META: Discover five essential tips to find the perfect vacation rental property with our comprehensive buying guide that can help you thrive with your property investment!
Vacation rental buying has become increasingly popular in recent years, and for good reasons.
More and more people are looking to travel independently these days and are steering away from the classic hotel and resort vacations instead of self-hosting.
Just look at platforms like Airbnb, which is effectively a property rental platform that holidaymakers use to find the best properties to make their next vacation the best one yet.
The world has genuinely felt as though it’s on hold over the last few years, namely due to the pandemic, but the world is opening up, and more people are looking to get away.
In 2022 alone, the travel industry boomed by 60%, with another 30% predicted in 2023, with a record number of nights spent away from home (1.53 billion), which is very close to pre-pandemic levels.
For investors, this is an ideal time to get into the market and find success.
With an increasing number of people looking for vacation rental property, if you’re interested in investing in the hottest locations and getting the best price, now is the time to get involved.
However, and this is a big however, it’s important you choose the right property to get the highest return on investment (ROI) possible.
That’s precisely what we’re talking about today as we dive deep into the world of vacation property buying and rental, exploring what you need to know to get the best deal and return.
Let’s jump into it.
#1 – Research Your Potential Locations
First things first, the location of your property is the most important factor to consider.
Of course, our perfect property could be just around the corner, or it might be on the other side of the country, but there’s no right or wrong here. It depends on what you want your experience to be.
Many investors want their property to be accessible so they can check in, prep it for guests between booked stays, and basically keep an eye on it.
For others, you may be happy having it across the country and outsourcing the property work, but just remember; this will eat into your final profits.
Either way, you must take time to research and make sure that your destination meets all of your needs and expectations.
There is a market for every kind of destination these days, so you’re spoilt for choice.
Such markets could include;
- Beaches
- Rural, scenic countryside
- Mountains with skiing or exploring opportunities
- Accessibility to hiking trails, kayaking spots, or farmer’s markets
- Seaside spots with boat or yacht access
- Urban with a bustling city life
Whatever fits with your ideal destination should factor into your decision-making process.
We recommend taking some time to explore the type of vacation you want to niche yourself into, then make a list of all possible locations.
With a list of maybe 5 – 10 locations, look into any local regulations pertaining to renting out properties on a short-term basis to avoid any surprises after signing on the dotted line.
Ensure zoning laws permit rentals in the area and find out what restrictions may exist surrounding noise levels, parking rules, and other specifics related to operating such a business legally before investing in purchasing a vacation rental.
Check Out Attractions
Also, and perhaps more importantly, check out what people can do in the area of your property.
What tourist attractions are in your local area? How are people going to spend their time? Are you in a hot spot and a great location that excites people? Maybe you can even team up with local attractions to offer holidaymakers a better deal when they’re staying with you.
These are all great incentives to consider that can make your property more attractive and your overall ROI much greater.
Doing all this research upfront will save you headaches down the road when it comes time to enjoy your new investment property!
Expert Tip: Don’t Forget Seasons
With most vacations, attendance is seasonal. If you’re buying in the mountains, only the months of November through to early April are considered to be ski seasons, just as the summer months are best for beaches.
This might be ideal for how you want to do things, especially if you want to stay in your property yourself when it’s not rented out, but it’s worth considering that it’s rare to be fully booked all year round.
#2 – Do You Want To Hire A Property Management Company Or Manage It Yourself?
So, let’s say you’ve found a couple of properties you like, and you’re looking into how you can run them as a vacation rental owner.
A bit of work will need to be done, such as making sure the property is up to standard initially and between guest bookings. You’ll need cleaners, and you’ll need to ensure the property is always up to local and State standards.
You can make life so much easier when you’re using a property management company.
Using a property manager means having someone else take care of all aspects related to running the business, including marketing, tenant screening, maintenance, legal compliance, financial tracking, rent collection, and more.
They may also be able to provide additional services such as landscaping or snow removal.
The cost of these services varies depending on the size of the property but typically ranges from 5-20% of gross rents collected per month plus other fees for specific tasks like repairs or emergency response.
However, this can eat a large chunk of your earnings that you may not be happy to part with.
This is the mistake I made when renting properties for six years, meaning I had six years of my income messed up because I didn’t research how much I was paying out and where those costs were going.
On the other hand, if you’re not outsourcing the work, you’ll need to do it yourself.
Managing a rental requires more work than hiring a professional but gives you complete control over your investment decisions.
You’ll likely spend significant time advertising vacancies, screening tenants, overseeing general upkeep, and responding quickly when needed.
