Eight reasons why vacation home inspections are important

Why you need a vacation home inspection, even if you plan to use it as a vacation rental

Some vacation homeowners, especially those who plan to turn their home into a vacation rental, don’t bother with a home inspection. After all, it’s not going to be their primary residence, and they don’t see the need for the expense.

A seller may suggest there’s no need for an inspection if you’re making a vacation rental investment because the seller performed a pre-inspection, handled the repairs required, and updated the disclosures to reflect the current state of the home.

An agent may even tell you that your offer on a vacation home is stronger if you choose to forgo an inspection. But, in the end, that means a stronger offer for the seller—not necessarily an offer that keeps you in a position of strength.

Here are eight reasons why home inspections are important when buying a vacation rental investment property:

1. There could be hidden, costly issues.

Buying a vacation home is one of the largest purchases you are likely to make. Use the home inspection to understand the state of the home’s systems, infrastructure, and less obvious conditions. While sellers are obligated to disclose certain known defects about the property, there are plenty of things they might not know about (e.g., black mold in the crawl space or termites in an attic joist).


2. A home inspection helps keep everyone safe and sound.

Vacation home inspections can reveal structural issues, like cracks in the foundation or a leaky roofline. Over time, these structural issues invite in water damage, pests, and general structural instability that can be costly—and disruptive—to repair. Inspections can also reveal unseen dangers like carcinogenic radon exposure, or less obvious risks like faulty wiring that could lead to flooding or pipes made from materials that can contaminate the water. These risks alone make a vacation home inspection supremely important.


3. Inspections can call out un-permitted changes.

A vacation rental investment inspection can tell you what, if any, work has been done on the house, and it can reveal whether the work was done correctly and if it's up to code. Permitting shortcuts or improperly completed work can affect the home’s value today and tomorrow. They can also impact your insurance costs—or access to insurance, if the issue is grievous enough. The un-permitted changes may even prevent you from getting a loan, again, if the issues in the vacation home are serious enough.


4. Findings can be used in negotiations.

Depending on the conditions you set for your inspection results, you may be in a position to leverage the findings for a financial break on your vacation home. It’s not uncommon to negotiate for a price reduction if you plan to pay for the repairs needed. Or, you may be able to persuade the seller to fix some or all of the issues on their dollar.


5. An inspection can give you an “out.”

Your agent can write conditions into your offer to protect your earnest money, in the event that you need to walk away from the deal due to issues unearthed in the home inspection. Such conditions could also protect your earnest money if you and the seller try to negotiate on repairs but are unable to reach an agreement.


6. You can forecast future costs.

Home inspections can help you understand the age of your vacation home’s systems and infrastructure, so you can predict when you’ll need to replace things like a furnace, appliances, or roofing. This will help you dial in your operating costs and budgets for future repairs. It can also help determine what insurance coverage or warranties you might want to pursue. If the vacation home you’re looking to buy is part of a homeowner’s association (HOA), you can also gain some insight into how well the property’s exterior has been managed and the overall value of HOA dues.


7. Vacation rental inspections are often required.

It’s not uncommon for local communities to require home inspections on vacation rental investments, even in cities that aren’t heavily regulated. These inspections are designed, in part, to empower buyers and protect short-term rental guests from risk and unhealthy exposures. They also support the local economy with opportunities for home inspectors and contractors to serve homeowners with care and responsiveness.


8. You can trust that your vacation home is built to last.

If you’re one of the thousands of vacation rental investors who plan to retire at a property several years down the road, you absolutely want a home inspection—even if you’re planning to rent your home out to short-term vacation rental guests first.

Yes, there will be wear and tear on your vacation home before you retire there. And, yes, you’ll likely want an inspection before you finally move in. But, an inspection now can help ensure that the last place you plan to call home is, in fact, a home that’s built to last. You don’t want to face potentially dangerous or costly inspection issues in your golden years. The peace of mind gained from understanding your home inspection results can go a long, long way.


There’s no such thing as a perfect house.

As many agents will tell you, it’s likely your vacation home inspection will turn up some imperfections, big or small. It’s better to know about them up front. When you set conditions that include a vacation home inspection, you’re setting yourself up to make an informed decision about a particular vacation rental investment. The potential for savings, safety, and comfort is too important to leave up to chance.

Learn more: How to make money on a vacation rental



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* This document is for information and illustrative purposes only. It is not intended to provide “investment advice” or a “recommendation” regarding a course of action. The discussion is general in nature and has not taken into account your personal financial position or objectives. You should consult a licensed financial advisor or other professional to discuss your specific situation.