By: Brittany Fisher of financiallywell.info
Renting out a vacation property can be a lucrative business for anyone. For example, Turnkey notes that some people can make more than $33,000 a year in revenue. You shouldn’t expect to get rich overnight, but there is definitely a market for vacation rentals. You just need to know how to tap into it.
If you’re new to real estate, there will be a learning curve. As a new real estate investor, you will need to know how to find the right property and what responsibilities you will have. If you think vacation rentals might be in your future, here are some tips to get started, courtesy of Intrinsic Real Estate Group.
Find the right rental
The first step to becoming a successful renter is finding the perfect home to rent. If you have an area in mind already, research home prices to determine what you can afford. Look for a property that is in a good neighborhood and is close to several amenities like restaurants, pools,
parks, etc. You should look for a home that is clean and ready to go. Before purchasing, make sure there aren’t any unaccounted for issues that you’ll need to fix later, like a leaking ceiling or broken pipe. Your real estate agent will be happy to point you in the direction of a home inspector and answer any questions you might have about choosing the right property for your purposes.
Calculate expenses and taxes
Before purchasing an investment property, take a moment to make sure you can afford the additional expenses. As the property owner, Young House Love notes that you will need to pay for any utilities used such as water, electricity, and trash pick-up. Anyone going on vacation will also expect high-speed internet and streaming services. Depending on the property you purchase, you might even need to pay HOA fees.
You’ll want to keep the property sparkling clean so your renters can enjoy their stay. You should factor in the cost of hiring a professional cleaning company to clean between guests every time. Something unique that comes with renting out a vacation home is providing consumables such as toilet paper, trash bags, laundry detergent, dish soap, shampoo, etc. You’ll have to restock these when they run low. If anything breaks, you will be responsible for paying for repairs, and this can add up.
Depending on how often your vacation home is rented out, you will need to pay taxes, especially if you end up generating a significant amount of rental income. If this happens, consider forming an LLC to take advantage of tax breaks and so you have asset protection in the event of a dispute.
Determine whether you should hire a property manager
So obviously, there are a lot of responsibilities that come with renting out a vacation home. You’ll need to list your home and market your rental, interact with potential renters, manage bookings, ensure the home is clean, deal with any repairs, keep up with taxes, and more. If you have a lot of spare time that you’re willing to put into your vacation rental, then you can save money by managing it yourself.
However, if you’re pinched for time, or you think the responsibilities might be a little too overwhelming, consider hiring a property manager who has the expertise to handle everything efficiently. To find the best property manager, you should get referrals and ask questions about their experience. Ask about how they advertise and what properties they specialize in to make sure they are the right fit for you. Alternatively, you could work with a vacation rental management agency that can take care of everything, and many even offer 24/7 customer support for guests and property owners.
Renting out a vacation home can put a lot of money in your pocket, but you should do your research first. Your real estate agent will help make the house-hunting process much easier, so be sure to connect with an agent who’s fully versed in your chosen community. Also, make sure you can afford a home and the expenses associated with renting out a property. Put in the effort, and you’ll soon be a successful investor.
Intrinsic Real Estate Group can help you find the best vacation rental. We have a spectacular team of specialists who will prioritize your needs. You can contact us at (713) 364 - 6694 or schedule a time to call.