Rental real estate investing can be an excellent source of income. However, the type of rental property you choose to offer can make all the difference in your bottom line. Consider this– properties that are used as a vacation rentals can go for 25% – 50% MORE per WEEK than typical long-term monthly rental properties. This approach is more convenient for property owners than ever before, especially when you choose to list your rental properties on websites that allow vacationers to find you, such as homeaway.com and vrbo.com.
It’s important to choose the right location when you are looking for a rental opportunity that will provide consistent income. Vacation friendly areas, such as properties located on lake fronts, beaches or near tourist attractions will be your best options. Don’t underestimate the importance of updating the property with the right amenities and hiring an exceptional property manager.
1. To keep your rental property full as much as possible, you’ll want to start by finding the right property. Keep the following things in mind when looking for the perfect vacation rental investment:
2. When possible, it is wise to select a location you have traveled before. This allows you to be familiar with local amenities, attractions, restaurants, etc. Most importantly, you will also likely be familiar with the types of travelers that frequent that area, and knowing your potential renters will allow you to customize your property to their needs for a higher return on your investment.
3. Consider choosing a property that is easily accessible to everyone, not just the experienced traveler. Locations that are off the grid or those that require specialty vehicles that can handle treacherous, unpaved roads, are not ideal rental properties. Inexperienced travelers or those lacking the right equipment will shy away from your property if it is difficult to get to.
4. Protect your bottom line. Buy inexpensive properties, renovate them and then rent them out. Top dollar vacation homes are too pricey to bother with. Your profit margin on a post-renovated price tag will be too low, for too long. Think about how much time you are willing spend to recoup your losses on your initial investment and then shop accordingly.
5. Don’t over upgrade. Sometimes “shabby chic” works in certain areas. Compare other vacation rental properties in the area and make the appropriate level of renovations.
6. Location is THE most important piece of this investment puzzle. It’s important to remember that vacation rental properties are unlike most fix and flip investments. Simply creating a “diamond in the rough” in any neighborhood will likely not yield the results you would hope for. Location is a critical component to ensure long-term success.
7. Once your property is renovated and ready to rent out, take the time to properly stage the location and invest in photos that are taken by a professional. Potential renters house hunt with their eyes – even for vacation homes, so take the time to make your property stand out from the competition.
Vacation rentals are trending, with more and more families opting to take group road trips as opposed to traditional, single family vacations. Consider making a vacation rental your next investment and contact us today!