Vacation rental properties are a hot investment among real estate investors right now, and with good reason. Vacation rentals and other types of rental properties are a great way for you to earn another stream of income on a consistent basis. Of course, it’s not as simple as buying a house and then having tenants give you money every month to live in it— there’s a lot of work that goes into being the owner of a successful rental property. While it is a very profitable investment, it’s still a risk, and you have to be prepared to handle everything that comes with finding, buying, and renting a rental property.
Familiarize Yourself with Laws Regarding Vacation Rentals
Vacation rentals aren’t allowed everywhere, so before investing in your first rental property, you need to know where exactly you can have a vacation rental. The reason that there are strict rules regarding vacation rentals is that they’re considered short-term rentals (tenants rent for less than six months), and many areas require tenants to rent for more than six months.
Make Sure You’re Willing to Take on the Landlord Role
When you own a property and rent it to others, you’re the landlord, which means that you have a long list of responsibilities. As the owner of a vacation rental property, it will be your responsibility to make sure that the property is thoroughly cleaned and maintained between each tenant that stays on the property and that all amenities are in good working condition for each guest.
If there’s a problem with the property, you’re the first line of contact for your tenants, so it’s important to have good communication skills and to be prompt with your responses. Your reputation as a landlord can determine how successful you’ll be in the rental property business. Good reviews will encourage more people to rent from you, while bad reviews will cause tenants to reject your property listing.
Location is Key When Choosing a Property
“Location, location, location” is a phrase that is widely used in the real estate industry when looking for a house, and there’s a reason for that. The location of your rental property, no matter what type of property it is, is the most important thing when determining how successful you will be.
When it comes to vacation rentals, choosing the best location might be the easiest to determine out of all of the different types of properties, but it’s still a good idea to do your research. For example, you’ll likely want to choose a location that is a popular tourist destination, but keep in mind that certain times of the year may not be as busy as others. Instead, think about a location that sees many visitors all year long, such as Florida or California. Check out Los Angeles real estate trends to see for yourself.
Know That There Are Plenty of Resources Out There to Help
Investing in a vacation rental (and any type of real estate) is a huge commitment, especially in the ever-shifting post-pandemic market, and should be carefully considered. Do as much research as you can before purchasing a vacation rental. Choose a realtor you trust and talk to other people who have invested in real estate. There are also dependable loan companies that are willing to work with you to help you meet your investing goals.
There are also property management companies that can be the landlord for you if you feel that you can’t perform all landlord duties due to work or other life commitments. Just know that this is an added expense but can also make things a lot easier (and more successful) for you.
Vacation rentals aren’t the only types of rental properties that you can invest in. You also can invest in commercial properties (businesses), apartment complexes, hotels, condominiums, duplexes, or single-family homes. It’s up to you to choose which type of property will be the most beneficial to you.