Are you looking for an investment that remains lucrative for years to come? Who isn’t? That’s why so many investors and individuals are purchasing vacation home rentals and leasing them out through a trustedrental management property company. By owning the property and allowing a vacation rental management team to do all the work, you can focus on enjoying the profits to come.

Of course, buying a vacation home rental is no small decision. Like any investment, you’ll want to carefully consider your purchase, perform market research, and evaluate the success of other similar and nearby properties. There’s a lot of work that goes into buying a vacation home rental and then opening the doors to visitors, but working with a property management team can help you make the right decision—and even do some of the work for you.

Now may just be the best time to buy a vacation property. According to a recentreport, vacation rentals are posed to recover at a much faster rate, compared to hotels, following the COVID-19 pandemic. To give you an idea of the rate of growth, Airbnb announced that they booked over one million future stays this July—the first time they’ve hit that mark since before the pandemic. Here, we’re looking into how to buy a vacation home rental and the important things to consider before making such an investment.

CHOOSING THE RIGHT VACATION LOCATION

We all know the first rule of real estate, right? Location, location, location. When selecting a vacation home property, you want to choose anappealing market that people want to visit. While flooded markets (like big cities such as New York or San Francisco) could seem challenging to break into, there’s also higher odds you’ll never have trouble booking up most of your dates. Be prepared, of course, for higher upfront costs.

If you’re looking at locations outside of major cities, think about the property’s proximity to attractions or places of interest. On vacation, many families want to escape to the beach, mountains, or a lakeside property to enjoy the beauty of nature and have fun. You can also go online to perform some initial market research to see which markets are emerging (and which are declining) so you can strike at the right time. A simple rule of thumb when degerming your property location: is this somewhere you’d want to vacation?

COSTS AND INSURANCE

Many people get into the vacation property rental game to generate more income, but you want to ensure you have enough money upfront to comfortably purchase and maintain the property. Taking on a second mortgage is a big step for any budget and most banks will want evidence that you can manage two mortgages. You also need to account for the additional insurance costs of your new property. Working with a vacation property management agency can help you understand the costs, both short-term and long-term, of investing in a vacation property.

ACCOUNT FOR SEASONALITY

Depending on the location of your vacation property, income may rise and fall on a seasonal scale. For example, most beachfront properties stay constantly booked during the summer months, while mountain cabins do well in the colder ones. It’s all about understanding the localized market for your property and what consumers are looking for.

This all means that, due to seasonality, you may not see a steady flow of income, but rather, peaks and valleys, and this income should be managed effectively throughout the year. However, there are some things that you can do to make your vacation rental lucrative throughout the year. Consider lowering your rates during the off-season or offering incentives to potential guests, like additional amenities or gift cards to local restaurants or attractions. 

ADVERTISING AND MARKETING

Before purchasing a vacation home rental, you want to consider available marketing strategies to attract potential visitors. Even if you’ve got the best house on the block, if no one knows about it you aren’t going to be generating much income. After you’ve purchased your property, consider working with professional property management agencies that are experienced with marketing and outreach.

You can also take advantage of the web by designing your own property site, posting on various property rental pages, and using social media to reach potential visitors.

Over time, it’s important to cultivate as many reviews of your property as possible. While commercial advertising can be effective in reaching countless people, it often lacks a personal touch that people want to feel like they can trust the property. In fact, a recent social media study showed that 92 percent of travelers value a review from a friend over commercial ads.

LOCAL REGULATIONS

Understanding the specifics of your local market, including laws and regulations, is crucial before making any major real estate purchase. The worst-case scenario if you plan on developing a property rental would be that you make your purchase only to learn that local laws are prohibiting renting out your property. At that point, there isn’t much to be done except for enjoying the vacation spot for yourself.

CONCLUSION – HOW TO BUY A VACATION HOME RENTAL

Vacation rental properties are becoming an increasingly popular way for families and groups to spend a vacation and for investors to capitalize on this income. In our share-economy, where businesses like Uber and GrubHub thrive, more people are comfortable spending time in vacation properties that are individually managed. These properties are ideal for large groups and allow you to enjoy the little comforts of home, like a full kitchen, while traveling around the world.

Reports project thatvacation rental revenue will hit close to 10 million dollars by 2020. More families are seeing the advantages of these properties over hotels and they’re looking for more options. If you’ve ever considered buying a vacation home rental, now may just be the right time. Consider, also, reaching out to aproperty management team to help you buy, maintain, and maximize the profitability of your vacation property.