Dear Dave,
How do you feel about someone buying a vacation home, then renting it out when they’re not there?
Randall
Dear Randall,
As long as you’re debt-free and buying with cash, I’m cool with it. A vacation home is a really nice “extra” as you start building wealth. It’s still basically a very large, very expensive toy. Still, it could become something of a money maker for you if you play your cards right.
But here’s another side to vacation home rentals that most folks don’t consider. You might make some money, but there will almost always be several weeks during a year when it sits there empty. Chances are you won’t get rich renting it out, but if you’re talking about something that’s more of a plan to offset the annual costs of your toy, I don’t think you’ll be disappointed.
Be ready to deal with lots of spills on the carpet and damage from your guests, along with general maintenance and repairs. There’s always something that needs attention when you own a property. But if you can handle all that financially and emotionally, I think you’ll be fine.
Best of luck, Randall!
—Dave
Dave Ramsey is an eight-time No. 1 national best-selling author, personal finance expert and host of The Ramsey Show, heard by more than 20 million listeners each week. He has appeared on Good Morning America, CBS Mornings, Today Show, Fox News, CNN, Fox Business, and many more.