Are you looking to make some extra money? Buying a rental property is a great investment that you can not only make money off of but use yourself!
Did you know 450 million people around the world use vacation rentals? And in the United States, 2.58 million rental properties are seasonally occupied. These statistics make investing in vacation rental property pretty appealing!
Ready to buy? Consider these seven factors before you dive into the market!
1. Consider Location
When it comes to any real estate investment, it is all about location. Maybe you have decided you want to buy a vacation rental property in a beach town.
The next step is to consider where exactly in that town it is going to be. Near the beach? Near the main street? These are all things to consider for marketing and safety purposes for your guests.
2. Who Are Your Target Renters?
Who is your target audience is a big question when it comes to buying a vacation property. Depending on who you want your target population to be, you will want to consider amenities that will cater to that population.
For example, if you want families to be your target renters, you may want to consider including kid and baby-friendly furniture.
Once you have figured out that you want a vacation rental and are ready to put it out to the world, you want to consider how you will market the property.
Air BnB and VRBO are very popular online companies for rental properties, but you will want to research before choosing one of these companies to make sure their terms and conditions meet your needs.
It is a great idea to look at and stay at a few rental properties to get a feel for vacation rentals. Check out Indianlakerentalhouses.com for some inspiration!
4. Local Laws and Regulations
Considering local laws and regulations is vital to get your rental property up and running. Many popular vacation areas are starting to have laws and stay limits around short and long-term rentals such as Air BnB and VRBO.
In addition, if you are renting in a condo or a property that is a part of a homeowners association you will need to consider what their policies are.
5. Maintenance and Insurance Costs
Before you buy your rental, consider potential maintenance costs and consider getting an insurance estimate. Taking these costs into account will better assist you when it comes to deciding what to charge for the rental property.
6. Mortgage Costs
If you are planning to get a mortgage for your vacation rental, you should be aware that mortgage rates for second homes and rental properties tend to be higher. You will also have to prove that you will be able to make mortgage payments on both properties.
7. Personal Use
Lastly, how much do you plan on using your rental property? You will need to factor in how much you plan on using the space if at all. Or if your family will be staying there. This will help you determine your potential revenue.
Buying a Rental Property-Are you Ready?
Once you consider these factors, you can take the next step into buying a rental property. Rental properties are an exciting investment with great revenue potential as well as a great way to make connections!
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