6 Benefits of Owning a Vacation Rental in Ocean City, MD
Many buyers seek to own a beach house in Ocean City, MD. Whether it’s your first place, you’re up-sizing, down-sizing, relocating to a new OC location, or buying on a budget, owning a vacation rental in Ocean City, MD has its perks.
If you’re not buying a beach house in Ocean City because you think it’s just not possible, maybe it’s time to learn some awesome benefits of owning real estate in Ocean City, MD and earning vacation rental income.
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Help pay your cost of ownership
Owning an Ocean City, MD vacation rental property is a great way to help you cover some of your cost of ownership. There are over 1,500 condo buildings in Ocean City with condo associations, and there are town homes and detached home communities with homeowners associations. Owning a condo with a condo association or home with a homeowners association comes with additional expenses.
You can learn more about condo ownership and the extra expenses in my blog article the 3 extra expenses with buying a condo!
Buying a property in Ocean City and enrolling it into a vacation rental program can help you pay some or all of the expenses such as:
- Mortgage payment
- Condo association or homeowner association dues
- Commission to rental agency and/or online vacation rental marketing services
- Cleaning services and maintenance
You'll want to prepare yourself for the common costs to homeowners. Check out my blog article How Much Do Vacation Rentals in Ocean City, MD Cost Homeowners?
Control when you use it and when you rent it
If you enjoy the beach, you’ll love owning a place here. You’ll have control of when you use it and enjoy the beach lifestyle. You can block off owner weeks or weekends and allow the other days of the season to be for renters.
September and October is a great time to enjoy Ocean City. The water is the warmest and the weather is warm during the day and cooler at night. You’ll get more mini weeks during September and October, so it’s a great time to book some owner weeks and not lose much of your rental income for the season.
However, summer is the time of the year that most like to vacation. You can target weeks or weekends that are beneficial for your needs, and save peak vacation weeks for your renters. The choice is yours!
Prime Holiday weeks and weekends are at your control too!
For example 4th of July week is one of the more expensive weeks to rent, and if you own a property in Ocean City you’ll have control if you’ll use your unit or rent it out. Some owners rent their unit during peak holiday weeks and rent somewhere else, because they are making more rent than the cost to rent a hotel room.
Build equity in a high demand coastal real estate market
The Ocean City, MD real estate market is really hot! Inventory is low and the demand for properties is high. Due to the high demand prices are rising without needing to do any upgrades. However, if you can create much more equity by renovating a property. Renovations are easy and pretty affordable in Ocean City for most condos. Most of the time new flooring, paint, and a small kitchen will transform a unit creating more equity.
If you buy, renovate, and then rent the property you’ll make the property look more desirable to a perspective buyer when you’re ready for resale. You would be offering a prospective buyer a turn key investment, and rental income to cover expenses without a new buyer starting from scratch. A renovated property can also yield higher rental rates.
Subscribe to my Ocean City, MD real estate market reports on my website today. Get the latest monthly reports to keep you up to date on our coastal real estate market.
1031 Like-Kind Exchanges
1031 like-kind exchanges are common in coastal real estate markets like Ocean City and the Delaware beaches because if you’re buying a rental property, you’re buying an investment property.
This is a great market to take your equity from the sale of an investment property and transfer it into a Ocean City, MD vacation rental property. The Opportunity Zone in Ocean City, MD has some additional benefits for investing from 33rd Street to the Inlet!
You’ll want to discuss all the ins and outs of a 1031 exchange and Opportunity Zone investing with your accountant or tax attorney first.
Use the property for clients
Some use their rental property at the beach to please business clients by sending them on vacation at their beach place. It’s an awesome advantage to own a rental property while looking good to a prospective client. You may even be able to get some tax write offs too, but your accountant would be able to advise you best.