Whether you’re starting from scratch or changing up your current strategy, vacation rentals can present a great investment opportunity.
Buy with upside potential in mind, just as you would with any other investment
You make your money on the buy, not the sell side. Take the emotion out of the equation and make solid decisions based on the numbers you have put together.
Look for a property that will hold or increase in value or look for one that can be converted to a long-term rental property if there are changes to the market.
Understand the scope of your updates and upgrades
Have a solid idea of the updates and upgrades you’ll be making to the space. For some rental properties, you’ll be using builder-grade materials and holding off on fancy bells and whistles. In more upscale markets, however, luxury fixtures and finishes are essential.
Always make sure that you have left yourself some money to take care of unforeseen changes, if necessary.
Hire a professional management company and interview several
Long-term rental management is different from vacation rental management. The focus is different and the timeline for communication is different, as well. Make sure that the property management company you choose is set up for the demands of the type of rental market you’re appealing to and that they offer the menu of services you’ll need in order to be successful and garner the rave reviews that will keep your property filled.
In addition, make sure that your management company is set up for the market segment you’re targeting. For instance, a luxury rental requires a different level of service than more modest accommodations.
Convert an existing property, if at all possible
If you have an existing property, whether a vacation home or an inherited property, try to convert it to a vacation rental. It is more than likely already furnished and well-stocked with the essentials, ready to plug and play with some updates or upgrades.
Follow some of the relevant Facebook groups and look online for tips from tried-and-true hosts
Get active in online communities of vacation rental owners and folks who are located in the area where you’re investing. You’ll learn from their mistakes, you’ll start to get a handle on the best service providers, and you’ll find out what value-added amenities and features are most popular with guests in the area.
You need to know how long it’s going to take you to start renting out the property. This is especially important in the case of markets where rentals are primarily seasonal and where you may end up going several months of the year without consistent income.
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