Vacation Rental Income Could Become Your Nest Egg
This guest article is from Christopher Haymon of adultingdigest.com. This is based on one of my personal favorite topics: VACATION! For anyone interested in visiting more about how to obtain a vacation rental for a nest egg, reach out to Rochelle who holds a Minnesota real estate license with eXp Realty. rochelle.markov@exprealty.com
Back in the day, taking a vacation meant staying in hotels and inns along the way, hoping for decent service and a comfortable bed. Travel accommodations now include a new option, and it is changing the way people experience their destinations. Vacation rentals offer people a different vantage of an area than a hotel, as well as providing more privacy and an entirely unique experience.
With this new way to stay, there are opportunities for investment and income for entrepreneurs. Reel Property Solutions, LLC has an array of beautiful property listings that would surely draw in an endless supply of vacation rental business. As you consider ways to get started with vacation property rental, think about investing in homes that are likely to attract renters.
Selecting Your Ideal Vacation Rental
There are so many properties to consider when you are exploring a vacation rental venture, but certain homes will bring in more renters than others, depending on location. Consider starting your property search near a destination that draws in a lot of travelers, like national parks or popular landmarks. If you are on the outskirts of a city, this may draw in people who are in the area for business or visiting loved ones.
Another type of location to consider is a property that is near outdoor adventure opportunities. Many properties offer a built-in attraction for outdoor adventurers looking to hit the slopes, hike, or just enjoy the fresh mountain air. Your ideal rental property needs to offer curbside appeal, amenities (such as access to a reliable internet and cable provider), and nearby attractions for renters to enjoy. If you are new to the vacation rental business, it may help to consider whether to purchase a home that needs a few repairs. In some cases, a few repairs can save thousands on the sale price and increase your profit margin significantly.
How Much Fixing is Too Much?
If you opt to purchase a home that needs a little work prior to rental, consider hiring a contractor to assess and estimate costs prior to jumping in. Some repairs will be simple and cheap enough to complete without busting your budget, while others will take a lot of time and money and will delay the process. Weigh the pros and cons of a property to determine how much time and money seems reasonable for renovations.
It is best to have a budget plan in mind prior to shopping so that you have guidelines to follow.
As you formulate your costs for a prospective property, factor in materials and contractor costs if you elect to purchase a home that requires repairs. Also, keep in mind cleaning and upkeep expenses, and whether you will hire out for these services or have time to tend to these tasks on your own. Funding your purchase is another important factor as you consider properties.
Financial Considerations for Rental Purchase
Securing a loan for a rental property can mean a large up-front expense. Lenders sometimes require a minimum of 20 percent of the total cost prior to offering a loan. Entrepreneurs who do not have this sort of startup capital may need to consider alternative methods, such as obtaining a home equity loan or second mortgage on an existing property. While this may seem like a risky idea, it could be a temporary solution that can be paid off quickly when your vacation rental property begins to earn income.
There are costs and benefits to varying funding options, and it largely depends on your risk tolerance and the amount of outgoing funds it will take to prepare your new property for rental. Consider talking to a financial advisor to make a choice that fits your lifestyle and financial goals. Vacation rentals open a new avenue for income if you plan carefully, make a purchase in a location that draws plenty of visitors, and secure funding that is manageable.
For more information about how Reel Property Solutions, LLC- brokered by eXp Realty- can benefit you to obtain a vacation rental property, contact:
info@reelpropertysolutionsllc.com or 507-218-8788
rochelle.markov@exprealty.com or 507-358-0638
Feature Image credit: Pixabay.com
