By Marie Villeza
Families are taking vacations like never before. Buying a vacation rental is a popular investment option for so many reasons. The demand is high – and it’s an investment that will let you show your creative side. Don’t take the leap as an investor without a few considerations. Here’s some advice from Buy Sell Invest USA.
Know the vacation rental market.
The vacation rental market is distinct from ordinary real estate. Where one focuses on buyers, sellers, or long-term rentals, this is a more fast-paced exchange where listings go quickly and the asking price is almost always on an upward trajectory. Go into the market armed with an awareness of how the market fluctuates by season, and how to set your rates accordingly. You’ll need a digital marketer or you may want to partner with a rental agency to get the word out. Today, most people simply list on Airbnb or other online short-term rental listings.
While an Airbnb-type listing is enough for most property owners, a vacation rental agency can deal with cancellations and quick turnarounds, property upkeep, insurance requirements, and customer service.
Know your budget.
Before investing in a vacation property, set a budget. You don’t want to purchase a rental that you can afford only if you experience high demand and no unforeseen costs. Instead, brainstorm a few with worst-case scenarios. The terms of the loan can vary, but a 20% down payment wouldn’t be out of the ordinary. Add to that fresh paint, landscaping, any repairs–and the property may not make a profit for quite a while.
In addition to insurance on the rental property, you may want to consider forming an LLC. Not only will an LLC help protect your personal finances from liability if anything happen to your business, but it also gives you some advantages during tax season. An LLC is just one more financial safeguard that makes it possible for you to feel comfortable renting out the property.
Choose the property.
Clearly, location is a primary consideration here. The rental property you want should be in close proximity to area attractions, whether this means an easy walk to the beach, a great mountain view, or an easy subway trip to a downtown show or museum. Every state has places to vacation. A rental with more regional appeal may not stay booked, but it might be purchased for a bargain.
The property itself should be in good condition, so you can focus your attention on updating it with desirable aesthetics and amenities, instead of on dealing with structural or practical problems. Thankfully, researching is much easier in the Internet age, and finding a prime property and learning about all the different things you need to do to purchase it requires a lot less work than it once was.
Upgrades to make your rental more appealing.
Renters are attracted by a space that looks clean, new, and up to date. A rental that is filled with dated-looking carpets and dingy furniture will be off-putting no matter how desirable the location. Also, consider attractive amenities to include in the rental. Renters will be looking for things like a full-service kitchen, great television and entertainment systems, and good internet — perhaps even extra attractions like a game room or pool table.
You’ll put more than a little of yourself into the place, and you’ll have to be sure to reserve a few weeks per year for your own family. A vacation rental is an investment that will almost always be in demand, and one that will continue to grow in value. The best part is that it’s an investment you’ll get to share with others. When the checks come in, it will be good to know the renters enjoyed their stay.
Ready to invest in a rental property? Ready to sell? For a cash offer with no repairs necessary, contact Buy Sell Invest USA or tall/text Dawn Adams at (803) 221-3296 or (208) 757-1788.
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