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Vacation Homes as an Investment

Walkway to the Beach

Buying a vacation home as an investment can be a great way to earn passive income and enjoy a vacation property at the same time. In this article, we’ll explore some tips for buying a vacation home as an investment. 

Choose the Right Location 

The location of your vacation home is crucial when it comes to investing in real estate. You’ll want to choose a location that is popular with vacationers, with a high demand for rental properties. Look for areas that offer attractions and activities for tourists, such as beaches, ski resorts, or theme parks. 

Calculate the Costs 

Before buying a vacation home, it’s important to calculate the costs involved. This includes the purchase price, closing costs, property taxes, insurance, maintenance, and utilities. Make sure to factor in any potential repairs or upgrades that may be needed to make the property rental-ready. Consider hiring a property manager to help you with the rental process. 

Determine your Rental Strategy 

There are different ways to rent out a vacation home, such as short-term rentals, long-term rentals, or a combination of both. Short-term rentals, such as Airbnb, can generate higher rental income, but may also require more work and management. Long-term rentals may offer more stable income, but may not generate as much rental income. Consider your rental strategy based on your location, market demand, and personal preferences. 

Make the Property Rental-Ready 

In order to attract renters and maximize rental income, you’ll want to make sure your vacation home is rental-ready. This includes furnishing the property, providing basic amenities such as linens and towels, and ensuring that the property is clean and well-maintained. Consider hiring a professional cleaning service to keep the property in top condition. 

Plan for Tax Implications 

Owning a vacation home as an investment may have tax implications, such as rental income taxes, property taxes, and capital gains taxes when you sell the property. Make sure to consult with a tax professional to understand the tax implications and plan accordingly. 


In conclusion, buying a vacation home as an investment can be a smart financial decision if done properly. Choose the right location, calculate the costs, determine your rental strategy, make the property rental-ready, and plan for tax implications. By following these tips, you can enjoy a vacation property while generating passive income and building your real estate investment portfolio. 

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