Have you ever dreamed of the day that you could afford your own vacation home? What if I were to tell you that it may be possible for you to make that dream a reality right now? How? By making a property in your favorite destination a vacation rental home investment that brings in more money than it costs! And the best news of all is that this is not a pipe dream. This is very doable. In the following video, you're going to discover 5 powerful rules of thumb when buying a vacation rental home, the advantages, the disadvantages and several invaluable tips. Plus, you'll get access to a complete tour of my personal vacation home so that you can collect ideas and model what I did. Here's a training on how to make your vacation home dream a reality:
Here's a sneak peak inside my vacation rental:
Rules of Thumb When Renting
Rule #1: The legality of short-term renting
The places that are the most ideal for vacation rentals tend to have a lot of hotels and tourism. These areas often have certain laws pertaining to short-term renting. Short term renting is typically less than one month (nightly, weekly). Make sure you talk to a property manager or even the city itself, to find out the legality of short-term renting in that particular area and for that specific property.
Rule #2: Vacation dream home with more than one peak season.
Something that many buyers fail to recognize when buying their dream vacation rental, is that they need to purchase a property that has more than one peak season. It comes down to money, as buying a rental property with only a few months worth of use from your renters will not bring much vacation rental income for you. The vacation home is not only for your renters, but for YOU! A property that can be rented multiple seasons in the year will give you more time to enjoy it too!
Example of One Short Season
Cape Cod Massachusetts
From Memorial Day to Labor Day (Summer) and is dead the rest of the year at winter arrives. To purchase a rental property here would not be working in your favor.
Example of Several Seasons
Sevier County Tennessee
3 Busy Seasons; March/April, June/July/August & October/November/December
Example of One Long Season
Many parts of Florida, such as the Florida Keys, are busy starting around Christmas time and then continue to stay busy all the way until Labor Day (the fall is the off peak time for Florida).
Rule #3: Track Record of Success
2 websites that I find helpful when you are beginning your vacation rental investment search are VRBO and Airbnb. Do your research and study the reviews of listings on these sites to get an idea of what other people are saying about a certain area/community. When you buy a property in an area people love, it makes less work for you.
Rule #4: Great Property at Fair Price
I typically look for steals when finding a property, but if you want your dream vacation home in the right area, then you are going to look for a great property at a fair price. Purchase the property with a traditional loan process: Real estate agent, mortgage, paperwork. It is MUCH harder to find creative deals in the dream vacation home market. This may go against my usual advice of finding cheap deals that feel like a steal, but it is wise for you to go the traditional route in this situation.
- You can own a vacation home and not feel like you are blowing money on it.
- It is an investment. It can make you money!
- "Free" vacations. You can stay at your own rental for free because your renters pay for it.
- Enjoy today! You don't have to be a billionaire to achieve this vacation home dream. It is a wonderful real estate niche that can bring in the cash flow you are dreaming of.
- Requires a Traditional Mortgage and Downpayment.
- Be aware of the cost to furnish and upgrade. You will need some of your own money set aside for this.
- You will have to balance YOUR vacations. The bigger peak weekends (Holidays, Labor Day) will make you the most money so you may want to give those up to guests. It will be worth it.
- Tenant’s trashing the place is another disadvantage to watch out for. I have a free training that goes into more detail about Vacation Rental Tips to keep in mind. You will be responsible for managing the cleanliness of your property, so keep an eye on it!
Vacation Dream Home Rental Tips
- Put a property manager in place to answer all inquiries on your vacation home.
- Listing your property on AirBNB and VRBO will take some of the grunt work out of listing your vacation home to renters.
- Pick a nice place in a a nice area to attract the right guests.
- Remember there will be extra expenses including utilities and the washer/dryer.
- Crank up the marketing once you own the rental home. Take professional photos and videos to show how great your property is.
- Little things make a big difference.- bikes, paddle-boards, etc. These add-ons will further incentivize people to rent your home.