Did you know that the travel and tourism industry generates roughly $1.9 trillion per year? It should come as no surprise that luxury vacation rentals make up a significant portion of this revenue.
For many investors, rentals are the best way to have their cake and eat it too.
It allows you to enjoy a property that you love while paying for it with luxury vacation rentals. However, knowing how to get started buying vacation rental properties can be quite overwhelming.
That’s why we made this brief vacation rental property guide. In it, we’ll be going over some vacation rental property tips for your investment needs. Let’s get started!
Find a Good Location
The first step is to find a good location for your luxury vacation rental. This step will depend on how you’re going to use the vacation rental property.
If you’re an investor that’s using the property strictly for rentals, then look for popular vacation destinations that are well-traveled year round.
However, if you plan on staying at the location for certain weeks or months of the year, then pick an area that you enjoy vacationing in. Then, you can start looking for properties in that area.
Sort Out Your Financing Options
Next, it’s time to sort out your financing options. Typically, this will involve taking out another mortgage on a separate vacation property.
However, it’s important to note that these aren’t your only financing options. You should also consider taking advantage of the following loans:
- Conforming loan
- Portfolio loan
- Short-term loan
- Multi-family loan
Make sure to talk to a financial expert to decide which financing option is best for your investment needs.
Get An Appraisal
Before you close on the deal, you should always get an appraisal of the property. This is important for providing your lender with an estimate of the property’s value.
Most of the time, vacation properties are appraised using comparable sales. However, if it’s in a vacation area with a lot of other properties, the appraiser may use the net operating income method instead.
Decide How You’re Going to Manage It
Next, it’s time to decide how you’re going to manage the property. If you live close by, then you can always manage the property yourself. But, this becomes slightly more challenging if you live far away.
In these situations, you should consider hiring a property management company to deal with renters, maintenance, and upkeep.
List the Rental
Once you’ve acquired the house, then it’s time to find vacationers to rent it. The easiest way is to list your vacation rentals here or on sites like it.
However, depending on what type of management you decide on, this might not be necessary. Some management companies will handle all of the bookings for you.
Appreciate Learning About Luxury Vacation Rentals? Keep Exploring
We hope this article helped you learn more about buying luxury vacation rentals. Remember that these types of purchases are big investments.
So, you should always consult with an industry expert before you follow through on the purchase.
That way, you’re confident that you’re making the right decision. Want more articles related to real estate? If so, then keep exploring our website to find dozens of similar ones just like it.