3 Tips To Consider When You Buy A Vacation Home To Bring In Income

Posted on: 30 May 2017

If you dislike the idea of staying in a hotel for your annual vacation and bed-and-breakfasts are similarly uncomfortable, a vacation home is often the best solution. Fortunately, if the cost of a second home would wreak havoc on your budget, it's often possible to purchase a vacation home for your exclusive use for a pre-determined time period and rent it out the rest of the year to cover some or all of its expenses. Doing so can present with its own challenges and therefore, it's best to be aware of the following advice.

#1-Choose A Property With Features And Decor That Will Appeal To As Many Future Renters As Possible

Although it might seem obvious that your home should be attractive to a wide array of people, it's important to consider all of the different aspects that might be included in that statement. For example, a home with a washer, dryer, and dishwasher in the unit will appeal to more people than the same home without those household necessities.

In addition, since you want your home to bring in as much money as possible, you might want to look into a vacation property that offers multiple options for sleeping, even if you personally only need a one-bedroom for your time in the unit. More sleeping options often means that you can charge more for rent and groups of friends and big families will be comfortable renting the home. As a result, the use of bunk beds in at least one of the bedrooms is a good idea, as is the presence of a full-sized mattress, futon or trundle for the bottom portion of those stacked beds. 

#2-Research The Market For Vacation Homes In The Area You Are Interested In

Another aspect to consider is accessibility to the features in the area. Specifically, beaches, theme parks, restaurants and opportunities for shopping are likely to appeal to many renters. Therefore, you may be able to ask and receive high payments for the temporary use of your second home.

That means that in any area that you might buy your vacation home, you should investigate:

  • The popularity of rental homes  

  • The demand for those properties and whether or not there is a busy season for rentals 

  • The rent, deposits, and rental preferences of other landlords

  • The availability of real estate companies who handle short-term rentals, if necessary      

Your research will be crucial to your ability to benefit from renting out your vacation home when you cannot enjoy it. For instance, you might not want to be the only homeowner not permitting pets, as doing so can be quite attractive to possible renters. That is because you will be competing with other rental properties, which might be very well-known, and you need to determine if renting out the home during part of the year can bring in enough income in the future to make your investment a viable option. In addition, you might not want to be the only homeowner not permitting pets, as doing so can be quite attractive to possible renters.

#3-Determine How You Want To Facilitate The Rental Of Your Home

One of the bigger decisions that you will need to make is how you want to handle advertising, renting and managing the property. Unless you want your vacation home to be near your existing home, you will probably find that showing the home, reviewing rental applications and other actions associated with being a landlord is inconvenient to do long-distance. 

In that instance, many vacation home owners opt to permit a real estate company to handle the rental details. You might find that an all-inclusive real estate company is useful, as their maintenance persons will be local. Hands-on, nearby management of your new property might also prevent or more quickly address issues with future renters, like unapproved pets on the premises, too many renters staying at the home, etc. However, you should remember that there are expenses associated with those services and it's necessary to include that cost when determining if you can afford to buy a vacation home. 

In conclusion, a vacation home can be used as a rental property during much of the year in order to cover some or all of the expenses associated with owning it. As a result, you should be aware of the information shared above if you want a vacation home and are concerned about the on-going costs of that purchase.

Contact a company like Cimmaron Vacation Home Realty for more information.