Your Guide to Buying and Managing Your First Vacation Rental Investment
Go Back To Previous PageGuest blog by Katie Conroy
Interested in expanding your financial portfolio and building your nest egg by getting into real estate? Purchasing a vacation rental investment
property is a smart strategy. Therefore, if you choose a booming market, you could generate substantial profits for years to come. Plus, some people find it easier to manage a vacation rental than finding long-term tenants for a residential property.
If you’ve never purchased an investment property before, you might get confused about where to begin. Though working with the experienced professionals at NestApple can certainly help you get started! But if you follow these essential guidelines, you’ll be well on your way to owning your first vacation rental.
Location, location, location
When you invest in a vacation rental property, you want to ensure that you’re buying in an area where you can reasonably expect a growing number of tourists in the coming years. As a real estate investor, you could choose to buy an empty plot and build a custom home. Or you could buy a prebuilt home. Either way, you’ll have plenty of options, and in the right location, you’re guaranteed to get a good return on your investment.
Determine Your Budget
Before you begin working with a real estate agent to find the right investment property, you need to evaluate your financial standing and do the math
to determine how much you can afford to spend upfront. According to Million Acres, your lender will likely require you to put at least 20% down. Get prepared for the possibility of going even higher. In some cases, you might want to consider buying a foreclosed home and putting the money you save on your down payment into renovations.
Take Security Measures
After closing on your property, you’ll want to implement security measures. After all, you won’t always remain in town to keep an eye on it! Therefore, you want to choose effective tools that won’t put you over budget. For example, you can install an alarm system with a monitoring service. But to save money, balance high-tech solutions with low-tech security strategies. For instance, planting prickly bushes and trimmed shrubbery near your windows can actually discourage would-be burglars, as can bright lighting.
Polish Up Your Property to maximize the value of your Vacation Rental Investment
Ready to welcome your first guests? Not so fast! First, you need to ensure that your vacation rental will be comfortable, aesthetically pleasing, and
spotlessly clean. Your guests will expect to enjoy all of the comforts of home, but colorful decor that reflects the region will make it feel that much more special. Dwell recommends developing a theme inspired by your location and saving money by purchasing some second-hand pieces. Look to local artists for art and wall decor!
If you want to add some high-end improvements, consider installing a hot tub and/or home sauna. The average cost of installing a hot tub ranges from $5,000 to $8,000 while installing a home sauna typically ranges from $3,000 to $6,000.
You may also want to take a closer look at the glass in your windows. Any cracks or damage can cause drafts, which can make the property difficult to heat or cool. So, make plans to hire a professional to handle such replacements; expect to spend between $170 and $375 to replace window glass, though this number depends on the window’s size and the materials needed to accomplish the job.
List Your Vacation Rental Investment
Finally, you’re ready for the bookings to start rolling in. Nowadays, there are many different platforms you can use to list your vacation rental. No matter which platform you choose to rent your home through, you should utilize some basic marketing strategies to attract renters. Take clear, professional photos, make sure that your rental’s web page is informative. Also, set a reasonable nightly price based on the market. You can advertise and manage bookings on your own or work with a property manager instead. The right management company can handle routine maintenance, cleanings, and on-site support for your guests. They can also screen potential tenants who will provide an extra layer of security when renting your home.
When you begin researching vacation rental investment properties, you may feel uncertain about how much to spend, where you should invest, and how you should advertise and market your property. Taking the time to research every step of the process is vital. Once you have your first renters booked for their dream vacation, you’ll be glad that you made careful investing decisions!
Ready to get started? Stop by NestApple today to begin your search for the perfect vacation rental
Georges has been working in Wall Street for the last 16 years trading derivatives with hedge funds. He has been an active real estate investor for over a decade. Georges graduated from HEC Business School in Paris and holds a master in Finance from ESADE Barcelona.
