Owning a vacation rental can be a very rewarding and profitable business. It can also be a difficult, frustrating and expensive experience if not to avoid some very simple traps. Some pitfalls to avoid may seem obvious, but worth repeating. Others may be things that you probably have not even considered.
I have five historic Key West vacations, and manage the market and more than 50 other people. I have been in the vacation rental business since 1994, when I became a property that had Key Largo, Florida on my first vacation home. From decades of experience, I suggest below 8 property traps of the most common basic and avoid having a vacation. In every year that I am in this business, I still see people who make the same mistakes again and again that could easily be avoided through foresight, better planning and career guidance.
Although it is nice to talk about the negative realities of owning vacation rentals, I hope you can learn from other mishaps and maximize the benefits of owning your vacation home. Think about it before you “cross the” in the property of a holiday home.
Do not buy the wrong house:
It seems obvious? Well, the adage “Hindsight is 20/20” is good to think ahead in this critical first step. I have seen many people “fall in love” with a house or cottage they encounter during your vacation and decide to make an ideal 2 home and perfect rental. Make sure to “hit the romance of your head” and carefully consider the opportunity of a well being perceived by potential customers actually and if you can afford. First, find out what are the size and configuration properties plus the demand in the area you want to buy. For example, how many rooms and bathrooms look for most tenants? Do customers want historic homes, condos, cottages, studios or do not care? Is it important to have a pool or a garden? Are you ready and able to do some renovation work?
Do not forget to make a business plan:
Make a basic business plan and determine if you can earn enough money through their rents to justify the purchase. Get help from a professional hiring and an accountant or financial advisor to create a preliminary plan. Learn how much you can expect to pay to use your vacation property and how much you can expect to earn income. Get actual occupancy or projected rates from a local rental agency established. Find out what the time of the year can hope to rent your home. Is there a short tourist season, or a year ago on the season? Some communities have a strong demand for private holiday homes and excellent rental rates. But others have an excess of unsold homes now offered as vacation properties, driving rental rates too low to cover the cost of owning a second home.