Investing in real estate has the potential to bring you a source of secondary, passive income, but it’s also a huge risk at the same time. The real estate market fluctuates all the time, so it may never seem like a good time to invest in properties.
While this is true to an extent, there are things that you can do to ensure that your investment is successful. For one, you can invest in vacation rentals as opposed to other types of residential properties or commercial properties.
Here are some tips on how to make sure that you’ll see a return on your investment in a vacation rental.
1. Pick a Prime Location for Your Property
Location is the most important factor to consider when choosing a property to invest in, and this couldn’t be more true for vacation rentals. Because vacation rentals are considered short-term rentals (meaning that they’re rented by one tenant for no more than six months at a time), you have to work harder to market your property to earn a consistent income.
You also have a limited number of locations to choose from, since not all areas allow short-term rentals. The key to choosing the perfect location is to look at cities that are popular tourist destinations and allow short-term rentals.
Some of the most sought-after vacation rentals tend to have not just the basic amenities (i.e., electricity, running water, heating/air/ventilation, etc.), but they also have a lot of the amenities that people have in their own homes. This includes things like Wi-Fi, a smart TV, game consoles, a coffee maker, a microwave, etc.
To make sure that your vacation rental stands out, you may want to look for properties that have luxury amenities that may not be found in every home.
These luxuries include things like a pool/jacuzzi, a fireplace, a balcony, etc. If the property you purchase doesn’t have these luxuries, you can consider having some luxury amenities added on as a remodel-as long as it increases the property’s value, rather than decreasing it.
3. Listing Details
Another important factor in ensuring that people will want to rent your property is your listing description. Listing sites such as Vrbo allow you to post a picture of your property along with a description. The picture(s) should include a front view of the property, as well as some pictures of the inside, and you’ll want to make sure the pictures are taken in natural light for the best quality.
The description of your property should be honest but also try to highlight the best features of your property. The goal is to get people looking for vacation rentals to choose your property over another.
4. Don’t Forget Your Responsibilities!
Once you’ve gotten your first guest on your vacation rental, make sure that you’re a courteous, respectful, and trustworthy landlord. Word will get around quickly if you’re not a good person to rent from, making it harder for you to secure more tenants in the future. On the other hand, if you constantly receive good reviews, then more people will be willing to rent your property.
Also, remember that part of being a good landlord also means that you’re cleaning the property between tenants and ensuring that all of the amenities are working properly before the next tenant comes in. Tenants won’t be too happy to know that something isn’t working when it was advertised on the listing.
If you keep these tips in mind when managing your vacation rental property, you’ll be more likely to generate steady income from it. Also, many locations allow you to stay in your vacation rental a few weeks out of the year, so you can enjoy the property too. There are many good reasons to invest in a vacation rental, just make sure that you’re ready to take that step before you do.