We’ve all stayed in an Airbnb and thought about how easy it would be to buy a holiday rental, earn some extra cash and instantly be able to buy a Lamborghini. Simple as that, right?

It’s nice to entertain these thoughts. But they’re just not as feasible as you may initially think.

While investing in a vacation rental property can be lucrative, there’s a lot of other factors to consider before deciding that it’s the right path for you. In this post, we’ll break down some of the misconceptions about vacation rental properties and make a solid case about why you should consider other investment property directions. Let’s go!

Remember the higher associated costs

Lost keys, a broken door knob, a wine stain on the couch, a hole in the wall after your stag party guests decided it would be fun to host a wrestling match in the living room… all of these things happen in holiday rentals, and fixing them comes out of your wallet.

Not only is maintenance more expensive and frequent for holiday rentals, but you’ve also got to consider the cleaning and change-over process, which you either have to pay a cleaner to do or you have to do yourself. This can eat into your profits much more than initially expected.

Advertising platforms take a huge cut

Imagine selling lemonades on the street for $1 a pop. But then, the city council comes along and says, ‘well that’s our footpath you’re selling from, so we’ll take $1 for every $5 you make.’ You’d feel a little cheated, right?

Advertising platforms like Expedia and Booking.com take anywhere between 10-25% in commission per booking. So, instead of thinking you’ve made $500 from your vacation rental, you may only end up making $375. Rough!

Low season is a thing

Most places have a high season and a low season. In Far North Queensland, the high season is between June and August, while in Mornington Peninsula, the high season is between December and February. During high season, vacation rentals are constantly booked, the cash is flowing, and you’re zeroing in on which Lambo to buy. But low season? Well, things get stagnant, and some rentals can go weeks and weeks without a booking. Low season is important to remember when thinking about buying a vacation rental property, and it becomes a whole lot harder to create effective budgets.

Could a regular rental home be a more suitable investment for you?

If you’re not too keen on the risks associated with a vacation rental, talk to the team at Patrick Leo about investing in another kind of property. Whether you’re interested in residential or commercial, Patrick Leo is your specialist team in property investment. Our goal is simple: to get to know our buyers and pair them with high-quality properties that are aligned with their financial objectives. We work to increase your wealth, independence and happiness. Get in touch with the experts at Patrick Leo today.