Make Your Vacation Rental Pay for Itself
Getting a vacation home for free might seem too good to be true, but with careful planning it can happen. If you do everything by the book, you can enjoy having your very own vacation retreat.
Do the Math
In order to make your vacation property pay for itself you need to rent it out for a good few weeks. First things first. Before you purchase the house, you need to calculate all of its costs on an annual basis – carrying cost, mortgage, taxes, utilities, insurance, and any other costs. Then you need to figure out your rent rates and how many weeks it will take you to cover the annual cost. Plan for a worst-case scenario and make sure your rental income exceeds the costs. A natural disaster or a problem with the house can cause you to lose a few weeks’ income, so you need to be prepared for that.
When it comes to any property and especially vacation rentals the most important thing is location, location, location. You need to pick a house which is in a resort town popular with tourists. However, don’t pick a house out of the country. No matter how popular the place, you will not be able to maintain a steady flow of tourists. The house should ideally be within a couple hours’ drive. If you like to get some pointers on the house that would attract the most renters scout a few of the most popular homes in the area and see what works for them. Is it the layout and interior of the home or is it the proximity to beach or mountain slope?
Buy and Renovate
Investing in real estate comes at a risk and changing market prices can have an effect on your return of investment. In order to minimize risk, look for a property which has potential but needs to be renovated. This way the asking price will be lower and you will have some money left for renovations. However, be extra careful with fixer-uppers since renovation costs can get out of control. Make sure that the renovation needed is not structural. Get ideas on how to make your vacation home for free the most attractive and functional for your guests.