Vacation Rental Properties Are The Perfect Investment for the Part-Time Landlord in 2023
Real estate investment is a great side hustle. Owning vacation property is the ideal way to ease into real estate investing. You can immediately start bringing in additional cash flow while keeping your day job. The reality is, it's never been easier to be a remote landlord if the situation is right. The only thing standing in the way of you owning successful vacation rental properties is finding the right property to begin.
But first, if you are interested in learning how you can finance vacation rental properties, click the link below to book a free strategy call today.
Vacation rental properties: the elevator pitch
There’s plenty of reasons to check out vacation properties for rental income. In a nutshell, some of the biggest and best benefits of owning a vacation rental are:
- You will have a new income vehicle.
- You'll have a place that you and your family can vacation to.
- You'll own property that accrues value over time.
- You'll own property in a desirable market, meaning it very well may sell itself.
It's never been easier to own a vacation rental
There's a thriving market for vacation rentals. Digital marketplaces have made it easier than ever for people to list their vacation homes or for vacationers to find them. Whereas in the past owning a vacation rental may have been a not-unsubstantial amount of work, today things are much more straightforward. Finding management, cleaning, listing, insurance and all the rest can now be done with a few internet searches from your phone.
Factors to consider in a vacation property
If you're thinking about taking the plunge and buying a vacation property, we've got a few suggestions for you.
First, no matter what, you should do your best to think about this as an investment property. You'll make your decision based on the bottom line. That means doing the research. You need to know the area you're buying and understand its tourism cycles. Get to know the average occupancy rate of rentals similar to your own and have an idea of what the average renter is like. Then, factor in the average length of stay and how much wear and tear that might entail for your property each year.
Then, do the math. Conservatively, can you reach positive cash flow (or at least break-even)? If not, no matter how much you love the area, move on and find a place that better fits your criteria.
Location is Key
When you are investing in vacation rental properties, there is nothing more important than making sure you are investing in a prime location. After all the success of vacation rental properties is almost always tied to the local tourism market. This means that if there is no demand for tourism, the rental will probably flop.
There are obviously some exceptions for properties in extravagant locations, but those are often marketed as luxury getaways and cater to a much more niche market that is much harder to get into. Typically, you will be buying vacation rentals that people will want to stay in while they are travelling to do other things, instead of your rental being the reason they travel.
Making a rental plan
If your rental is in an area with year-round tourism, you'll make more with short-term rentals. Even with a vacant day here and there, it shouldn’t be difficult to bring in more than your mortgage payment requires.
If you rent short-term, make sure to use a property management and maintenance company that will keep your property clean and well-kept. A good management company takes the stress out of being a remote landlord. Nobody wants to try to find an emergency plumber at midnight from a thousand miles away!
If your rental is somewhere that has only seasonal tourism, however, you may be better off finding a long-term renter and negotiating a couple of weeks of vacation each year right into the lease contract you sign with them. They'll get two weeks each year they don't have to pay rent for, and you and your family will get to spend time in your favourite vacation spot—in a home you own.
Discover How To Buy Unlimited Rental Properties With This Step By Step Guide
Do everything you can to set your vacation rental properties apart
Much of what makes a vacation rental such an appealing prospect is that it's all-inclusive. You come to a fully furnished home, with a kitchen well-stocked with cookware, silverware, glasses, blender, coffee maker, etc. Everything you need to make yourself at home—or even to throw a little margarita party.
Look at the task of stocking and furnishing your home as a crucial aspect of its marketing. Design something unique, relaxing, exciting—something that will pop in photographs and make people want to rent your property for their vacation fun.
At the end of the day, it's all about vacation
What makes owning vacation rental properties so special is, of course, the vacation itself, yours and your family's. So, go ahead and take all the landlord business as seriously as you want, but when vacation time comes around, make sure to relax, enjoy the views and spend time with the people you love. Your vacation rental is a passive investment for both your pocketbook and your quality of life!
Now, if you are interested in learning how you can finance vacation rental properties, click the link below to book a free strategy call today.