If you want to start making money from property, a vacation home may be something that you’ve given serious consideration to. Vacation homes are hugely popular, particular with many singles, couples, groups, and families wanting to enjoy a more comfortable, private and homely experience during their stay. As today’s travelers shun hotels and resorts for private villas, there’s never been a better time to invest in a vacation home. We’ve put together some of the main things to consider.
#1. Location:
One of the first things that you’ll need to consider when investing in a vacation home is the location. It goes without saying that the best vacation homes are in popular tourist locations where you are bound to get a high level of interest. For example, JP Real Estate Experts can help you find a dream vacation home in Myrtle Beach, a fantastic area that’s popular with vacationers thanks to the stunning scenery, amazing weather, and friendly locals. The location that you choose will make or break your vacation home. If you plan to rent the home out for most of the year but will also be using it yourself, opt for a popular location that you have visited and enjoyed in the past.
#2. Management and Maintenance:
You may be wondering if there are any additional fees, charges or expenses that you’ll need to look out for when purchasing a vacation property as opposed to a regular house, apartment or condo for rental. Firstly, it’s important to consider the higher management fees; since your vacation home will be changing residents more regularly, it’s vital to hire the services of a specialized vacation rental management service who’ll ensure that your property is perfectly prepared for each client and will be there to respond to any issues that they may have during their stay. Many vacation property owners will manage it themselves, but it’s usually their main source of income.
#3. Consider Insurance Costs:
The downfall of a gorgeous rental property in a stunning oceanfront location is that it’s almost guaranteed to be in a high-risk flood zone. You will certainly need to ensure that your home is insured against flood damage, which is almost always higher than regular insurance costs, particularly if your property is more susceptible to flooding than others. Since you will be allowing the general public to stay in your home, it may also be advisable to get some liability insurance, to ensure that you are protected in the event of a claim if somebody is hurt or injured in your property.
#4. Covering Mortgage Costs:
Many people like the idea of buying a vacation home since they can use it themselves and save thousands on a vacation every year. However, if you’re planning to finance the purchase of your vacation property with a mortgage, this could leave you losing out instead. Before buying a vacation home, ask yourself if it’s really the best option for your family vacations – bear in mind that during the weeks or months you’ll be staying in the property, you’ll be losing out on valuable rental income, particularly if you want to travel at peak times during the year. If you plan to stay in your vacation home yourself at any point, ensure that your budget allows you to continue covering the mortgage payments and other regular costs during that time.
#5. Furnishing and Utilities:
Whilst it’s possible to rent out a regular house or apartment unfurnished, a vacation rental must be ready to live in every time new guests arrive. Unless you’re able to buy an already furnished vacation home, bear in mind that you’ll need to budget for the cost of furnishing all the rooms and making it a ‘home from home’. Unlike furnished rental homes, basic furnishings aren’t enough – a vacation rental must come complete with plates and cookware, silverware, televisions, storage solutions, clothes hangers, towels, soap, shampoo, and toilet paper. Bear in mind that you’ll also need to maintain and replace these items over time, incurring further costs. As the vacation rental owner, you’ll also be expected to cover the cost of all the utilities for the home, including gas, electric, water, broadband, and cable television costs; bear in mind that these will often cost more in an exotic location. If you want to ensure that your property is cared for well, you may also want to factor in the cost of hiring a daily maid or cleaning service.
#6. Taking Bookings:
Before making a massive investment in a vacation property, it’s important to make sure that you’re clear on how you’re going to take bookings. It may also be a good idea to conduct some market research on social media to see how many potential customers you have who are interested in the home that you have to offer at the given price. Bear in mind that most people today will pay for vacation rentals using a credit card, so you’ll need to think about getting set up with the right merchant to accept credit card payments. You’ll also need to consider the cost of setting up a website and social profiles advertising your rental and providing an online booking form for clients to use.
#7. Advertising:
Thanks to the internet, it’s become easier than ever to market a vacation rental, however, you’ll need to expect advertising your property to cost you. One good option to consider is influencer marketing; to do this, you’ll offer a free or cheap stay to a popular online ‘influencer’ or celebrity, who’ll then advertise your vacation property across their blog and social media channels. To save money on advertising, you can use the power of social media to gain exposure for your property in travel groups on Facebook, vacation boards on Pinterest, and Twitter users who regularly follow travel trends. To succeed, you’ll need an easy-to-navigate, informational website as a base for your brand.
A vacation property can be a great way to make money, but is it worth the investment?
