be a drain.” Turning your private little retreat into a money-making rental doesn’t have to spoil your own vacation. “Renting a property for even one or two weeks can produce found money”—especially if you target a popular event or holiday weekend. Better yet, if you rent the property for fewer than 14 days a year, the federal government won’t even ask you to pay taxes on the income.
These days, “you should have no problem finding paying guests,” said Stacy Rapacon in Kiplinger’s Personal Finance. Because vacation rentals are often more affordable than hotels, the recession actually has given a boost to the market for them. In fact, if you live in or near a popular vacation spot, you may be able to “cash in on the burgeoning vacation-rental market” by renting out your primary residence from time to time. Annette O’Brien charges anywhere from $400 to $1,000 a night for her five-bedroom colonial in Stowe, Vt. “Before guests arrive, O’Brien spends about six hours packing up and locking away personal items, including documents, clothes, and family photos.” Then she rents a smaller place for herself—or takes off on her own vacation.
If you need an inexpensive vacation more than you need the cash, consider a home exchange, said Kelli Grant in SmartMoney. Such an arrangement ensures you can be fairly confident that your guests won’t trash the place—after all, you’ll be staying in their place. You can find a match via one of a dozen popular home-exchange sites, where for a small fee you can list your house and search for possible swaps. “Quite a few homeowners are house-rich and cash-poor,” says Margaret Carr, owner of ExclusiveExchanges.com, where listings have increased 20 percent since November. Keep your expectations realistic, however. We’d all love to be “drinking wine in Tuscany or eating pastries in Paris without shelling out the cash for a pricey hotel room.” But to pull that off, you need to live in a pretty popular area yourself.