This approach allows for greater flexibility since there are no set fees or contracts involved with self-management; however, should any issues arise that require expert knowledge or licensing (e.g., plumbing repair), then hiring a specialist would become necessary at extra expense.
When deciding whether to use a property manager or manage the rental yourself, consider both options carefully while keeping in mind key factors such as;
- Budget constraints
- Desired level of involvement in daily operations
- Required expertise needed for specific tasks
- Availability of local professionals who specialize in this field
- Your overall comfort level with investing in real estate
My Expert Tip
Ask your property management company whether they’re charging a third-party fee on top of their fee, such as Verbo. That’s usually another 2-3% on top of their fee, and you can undoubtedly get savings here if you’re not happy to pay that amount.
#3 – Use A Local Real Estate Agent In The Market You’re Buying In
When it comes to purchasing a vacation rental property, engaging the services of an experienced local real estate agent can be highly beneficial.
Not only do they have valuable and extensive knowledge about the area and current market conditions, but many are familiar with financing options available for buyers looking to purchase a second home or investment property.
Furthermore, they may also be able to provide insight into upcoming developments in the community that could affect future value.
I’ve even found during my experiences that many local estate agents will have worked in many similar contracts and can even go as far as to offer recommendations for local cleaning services and contractors, which can save you a ton of time and spending at every stage of the process.
This all comes together to ensure that all aspects of the transaction are handled professionally and efficiently while minimizing any risks associated with buying a property abroad.
My Expert Tip
Working with an established local agent provides peace of mind throughout the entire process. When investing in something as significant as a vacation rental property, having someone knowledgeable guide you through every step can make all the difference between success and failure when it comes time to rent out your new asset.
#4 – Online Presence Is Everything
Having a strong online presence is essential in succeeding when managing your rental property and marketing it out to the world.
Being online for all of us is like navigating through a jungle of information, and jet setters and adventurers are looking for all the information they can to make the best decisions possible.
This means your online presence needs to be spot on. Otherwise, shoppers will simply click away and book elsewhere.
And don’t forget, first impressions count more than anything, so you need to make sure you’re getting your presence right the first time.
Sure, this part of the process can be overwhelming, so here are a few tips to help you feel confident!
Tip #1 – Nail the Listing
Make sure your online listing includes everything anyone would need to know, including;
- Location
- Local amenities and attractions
- Pricing
- Important property information
- Reviews and testimonials
Tip #2 – Showcase Your Quality
Nobody wants to use their only vacation time to stay in a less-than-desirable property, so people will be scouring your imagery with a keen eye for anything that looks wrong. To counter this, you must present only the highest quality imagery showcasing your property in the best light.
This could be accomplished by getting professional house photography or even a virtual 3D tour that people can use to explore the property online.
A YouTube video can work a treat!
Tip #3 – Consider Using Third-Party Websites
Platforms and apps like VRBO and Airbnb get a lot of traffic and are usually the starting point for people looking to find a vacation property. If you’re not on the site, then you’re missing out on a huge chunk of potential traffic.
Ensure you’re listed, your profile looks competitive and meets expectations.
And don’t forget about social media!
With a creative and bold approach to social media, you can really stand out in your area and attract people from across the country to come and stay with you.
Do this through videos, blog posts of things to do in the area, and highlighting past guests’ reviews, testimonials, and case studies and how happy they were staying with you!
#5 – The More Guests You Can Accommodate, The Greater Your Bookings
Regarding vacation rentals, one of the most important factors contributing to your success is the capacity to accommodate guests.
Quite simply, the more guests you can accommodate, the greater your bookings are likely to be.
This is because a larger property can fit both families while allowing for larger groups, whereas small properties are just small.
This could lead to potential customers returning on multiple occasions and encouraging them to recommend your rental property to their family and friends.
Therefore, when looking at available properties with an eye toward purchasing a rental home or apartment, always consider how many people each dwelling can comfortably accommodate.
Of course, certain dwellings might come equipped with extra pull-out couches or futons, which can serve as additional sleeping arrangements; however, these should still be considered during any search for suitable vacation rentals.
Conclusion
The vacation rental property market has seen immense growth in recent years as more individuals seek to invest their money for long-term returns.
By following these simple yet effective guidelines outlined here today, you can rest assured knowing that you’ve done everything within your power to secure yourself an ideal holiday rental property fit for generating maximum return on investment moving forward!
Looking for more information? Check out the rest of the blog or get in contact for personalized advice that gets tried and tested results.
I hope to hear from you soon!