This is the first of a three-part series on vacation home ownership, excerpted from the upcoming book “Vacation Rental Success in Mexico” by Stanley Kahng, founder of Remixto, which has partnered with Yucatán Expat Life.
So many people dream of having a home in sunny Mexico.
The warmth of the people, the rich culture, the inexpensive shopping and lifestyle leave people dreamy eyed and with a tiny sigh of regret. But there are two types of people who have this dream: the dreamers and the doers.
There are many ways to make owning a home in Mexico a reality, either as a primary residence or a second home for vacations. If you won’t be here full time, owning a vacation rental makes a lot of sense.
Why own a vacation rental?
Income: In the right location and marketed well — which is not as hard as you may think — short-term vacation rentals can make significantly more money than a long-term rental. Unlike long-term rentals, you receive payment upfront, usually 30 days prior to their arrival. If they don’t pay, they don’t stay. And while you do have additional expenses, such as utilities and marketing, those are often offset by the increased per-night or per-week fee.
Growing Industry: The vacation rental industry is robust and healthy. Getting in now positions you in the market before others join the pack.
Wealth Building: According to a recent study by G. William Dumhoff, of the wealthiest top 10 percent in the United States, 77 percent own real estate beyond their primary home. And while that includes many types of real estate, including commercial buildings, parking lots, and long term rentals, none is more fun to own than a vacation rental.
Free Travel: Owning an income property allows you the opportunity to trade unused weeks with other property owners all over the world. Most vacation rentals do not achieve 100 percent occupancy. Turn some of those empty weeks into a free trip to the beach, the mountains, or Paris, maybe? Ooh, la, la!
Tax Deductions: Real estate offers significant tax deductions. Travel to your vacation rental can be a legitimate tax expense. Utilities, supplies, furniture, advertising and property management fees can all be deductible. Always check with your tax advisor. Taxes are not an area for a DIY approach.
Get started with a professional
There are a million what-ifs that can get in the way. However, one sure foot forward is to chat with a professional vacation rental specialist about your dream home and overall goals. He or she knows the market and can offer advice on the kinds of things to consider and how to get started.
With the right advice, you’ll find the right property and be on your way to a home for yourself, a bit of rental income each month, and a lot of free time to enjoy it all when you visit.
Next week: Making your vacation home irresistible. In two weeks: Maintaining your rental house in the tropics.
Excerpt from the upcoming book “Vacation Rental Success in Mexico” by Stanley Kahng, founder of Remixto.