The Benefits of Owning a Luxury Vacation HomeNews Home
The Benefits of Owning a Luxury Vacation Home
Over the last decade, a new market has materialized with companies and private homeowners offering short-term homestays in luxury homes in Las Vegas and other destinations. It’s becoming popular to invest in properties that offer a positive return. Here are a few benefits of owning a luxury vacation home.
You’ll Have Access to a Comfortable Vacation Home
A Realtors association survey determined that most people purchase a vacation home so that they have a comfortable place to stay when they travel. If you have a favorite destination, consider buying a vacation home there. You’ll be able to vacation in your favorite city more often and become a member of the community.
After buying a vacation home, you’ll have accommodations that include your personal belongings. This will make it easy for you to pack. You’ll also save time searching for a place to stay, meaning you’ll have more time to plan what you want to do while there.
The relief and familiarity of having access to your own private haven could be enough reason to invest in luxury real estate. Also, you can rent your vacation home to others when you’re not using it, and this will give you an extra source of income.
Another Source of Income
Las Vegas luxury homes have the potential to produce rental income since most owners only stay in them a few times each year. You can use the rental income to cover the home’s maintenance costs. Keep in mind that rental income is often unpredictable. You won’t be able to rely on it for major expenses like the mortgage payment, but you’re sure to appreciate a little extra money.
To protect your finances, be sure to research desirable locations and the best communities. Location is the key factor to making the most rental income from your luxury vacation home. Consider the home’s size and the amenities available through the community.
Increase Your Assets
Purchasing a vacation home is a great investment since real estate tends to appreciate in value. The demand for luxury home rentals is increasing due to the popularity of services like Airbnb and VRBO.
Right now, short-term rentals in highly desirable locations have a high rate of return. They also feature a fast growth trajectory.
As you begin your search for a vacation home, look for homes with:
• Unique scenery
• Important landmarks
• Access to public transportation
These features can help you acquire the best return on your investment.
In many areas, vacation rental properties are viewed as vacation rental businesses. This means that many of the property’s expenses are tax write-offs. For instance, you would be able to write off insurance, maintenance costs, and repair expenses, which will help you cover your property taxes and mortgage interest.
Keep in mind that every city has rules, regulations, and particular requirements. Some areas have enacted strict rules on rentals. For example, they may limit how many times you can rent your home during the year to qualify for tax assistance. In most areas, rental income people collect from a vacation home during a certain period must be included on their tax returns. However, you should be able to deduct costs like mortgage interest and real estate taxes.
Before investing in a luxury home, discuss the pros and cons with your accountant to make sure that it will benefit you.
A Retirement Option
Another benefit of investing in luxury property is that you could turn it into your retirement home. Vacation homes help people diversify their assets, which is why most experienced investors have a property or two listed in their portfolios. However, your vacation home will become a significant benefit if you decide to use it as your primary residence.
Many luxury homes in Las Vegas are located in gated communities or secure resorts. If you buy a home in one of these communities or resorts, your vacation home will have added security. These types of communities or resorts often have security personnel on-site as well as security cameras and gates that you must activate to enter the grounds.
If you buy the right vacation home in the right location, it’s likely to have high liquidity. For instance, single-family homes located in solid markets are much more liquid than most commercial properties.
When you buy a luxury vacation home in a strong market, it will be more appealing to regular buyers and investors, and this gives you a larger pool of possible homebuyers. If you buy a home and rent it out for several years to develop a solid and profitable rental track record, then you should be able to ask a premium price for the home when you’re ready to sell it.
Imagine that you have the opportunity to invest in a $2.5 million low-income housing project or a large apartment complex. Compare these investments to a $2.5 million vacation home that offers you a consistent source of income. The vacation home is bound to be more appealing since you can stay there as well.
Solid Market Appreciation
Real estate is a solid hedge that you can use during economic times of inflation. When inflation increases, property values increase with it. Real estate prices rely on the market in which they’re located, but investors of luxury vacation rentals enjoy added protection because of their unique market appreciation. This protection is strengthened by these investments being located in desirable locations. Along with this, the value of Las Vegas luxury homes is not directly connected to their potential for revenue in the same way as other investments. For example, a luxury vacation home located in a desirable market is less likely to lose any value when real estate slumps.
If you were to buy a luxury vacation home in a community with a homeowner’s association (HOA) that decided to establish a regulation blocking vacation rentals, the value of your home would likely increase because the home would be located in an exclusive community.
Timing Your Investment
The best way to invest is to reinvest your compounding profits in your assets over a long period. This means there’s no way to time the investment of a luxury vacation rental investment perfectly.
When you profit consistently from a home for several years and reinvest in it, then you’ll likely see an increase in the value of your assets. This happens whether you’re investing in a buyer’s market or the rental one. Being strategic with your investments means you’ll be more likely to see an increase in equity.
While you might be tempted to wait for a market downturn to save money on a Las Vegas luxury home, the competition that you’ll face could delay your entry into the market.
Henderson Luxury Homes for Sale
The MacDonald Highlands community is one of the top gated communities in the United States. Amenities include dog parks, a tennis and athletic center, and communal outdoor areas. Community directors constantly work to keep the neighborhood updated with new upgrades. To learn more about the MacDonald Highlands community, call us at (702) 614-9100.