Looking at purchasing a vacation home but would also like to rent it out to cover expenses.
Consider these five points in deciding where and what you want to purchase. If you are purchasing a second home for your enjoyment and not for 100% investment purposes then this article will provide insight.
One: Find a property that you enjoy and you like. This is very important because purchasing a second home for vacation rental should serve two purposes. One your enjoyment and two providing added income to cover the ongoing expenses. If you are purchasing a second home strictly for investment purposes the criteria is different and will be addressed in a different blog.
Two: Once you have #1 figured out the next step is to decide do you want to purchase a property that has been remodeled and ready to go or are you willing to remodel if you purchase something that needs work? I know this seems obvious but we deal with this on a daily basis because buying a property that needs work will always take longer to remodel than you think, cost more than you think and be more stressful during the process than you think. This is a fact! So take into consideration when purchasing a property that a remodeled property will cost more and is ready to go into the rental pool immediately vs a property that will require a remodel, permits, contractors ( that always go over by 15-20%) and a delay in being submitted into the rental pool. Don’t misunderstand me I am not favoring one over the other I am simply bringing to the surface things that each buyer should consider these points based on their finances, time, availability and stress level.
Three: OK, so you have #1 and #2 figured out. You’re off to a great start! Now find a dependable agent, one who will listen to you, show you properties that fall in your budget and property specs. Find a property management company that can assist you in providing the following information for a potential property BEFORE you place an offer.
a. Annual gross revenue the property should generate
b. Pluses and minus of the property as a rental
c. Potential expenses
d. Options for management
Four: Decide if you want to manage your vacation rental yourself or if you want a professional management company to handle your property. Here are just a few things to think about when deciding between the two.
a. How payment will be collected or refunded?
b. How will property issues (plumbing, maintenance, repairs) be handled?
c. How will emergencies be handled?
d. Where will your property be advertised?
e. Rental contracts?
f. Accidental Property Damage. Who will pay for it?
g. Local town ordinances and compliance
Five: These days we all check out reviews before we purchase things or places we decide to dine. Reviews are very important to all demographics especially the millennial group. For this reason, it is important that if you choose to use a management company that you align yourself with one that has excellent reviews and lots of them on Yelp, Google and a strong Social Media presence. This trifecta will significantly affect the volume of rentals and return renters for your property.
At NomadnessRentals we offer vacation rental homeowners 4 different options ( 4%, 8% 20% and Long Term Rental). From self-management to full property management using state of the art NomdRez software. NomadnessRentals is fully integrated with Airbnb, HomeAway, VRBO and soon Booking.com for global and local exposure for the vacation rental property with the best Yelp, Google and social media presence. Don’t guess which property to buy be informed with NomadnessRentals complementary property evaluation including annual gross revenue potential and property pros and cons based on actual property comps.
Before you embark on the vacation rental purchase adventure be informed and avoid all the pitfalls that might set you back from a profitable and satisfying experience.
Have a question call NomadnessRentals at 888-472-5777 or email firstname.lastname@example.org