.png){kind=small}
Are you considering purchasing investment property to short-term rent using companies like Vrbo, Airbnb or Vacasa? Owning a vacation rental can be a lucrative venture, but it's essential to approach it with a well-thought-out strategy.
Here are 3 things to consider to ensure it’s a financial success:
Location
Selecting the right location for your property is critical. You'll want to choose a location with high tourism demand and attractions that draw visitors year-round, such as coastal regions, mountain retreats, or cities known for their cultural and historical attractions. Proximity to local amenities, such as restaurants, shops, and entertainment, can also enhance the property's desirability.
Research local market trends and occupancy rates to understand the potential rental income and ensure it aligns with your investment goals.
Property Features
The features of your property can significantly impact its attractiveness to potential renters. Consider what amenities are important for vacationers in your chosen location, such as a pool, hot tub, or outdoor seating area.
Additionally, consider the property's layout and size. Families might prefer multiple bedrooms and bathrooms, while couples might look for cozy, romantic getaways.
You'll also want a property that’s easy to maintain. High turnover rates in vacation rentals mean more frequent cleaning and repairs, so durable and low-maintenance materials can save you time and money in the long run.
Finances
You’ll want to make sure the purchase price aligns with the potential rental income. Calculate your expected revenue based on local rental rates and occupancy levels. Don’t forget to factor in all operating costs, including mortgage payments, insurance, property management fees, utilities, maintenance, and marketing expenses. It's also wise to set aside a reserve fund for unexpected repairs or periods of low occupancy.
Analyzing your cash flow projections and return on investment (ROI) will help you make an informed decision and avoid financial pitfalls.
And a bonus tip that has made a difference in my own investment property: Consider hiring a property manager who can handle day-to-day operations and ensure a positive guest experience.
Have questions about purchasing an investment property?
As a licensed realtor, I can help you find the perfect investment property to grow your portfolio, whether you're looking for a fixer-upper, a rental property, or a commercial space.
Schedule a complimentary 30-minute chat, and I’ll answer any questions you have!
Additional Resources:
Home Valuation: Find out your home’s current market value
Realtor Matchmaking: Moving out of the area? I’ll find a great out-of-state agent for you!
Compass Concierge: Get fronted for the cost of home renovations!
Comments