What You Need to Know Before Buying a Vacation Rental Investment Property
Renting out your vacation property can be an excellent way to own a vacation home while supplementing some of the costs. However, vacation homes are a huge investment and, if it is done without much forethought, you could encounter some major headaches along the way. Take time to do your research and ask yourself important questions about your goals. Then, you will be able choose the best vacation rental investment property for your needs.
Know The Laws
The local County communities are beginning to enforce strict vacation rental regulations. Take time to research what laws are in place and how many days homes in certain areas can be rented for. While communities may allow vacation rentals, they may have specific guidelines and restrictions. In addition, homes in covenant neighborhoods may have other rules and regulations you will need to follow. Make sure your goals for your vacation home line up with any regulations that may be in place.
There are different tax advantages to each approach. You should consult a tax professional to discuss your plans and make sure that a rental property is the right investment for you. You should also look into property taxes. Knowing how much you will need to pay in property taxes will help you estimate how much you will need to earn in rent to recover these costs.
Do You Enjoy It?
Would you like to vacation in this home? If you are likely to use the home for yourself, will you enjoy spending time in it, doing repairs, and being part of the community? If you love it, it is likely that renters will too. You may want to consider other factors including available amenities, location, and peak- and off-peak seasons. Peak-season rates can often compensate for slow seasons. Research how long each season is and whether or not you can command high enough rates to bring in enough income to meet your goals.
Maintenance is a big part of owning any home. It becomes even more challenging when you live far away from your home. Local short-term regulations require that someone be able to be onsite within a short period of time, should emergencies arise. It is important to plan for how much you will need to spend on maintenance and upkeep. Will you hire a professional property management company to look after your home? Do you intend to do repairs on your own? What will travel cost you? Do you have connections to local contractors for major repairs? You will need to respond quickly to maintenance needs if you have renters in the home. Otherwise, they will have a bad experience and share that experience with other potential renters. Before you purchase your home make sure you know how you plan to cover maintenance costs and that you have the resources to ensure the maintenance gets done.
A Fun Investment
Owning a vacation rental home can be a very fun investment. Bringing joy to travelers is rewarding, earning extra income is helpful, and having your very own vacation spot is ideal. Before you make your purchase, know the rules and regulations, and the anticipated costs. Then you will be able to determine whether or not a particular vacation rental home will meet your investment and/or your personal needs.