Miami is one of the hottest tourist destinations in the country.
Over 50 million people visited Miami in 2022 alone. If you're a property owner, there's a golden opportunity to turn your vacant rental unit into a lucrative short-term rental.
Owning a short-term rental can be a lot of work, but there are some major perks as well. In today's post, we'll look at some of the pros and cons of getting into the short-term rental business in Miami.
Don't let a booming tourism industry pass you by. Keep reading and learn what it takes to manage a short-term rental property today.
Pro: You Get Tax Breaks
One of the things that's really great about renting out a vacation home is that a lot of the expenses you incur are tax deductible. All you need to do is rent your home out for more than 15 days and use it for less than 14 days, and your rental is considered a business.
At this point, you'll report all of your rental income to the IRS, but you'll be able to deduct things like:
- Property management costs
- Maintenance expenses
- Utilities
- Property taxes
- Mortgage interest
The amount that you can deduct depends on the percentage of days that your unit is occupied by renters. It might be helpful to hire an accountant to ensure you're doing taxes correctly.
Con: Higher Maintenance
As mentioned above, owning a rental property is a lot of work and the unit itself will experience a lot of wear and tear. If you're going to keep it in good shape and keep new renters coming in, you'll need to invest in maintenance.
This is where a good property manager comes in handy, especially if you live outside of Miami. You'll pay a monthly fee and they'll take care of everything from routine maintenance and repairs to property advertising.
Pro: There's Less Commitment
Unlike traditional rental units, turning your real estate into a vacation rental isn't a huge commitment. You'll only have guests in the unit for a few days or weeks at a time. Once they're gone, you can occupy the unit yourself, decide to rent it long-term, or even sell it.
The flexibility makes it easier to manage your property. You're never locked into bad situations and, if you find that it's too much work, you can always chart a different course.
Con: It Can Be High Risk
Although there are plenty of risk-mitigating tactics you can take when renting out your property, there's always going to be some risk. No matter how much you screen your renters, you could always run into issues with property damage and other disturbances.
Is a Short-Term Rental for You?
Now that you know some of the pros and cons, you can make an informed decision about what to do with your real estate. A short-term rental is a great way to bring in a significant amount of side income, but it's not always an easy road.
It is, however, made easier when you hire a property manager to help you deal with tenants and take care of the property. At PMI Magic City, we're Miami's premier vacation property manager. Contact us today to learn more about our services and how we can help you manage a successful rental property in Miami.
