Vacation Homes As Investments
Using vacation homes as investments can be a way to watch your money grow over the years if it is done the right way. Here are some simple tips to help you along the way to making the right choices in determining how to grow your real estate vacation home portfolio.
The location is the top factor is choosing prime vacation investment property. Houses can be renovated and even rebuilt, but the location of where they are cannot be changed. Look for high demand areas that are desirable locations for people going on vacation to draw in summer or winter vacation tenants. Year-round tenants are preferred if the weather in the area permits it. You might want to consider your time spent there as well. Some people chose to do a summer location so they can spend a few weeks in the fall at the home themselves or the winter.
Do your research on the area you are interested in purchasing your vacation home. If it is in Huntington Beach, California. Look up vacation rentals in Orange County to see what they are renting for comparable to the home you are interested in. A licensed real estate agent can help you do the research and tell you what kind of rental price you will be able to get for the home by comparing it to other rentals in the area. Find local attractions in the area as well. Figure out how close you are to them and what the local towns offer.
Numbers are everything in the property management business. Vacation rentals can be a little trickier since you are dealing with different seasons. It is best to have an experienced broker run the numbers for you to help you determine what the property will bring in rental prices at different times of the year. You will need to calculate your mortgage, fees, maintenance, and other necessary costs in managing the property into those numbers to get a clear picture of the profit. You don’t want to move forward unless there is clearly a profit and it can be proven in the numbers with real data.
The decision on whether to hire a property management company is a personal preference just as whether to hire a real estate agent to sell your home or not is. The idea is basically the same. If you are not in property management and you don’t have much experience with it, then you probably should not be doing it. Why take on the unnecessary stress if it is not needed? Homes that have management companies rent for more, stay occupied more and have happier owners. Find a local and reputable company to manage your home. They probably already have a database of trusted vacation renters to that area and it will mean that someone else can handle the check-ins and issues while you collect the profits.
Once you have purchased your first property, spend a few days there yourself. You don’t have to make it perfect, but try to make it comfortable with the basics of what someone would need. Give the home a good cleaning and maybe an artistic touch if you can. You want people to enjoy their stay and to keep coming back to your property for their vacations.