Ep. 138 - Pros and Cons of Buying a Vacation Property for Short-term Rental (Ask a CFP®)

It is time for a vacation!     If you aren't going to an 'all inclusive' resort - figuring out where to stay can really be a hassle.   We have a hard time finding a place that will fit our family (4 kids) with enough space to 'spread out'.   Maybe your vacation is a time to check out some potential investment properties.   A reader, Steve, sent in a question about potential investment properties that we are going to answer today.     Steve asks: My wife and I are in our mid-50's, we are debt free and own our home. We would like to have a place that our family and kids can use while we explore future retirement areas near the vacation home.   05:56 The pros of buying a short-term rental. 07:08 Generating Income 10:22 Long-term capital appreciation 13:20 Great Tax Benefits 16:24 The Cons - Higher Down Payment/ Higher Interest Rate 17:33 Not all communities welcome short-term rentals 18:04 Bad renters/property damage 18:54 Not passive income   I encourage you to have detailed conversations with your significant other and your CPA before you purchase a vacation/short-term rental property.   Check out my YouTube channel here. Follow me on Twitter and Instagram.    Resources: How to Buy a Second Home that Pays for Itself Real Estate or Index Funds – Which is the Better Way to Build Long-term Wealth? How To Invest in Real Estate (12 Different Ways!) https://wealthhackerlabs.com/ask/