It’s a question I’ve been asking myself, and here’s something that helps me answer it: a Vacation Rental Analysis Sheet (sexy, right?). It’s a downloadable Excel spreadsheet that allows you to plug in all the relevant numbers, from sale amount to estimated rental income, so that you can figure out how much income you might gain, if any, by renting out your vacation home. It has lines for property caretakers, advertising, house cleaners and other regular expenses, but I would add a few lines if I were you:
- Cost of furnishing a new home (beds, couch, second set of cookware and such)
- Renovations (even if you’re lucky enough to need little more than a new coat of paint)
- Monthly fund of moneys put aside in case of major structural breakdowns, like broken boiler or leaky roof
- Car expenses, for those city dwellers who have not yet invested
Can you guys think of anything else you should add to your monthly expenses to figure out if it makes sense for your wallet? According to my analysis, for a $250,000 house with $50,000 down and renting it out for half the year, my expenses are about 20 percent higher than my income, and comes to about $4,000 a year. That’s pretty good for 36 weeks in the country.