The most important thing you need to know about buying a vacation rental is where you’re going to buy the rental. Experts recommend spending a large amount of time at the location before purchasing the rental so you can get used to the food and culture of the area. Most times, you want to stay within a two hour radius of your home. Most people don’t travel further than two hours from their homes or vacation rental/hotel so visiting restaurants and entertainment further than that won’t be of much help. Become familiar with the food and night life in the immediate area of the rental you’re interested in purchasing. This way, after you purchase, then prepare to rent, you can inform your guests on what is near the property and where they can go to eat and have fun.
Make sure the property you’re interested in has all the necessary amenities that not only you are interested in but that potential renters will be interested in. Most renters want the property they stay in to be just like home. They want a full kitchen, fire places, pools, and hot tubs. Another attraction desired by most renters, and something that will increase the potential income for you, is the view. If your potential rental property has views of mountains, the beach, or the ocean, renters will be willing to pay more to stay in your home. It is in this stage you’ll want to make sure the property you’ve chosen is allowed to be turned into a rental property. Also make sure you don’t have to pay any money to the homeowners’ association.
There are a large number of costs associated with purchasing a vacation rental. Most times, when you purchase a second home as an investment property, you’ll end up with a higher mortgage rate. You may end up needing to pay a down payment of up to 25%. You will need to hire someone to maintain the property, especially if you don’t live in the country. If you have a pool and/or hot tub, they will both need cleaning. You will need someone to do lawn maintenance and landscaping. Be sure to keep someone on retainer for handy man emergencies. There’s also the costs you’ll have to pay out for someone to advertise and manage your property financially.
The last thing you want to do before purchasing a rental house is think about it. Don’t jump on the first property you see that you think you might want to purchase. Take some time, look at all your options. Write out a budget, what you think it might potentially cost for you to buy and maintain a rental house. If this is the place you plan to retire, make sure this house is some place you’ll be able to live in when the time comes. Make sure there aren’t a bunch of stairs in the house if you don’t think you’ll be able to climb them once you’re older.
Make sure you take all aspects into consideration when you think about purchasing a rental house. Don’t jump into something you can’t afford or you’ll regret.