Spoiler Alert! This isn’t going to be the fun and engaging blog posts. This one is way more X’s and O’s with spreadsheets and variable costs. Reader Beware!
When looking to purchase a vacation home/investment property, the two common questions we get are…
In the first article in the Investment Series , we broke down ROI expectations and which type of home would make a good investment property. And as for this series, we’d like to look specifically at the homeowner costs and understanding what break-even will look like. Let’s dig in!
When understanding expenses, they can be broken into two main buckets:
Short-Term Rental Costs:
Below you will find the different costs associated with running a short-term rental:
Homeowner Costs:
Below are the costs associated with owning a home:
So let’s put it all together! Below, we look at…
Net Profit = Gross Revenue – Homeowner Costs – Short-Term Rental Costs
So to use round numbers, we estimate the following monthly break-even numbers:
These numbers can change quite a bit depending on down payments, home size, and general profitability. These are intended to be directional so you have a general idea of what you need to accomplish to be profitable. Individual results may vary!
And if you’d like to get into the numbers yourself, you can check it out HERE , and as always, let me know if you have any questions! Hello@PoconoRentMan.com.