Thank you for hanging out with me! From day to day you never know what life will throw at you. And it will often be this way in my blog as well :) But lest RUN WILD and LIVE FREE in this amazing adventure together!
So you are intrigued by the idea of owning a vacation rental. So what next? Where do you start?
How should you decide what is the best option for you?
Experts say location, location location are the three most important parts of a successful real estate investment.
So choose a place that others like to travel! This could be where YOU love to travel but also could just be areas you see as popular places to travel. We chose our location as we fell in love with the area and it was obvious many others had as well.
Consider the year round returns on the area you are interested in. If you are a person who loves to go to Colorado to ski, that is fantastic, but is this area one that can bring you solid income year round? Or will your vacancy rate be high during the “off season”. These are all things to take into consideration when choosing a location. Vacancy rate shouldn’t be a total deterrent. It is just something to consider in the equation of the return on investment if you want your vacation home to pay for itself.
One thing we did when we were looking at our location is we had our realtor look to see if the owner reported if they had made income on the property previously renting it out and if so how much. We also went on sites such as VRBO and Air BNB and looked up the address of the location to see what others were on the market being rented and how often they were rented. Along with the price per night! This helped us to see that the area we were looking and the complex we were interested in had a solid rate of rentals through out the year and would more than likely be a great option to buy and have a nice rate of return.
Vacancy rate is something you want to consider when looking at your budget going in as well. So keep this in mind. What is a vacancy rate in Florida may not be a vacancy rate in Colorado as well. So doing the research on what others in the area are having is key! Looking at these others listings will also help you determine the wording, key features and important pictures that are drawing people in. It will also help you set your nightly rate when looking at budgets.
The biggest thing that will really help you out is finding that perfect realtor for you. Know what personality you want. Do not just commit to the first person you meet. If you are not comfortable with them or they make you feel like you are just a number MOVE ON! I can not stress this enough. We never signed an agreement with the team we worked with. But I can tell you what…..when we are ready for our next home there will be NO OTHER person I will use. We have become great friends outside of our real estate transaction and they are the only ones I will recommend to anyone in the area. A great realtor is so key as well because when working from a distance, they will be your know all in the area. And if they are not willing to be this person for you, again, move on!
So you really have to decide….is this a home you want to be spending your time in? Or is this just an investment that you really don’t care if you ever go visit? Deciding this will also make pin pointing what you want in a home much easier. And it will help you in understanding what others are also looking for. For example……we HAD to have a place that had the option to walk right outside the door and have a patio or some outdoor area to enjoy. So in our complex, the upper units were a no go for us as they didn’t have any way to go outside. And after talking to many other “northerners” this is something they agree they look for when renting a place to stay. But our realtor owns a unit in our complex as well. They are local to the area and did grab one with no walk out option. They viewed this purely as an investment and to grow their portfolio and are doing very well in doing so. So we both bought with the intention of investment. But we both bought with different ideas of what we needed and we both are doing very well in doing so. So what is right for you, may not be right for another. And that is ok!
So find that location that is right for you and go for it! Make your dream come true!