Warm spring weather and even a hotter market! Home sales continue at a near-historic level, with many homes going above list price and bidding wars with multiple offers.Hard for the
5 Important Things to Keep in Mind Before Investing in Vacation Rental Property
Dated: September 5 2018
One of the biggest steps to start your own vacation rental business is completing the process of purchasing a home. Having said that, there are various aspects which you need to keep in mind before buying a vacation home. Let us discuss a few pointers which will help you in making the process of purchase less overwhelming.
1. Have you thought of the location?
Before you start looking for homes, you need to think why exactly you want to have this second home. You can either buy the property for yourself for weekend getaways or give it out for rental. If you want the property to be a relaxing place for your friends and family then you’ll need to look for an area that is easily accessible for everyone and also has plenty of activities to do.
On the other hand if you are looking to rent it out, you have to choose a location which has a high rental demand throughout the year so that you don’t limit your income for just a few months. Also, you need to look at the growth rate of that particular location that you’re considering as well as the health of the local economy.
2. Don’t overshoot the budget!
It is always advisable to be in your budget. Buying a home which has high maintenance and monthly expenses can not only lead to stress but also may keep you from hiring a manager to take care of your property from time to time. Always keep in mind that you can always upgrade to a much bigger house later on once you are set with this particular home.
3. Do the research
Once you have an idea of the budget and the location, do a proper research of the area and the options available. Check whether all amenities are accessible from the property or not.
Also, check if the area has various activities for people of different ages. Understanding the surroundings is very important as you don’t want your renter to drive back to far-off places for anything they need in emergency. At the same time, understand the tax consequences of owning the property that you like.
If you are going to rent the property, then you’ll need to pay income taxes on your rental income. If you are not sure about these things, talking to an expert will surely help.
4. How much would you earn?
Do you know what would be the rent for the property you are purchasing? Have you done the calculations of the total expenses as compared to the rent that you’ll get? Talk to a local agency about how many months/weeks of the year you can expect the vacation rental to be in demand. Once you get to know that, you need to calculate an estimate of the rent you’ll earn and also take a note of the expenses.
5. Take professional advice
Whether you want the property for yourself or want to rent it out, seeking professional help can always come in handy. There are various aspects that we might not know which can be easily overlooked. A professional agency or an expert will help in answering all your questions/queries regarding your purchase and even may help in facilitating the acquisition.
Buying a vacation rental property can be overwhelming. If a friend or family member brings you an opportunity to buy a home, take your own time and do your research before taking any step. An opportunity that does not turn profitable will block your money and might also ruin your vacation days.
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Move Okanagan Real Estate
Annette has been in Real Estate since 1994. Her determination to uphold a tradition of trust, integrity, and expertise has earned her a long list of satisfied clients who recommend her at every opp....