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How Much Does it Cost to Own A Vacation Rental?

The cost of owning a vacation rental varies based on factors like the property’s location, type, size, and the amenities you offer. Here’s a breakdown of the expenses you might encounter when owning a vacation rental property:


Acquisition Costs: This covers the property’s purchase price, closing costs, and any renovations or refurbishments to make it ready for renting.

Management Fees: Hiring a property management company means accounting for their fees, which often range between 20% and 40% of rental income.

Cleaning and Maintenance: Ensuring the property stays in top condition requires cleaning between guest stays, performing routine inspections, and making repairs. While guests usually cover Standard Cleaning Fees, owners should budget for a bi-annual deep cleaning.

Utilities: Owners usually handle expenses for electricity, water, gas, and internet, especially for short-term stays.

Insurance: You might need specialized policies for potential risks, such as guest damages, natural disasters, or liability coverage.

Property Taxes: These taxes differ based on the property’s location and value.

Furniture and Amenities: Furnishing the property involves investing in furniture, appliances, and amenities. Plan for periodic replacements and upgrades.

Marketing and Advertising: Attracting guests can entail costs like listing fees, website development, or online ads. Property managers often handle this.

Guest Amenities: Expenses can include toiletries, linens, towels, and kitchen supplies. Sometimes, the Vacation Rental Manager’s Fee covers these.

Taxes and Permits: Your location may require you to pay occupancy or tourist taxes or secure permits for operating your rental. Guests typically handle sales taxes, and property managers remit them.

HOA Fees and Rules: Owning property in a homeowners’ association means paying dues and following their regulations.

Accounting and Legal Consultation: Consulting with professionals about taxes, legal matters, or setting up a legal entity can incur fees.

Miscellaneous Expenses: Plan for unexpected costs, like urgent repairs, landscaping, or property upgrades.


To determine the true cost of owning your vacation rental, create a comprehensive budget factoring in all these aspects. Remember, rental income can vary seasonally, and there may be times when it doesn’t cover all expenses. Plan accordingly.