Pros and Cons of Owning a Rental Property in Pigeon Forge TN Vacation Rentals


At Vacation Rentals, you will get properties for rental when you are vacationing. As a business-minded person, you might want to know what such a business can bring on your table. There are both pros and cons to owning such a business which include:

Pros and Cons of Owning a Rental Property

Income from renters:

The most important benefit which you will get for owning a vacation rental property is that those who rent it will provide you with a direct income. The checks on a monthly basis will be directed to your bank account which will offset some of the monthly expenses.

Value growth on the property income:

Because you are a property owner, you have a chance to gain from an addition in the value of the property with time due to the changing demands in the year, even if you don’t make any changes to the property. This is variable as it tends to depend heavily on the area where you are having your property.

There are some areas where the value might rise significantly after a few years, while in other areas, it might just remain flat. The growth in value holds pace when the inflation is at its minimum. If you are in an area which is above average, it is possible to find you are inflated, on the other hand, if you are in a stagnant area, then you will need to keep with the inflation


It is likely to add additional value to your property as you upgrade and maintain it. When you do things such as having to repaint the house, adding fresh sidings, having to refinish the inside, then it will add value to your property without the need to use a lot of money.

Apart from the above allowing you to charge more for rent, it is likely going to increase your property value in case you decide that in future you want to sell it off.  If you are the type of person who enjoys home improvement projects, this will be a major attraction for buying a rental property. You will end up having a chance to fix it up after acquiring it as well as in between renting it out which will give you nice dividends.

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Though having rental property comes with its advantages, you must learn about its disadvantages so that you make a decision which is informed. Though the cons are not much, you are better off learning about them

The concentration of assets:

The main drawback of investing in a rental property is that most of those who own such properties have a serious concentration of property. With concentration, it means that you will not be in a position to diversify. The investment is in a specific house and in a block that is specific in a certain neighborhood in the city.

In case the neighborhood goes downhill, then you are going to lose your investment. In case the block goes downhill, you are going to lose a lot of money with it. if there is something unfortunate that happens to the house which the insurance cannot compensate, you will lose your investment.  So whether you like it or not, when you own a rental property, you are trying yourself in the real estate market in a very tight manner.

When assets are concentrated, that is not a wise strategy of entering into business. However, if you have more wealth, then this factor becomes irrelevant as you will be able to diversify in different regions and thus, in case of any disaster in one region, you still have something to lean on.

Tenant risk:

It is not a guarantee that whoever is renting your property is going to pay you. Even when the times are good, and you seem to get the best tenant, chances are that it is not a guarantee that revenue will stream.

There are times when you will get great tenants who pay the rent on time from one month to the next but it is never a guarantee all the time. There are those tenants who will not pay regularly while others will fail to pay completely. This means that there are months when you will go without rental income. You will need to deal with the headache of evictions and no payments.

Some tenants might cause a lot of wear to your property than others. Though you have a security deposit, that is still a risk and a cost at the same time. There is also the risk of missing to have a tenant at all, meaning you will have a period when your property doesn’t bring any rental income at all. So you have to brace yourself for such times.