Investment Property: Should I purchase in a vacation or non-vacation community (income tax, renting)

[jojo7]

Purchasing a home and renting it out. Is it a better idea to purchase a home and rent it out to vacationers in a "vacation type" of area by the night/week or is better to purchase in a non-vacation area and rent with a yearly lease. I would love to hear the pros and cons of both. I did read that it is sometimes less damage to the property when renting to vacationers since you are getting different people weekly but would love to hear if anyone has had experience with one or the other. Thanks!

[DowntownVentura]

You will have to decide if it is better or not. I can give you a short list of differences

• Income taxes are different on vacation homes vs rentals, especially if you also use the vacation house.
• Income is different in vacation homes, particularly in seasonal areas.
• Vacation homes typically are furnished, traditional rentals unfurnished.
• Traditional rentals can have a more active resale market but this really depends on the area.
• Vacation rentals are way more maintenance, even with a property manager.