After several years of diligently saving money, I’m nearly ready to purchase my first home. Because I’ve been thinking about buying a home for so long, I know exactly what I want my house to look like. I desire a place that has three bedrooms and three bathrooms. I also need a quiet space to set up my home office in. I want a massive, walk-in closet in my master bedroom. My master bathroom needs to have double vanities, a tiled, walk-in shower, and a Jacuzzi tub. On this blog, I hope you will discover how to set priorities during your new home search. Enjoy!
Buying a vacation rental property can be a wise financial move as long as you avoid a few common pitfalls. The right vacation rental investment will provide your family with (almost) passive income for years to come, while also giving you your own vacation getaway when you choose not to rent it out. Here are four tips for buying your first vacation rental property:
Be Conservative When Taking out a Loan
One potential problem with a vacation rental property is that you can't always predict the vacation market or avoid periods of vacancy. Instead of opting for an expensive vacation home because you hope to pay the mortgage with your rental income, it's wiser to choose a more modest rental that you can easily pay for on your own during slow tourism seasons or periods of bad weather.
Work with an Experienced Real Estate Broker
Your real estate broker should be experienced specifically in vacation rental properties, as these real estate purchases present unique challenges. Ideally, you will plan a trip to the resort town or vacation area where you are interested in making a purchase in order to meet your real estate broker candidates in person and choose the best fit. If this isn't possible, carefully read client testimonials and reviews, and ask each prospective real estate broker for a video chat interview before you make your choice.
Research the Area
It's also important to spend time researching the area, and in particular, your competition. Pay attention to what other vacation rentals are renting for, and keep in mind that you will have expenses including professional cleaning, restocking supplies for the rental, and hiring a property manager. Make sure that you don't overestimate the amount of nightly or weekly rent you can reasonably expect to charge based on the quality and size of the rental, as well as the local market.
Hire a Property Manager
Property management companies that specialize in vacation rentals are a great way to streamline the vacation rental process and avoid common problems. Your property manager will handle advertising your rental, screening renters, processing payments, hiring house cleaners and repair workers, and will generally be your "boots on the ground" assistance so that you don't have to be physically present to run your vacation rental.
Since most property managers work on a percentage basis, they are very motivated to keep vacancies to a minimum and provide a top-notch vacation experience to your renters.
By following these tips, you will improve your odds of a wise vacation real estate investment.