Renting out vacation property can be a fun way to supplement your income and provide a fun experience to others on vacation.
To buy and rent out vacation property you must first lay out your plan of action, anticipating variables along the way. Let’s look at some ways to make the most out of your vacation rental property investment.
Secure a loan
If you are going to need a loan, the best place to start would be the internet, to use one of the hundreds of mortgage calculators available and calculate how much banks will lend you.
The world of lending has changed substantially in the recent years, due to the financial crisis. The ridiculously lax lending standards have since been replaced by more stringent requirements for applicants.
Your monthly outlay for cars and houses can now go no higher than 36% of your income, and in most cases you need a 20% down payment.
Keeping these things in mind, one must realize that the actual profit to be had is generally small at first. Of course anything done right can turn into a nice payday, but your best bet is to start small and if your ambitions allow, work your way up.
Once you secure a loan, the next thing you need to factor in is the extra costs.
Extra costs to take noteof
At the very minimum you will have to cover insurance, maintenance, utilities, and taxes.
If you don’t live with commuting distance to the property, you may want to hire a property manager or a caretaker (@PropertyComo).
Educate yourself as to what it takes to keep a home in that area in good condition.
Mountain and beach homes may suffer weather damage and need frequent repairs. When figuring the costs, always prepare for worst case scenario and slightly inflate the prices, so if disaster does strike, you and your wallet will be prepared.
One useful tip I can give to prospective renters is to buy a house that’s already been built, as opposed to buying land and building your own.
Building your own home will bring along a plethora of new obstacles and challenges that you may not be ready for. It may be an option if you have experience in the game.
Also, if you want to build your own home, your budget is going to have to be substantially larger than if you were to buy one.
Get a local real estate agent
A good real estate agent is invaluable to anybody buying property. Real estate agents usually have knowledge of the area and may know lots of little useful things about the area like community events that are held, or even hidden bonds.
A good agent will also help you with direction and any driving problems that may come up such as parking or rough conditions.
Set a marketing plan
You must make sure your property is appealing to potential customers. You will want plenty of things to do, like high speed internet, cable TV, nice TV’s, maybe a video game system or two.
It depends on what age group you are catering to, but either way your house should be directly on the beach, not somewhere near it, and it should have plenty of bedding for large groups to use.
It helps if your house is within walking distance of the nearest town, or at least the nearest store is.
One more thing you should do is visit your potential property in each of the four seasons, to get a feel for any seasonal problems or occurrences that may come up.
The roads may be impassable during the winter, or you may have an algae problem in the water near your beach house in the spring. You never know what can come up so once again, it’s always best to be prepared as possible.