Make Your Vacation Home Pay For Itself

Editor's note: As a special feature for April, TheStreet.com offers a 20-story series on virtually everything about real estate. This installment is Part 15.

Buying a vacation house is a huge investment, but with the right planning, you may be able to offset at least part of the cost by renting it out when you're not using it.

One of your biggest considerations should be whether you want to hire a property management company or rent and list your vacation home yourself -- this decision is the one with the most money at stake. Hiring a property manager eliminates the inconvenience and ensures that a vacation home lives up to its name. There's no work and no headaches. If you live hundreds of miles away or use the house only a few weeks of the year, it may be the most practical option.

On the other hand, the tens of thousands of dollars you could end up paying a management company buys an awful lot of aspirin. Vacation property managers generally charge around 30% of rental income for their services, and up to twice that in major resort areas. With a ski property at a popular mountain bringing in up to $80,000 in annual rental income, there could be a lot of money at stake.

Christine Karpinski, author of Profit From Your Vacation Dream Home, says people who make the switch used a property manager for two to five years, on average, before opting to rent-by-owner.