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Vacation Home Operating Costs
Most sources recognize that the cost of
maintenance, replacement, repair and operation of a home is around 3% of the
cost of the home annually. Well Vacation homes are much the same. Costs that
owners should consider are provided.
Management Fees
Management fees from Palm Tree
Vacation Homes cover the cost of administration of the account, preparation of
the monthly statements, payment of utility bills, and covers some operational
costs. This will be the smallest cost you will incur.
Maintenance Fees
Maintenance fees are typically charged monthly
and included pool service, pest control , lawn care (if needed) and cleaning
fees.
Repairs & Replacements
Some appliances break down and general wear and tear items become
unusable, no matter how good our preventative measures and maintenance is. If
you budget an amount each year out of your rental income to cover the cost of
such items, you should be covered without the need for expensive warranties.
Utility Costs
The second largest operating cost
of your vacation rental property would be your utilities. Electric, water, gas,
cable, internet and phone amount to a large chunk of your expenditure.
Mortgage and Insurance
Unless you paid cash for your vacation home, the
mortgage will be your biggest out-going.
HOA DUES
The third largest and often most forgotten expenditure
will be your Homeowners Association Dues, which can be somewhat high in the
resort communities.
Property Taxes
Again they can't be avoided, but they can be
budgeted for. They come in close as the fourth major yearly expense.
Replacements
These are different to the repairs & replacements
mentioned above. This expense should be budgeted for when you want to upgrade
(which you will need to do) for such things as new TV's, Replacing carpet/tile
and beds.
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