Vacation rental homes have become increasingly popular. It is important to recognize that just because it is a popular trend, it may or may not be the right investment for you and your family. There are many things to consider if you are potentially looking to invest in a vacation rental. As you begin to make your decision and begin your search, consider the following pieces of advice.
Best Advice For Buying A Vacation Rental
You have heard this many times, but one of the most important parts of your value in real estate is the location of your property. If you are considering using the property in question as a vacation rental then you want to know if it is in a desirable location for vacationers. You also want to consider that it is in a place you and your family want to vacation to as well. Any beach or mountain location will likely be highly desirable, but also seasonal. Keep all of this in mind.
Aside from location, the budget will be one of your biggest determining factors when it comes to buying a vacation rental. You do not want to purchase something that will stretch your budget beyond what you can afford. Buy below your budget so you can keep more in your pocket at the end of the day and consider planning for repairs.
Consider all the facets of your life and family when you determine if it’s a good investment. Is this a home you will use and take care of, or is it not the right time? The last thing you want to do is create a false idea of how good the investment could be instead of what it is. Be realistic with your choices.
Make sure you have a good understanding of the tax implications. You will want to work with a professional who can provide you with details on this topic. If you are planning to rent out the property, you will have to pay income taxes on the rental income you receive. Property taxes can be higher or lower depending on where your property is located too. Your agent and tax professional can provide you with the information you need to navigate this part of your decision.
Your ROI is your return on investment. You will want to determine this based on rental stats and the potential you could make depending on the demand in the area. You also need to determine your expenses and deduct this to determine what your potential investment profit could be.
Your homeowner’s insurance is an important factor and may look different for a secondary rental home. Be sure the policy you obtain covers all of your needs for a short-term vacation rental.
For more information on buying or selling a primary residence or vacation home, contact us. We would be happy to assist you with any of your buying, selling, or investing needs in Sunset Beach.