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Financial forecasting consists of identifying your fixed expenses — expenditures you have regardless of whether the property is occupied. These are expenses such as property taxes, telephone rental, insurance, mortgage payments, satellite TV subscription, etc. Some of these costs you will already know — taxes, mortgage payments; others you’ll need to think about and make some educated guesses. If you already employ someone to do general maintenance and yard work, include that cost in your fixed expense figure.

Variable costs are those that change dependent on whether the vacation home is occupied or not. For example, cleaning expenses, heating, electricity, and long-distance telephone expenses are variable. By using a spreadsheet program, you can adjust the anticipated expenditures to match your forecast occupancy.