Renovating Your Vacation Home With Equity

Does your vacation home need some renovations, but you don’t think you have the funds for it? If you’re not in the real estate industry, you may not know what a HELOC is. It is an acronym for a home equity line of credit. Most homeowners that own a vacation rental often have purchased a home as a primary residence first. They have more than likely paid down a lot of their mortgage on their primary residence before making the leap to purchase a vacation home. This means they have equity built up in their property especially with the 3% value increase. If the vacation home needs some renovation, the homeowner can go to their lender on their primary residence and use the equity on their property to renovate their vacation home.

How Does HELOC Work?

The lender will have an updated appraisal on the property. They will approve an amount that you use as a line of credit. What’s great about HELOC is they give you a set amount of year to draw these funds for the purpose you need without paying any interest. It almost works like a credit card. They will have you sign an agreement with the amount you were approved for, how many years you have access to draw these funds, and how much interest with an increase in home value factored in that you will have to pay back. If you don’t use all the funds, great! It’s nice to have it there in case you need it, but if you don’t you won’t be penalized for not using it all.

A Construction Loan

If you don’t want to risk the equity on the property, you can always get a construction loan. The downfall is a construction loan is that you have to start paying interest instantly. This will not factor into the increase in home value. There are multiple options for renovating your vacation home.

HELOC Strategy

If you go with a HELOC and they give you 10 years to draw on your line of credit, we suggest you renovate per room. Start with rooms that sell a home like a kitchen and master bath. Renovate them during the slow season months and use the income to start setting aside to repay the line of credit or towards the next room. Some jump in and renovate the whole home. This is an option for areas that are rented out year-round. The Orlando area is seasonal with a low season beginning mid-August until Christmas. Take those months to make slight improvements and gives you a lower risk of taking equity out on your primary residence home. Talk with your lender about your options and see which is best for you. With more than 27,000 homes on VRBO alone in Orlando, it’s important to keep your vacation home renovated.


As you can see, we are extremely active with our marketing efforts. We would love to have the opportunity to manage and market your vacation home. Last year, we did not have one vacation home occupied less than 220 nights and our average vacation home was occupied 248 nights annually…that is over 20 nights a month! Check out more of our Orlando Vacation Property Management Tips.

Trey Duling

1-800-641-4008 ext 7007