Whether you’re looking for a place to stay for your unexpected holiday breaks or just want to have someplace to settle down, you can never go wrong with investing in a vacation rental property. However, this investment is not just for the sake of having a second home. If managed properly, this can be a source of passive income.
Vacation rentals are a good kind of business venture. After all, people love exploring new places and going on a trip. Of course, part of their vacation is to find a temporary home. This is where short-term rentals fit in the picture.
So, if you want to buy vacation rental property for personal use, why not also explore the opportunity of using it for business?
How Lucrative Is the Vacation Rental Industry
The use of vacation rentals has been a customary tradition since the 1950s. Listings appeared in newspapers and attracted people who would like to escape their busy lives for a short holiday.
In 1985, the Vacation Rental Management Association (VRMA) was founded to boost the vacation rental industry. In the following years, the industry coped with the continuous evolution of technology which led to the development of different vacation rental sites, which helped owners advertise their properties easier and became a more convenient way for guests to find suitable places to stay in. In fact, Trip Advisor’s data shows that 86% of vacationers today mostly use the internet when looking for accommodation.
Although you’ll not get rich quickly when you buy vacation rental property, with hard work, renting it out can be a lucrative source of income. In 2019 alone, the global market earned USD87.09 billion and can even expand at a 3.4% compound annual growth rate (CAGR) from 2020 to 2027, according to Grand View Research. Another study shows that the average gross annual income that vacation rental owners are making is USD28,000.
But First, Location!
So, you’re now drawn to owning and managing such a property. But before buying that vacation rental property for sale, the most important factor to check is the location. The truth is—where your property is situated can make or break your whole venture.
Here are some location factors to consider when picking short-term rentals.
Local Laws and Regulations
Even though that area you’re eyeing is in the top 10 places to buy vacation rental property, most likely it still has some strict rules and regulations regarding short-term rentals. This set of laws exists to prevent any misunderstanding that might happen in a neighborhood. Before making that purchase, make sure that you’re aware of the local laws and regulations to avoid headaches in the future.
Seasonal Variations in the Environment
Vacation rentals will also experience peak and low seasons. There will be months when you will be fully booked, and there will be times when you have no guests for a certain period.
If you buy vacation rental property in a beachfront location, you can expect more bookings during summer from June to August. On the other hand, if you buy a mountain cabin (perhaps one that is near ski resorts), you can also expect to receive more guests during winter.
Economic Growth
The best places to buy vacation rental property in 2021 and beyond should have stable economic growth and prosperity. So, if you can, spend a few days in the area to inspect the situation of local businesses. Are they thriving?
You can also check if the area’s tourism is booming.
Proximity to Tourist Spots
People on a vacation would really want to explore their destination. That is why it’s a big factor to select a vacation rental that has easy access to popular local attractions. This can be one of the unique selling points of your property and can surely attract more bookings.
The best places to buy vacation rental property listed here will give you an idea of where to start looking.
Ready to Join the Vacation Rental Industry?
Alt-text: a person browsing vacation rental listings online
When you’ve already purchased that vacation rental property you desire, here are the next essential steps you need to do.
Make Safety a Priority
The safety of your guests should always be a top priority. Install CCTVs and smoke/carbon monoxide detectors, and have fire extinguishers and first-aid kits in place. Make sure your property is regularly checked for any leaks or loose electrical wiring to avoid any accidents from happening. Lastly, since the Covid-19 virus is still existing, make it a habit to frequently disinfect your property to prevent any possible contamination.
Furnish the Interiors
The goal is to make your vacation rental looks appealing to potential tenants. To do that, you need to decorate and furnish the property. Invest in cozy furniture and modern equipment. Don’t forget to add in plants, art pieces, colorful accents, and other accessories that can add to the overall beauty of your property.
Decide on Your Rate
The right rental rate will not only get you a good return on your investment but will also make returning guests. Make sure that your prices are competitive—not too high nor too low. Your rate should match the amenities and services you offer.
However, as you are just starting, you can set a lower price just so you can accumulate more reviews and build up a reputation.
Market Your Property
Effective vacation rental promotion and marketing is the answer to getting more guests and eventually earning more income. To make a name for your vacation rental, you can make your own website, create social media pages for it, or list it on various vacation rental marketing platforms. Make sure that your listing grabs the attention of your target market. Use catchy descriptions and quality images. Lastly, ensure that all the details of your vacation rental are accurate.
Conclusion
When you buy a second home for vacation purposes, you can make it more useful all year round by offering it as a short-term rental. Not only will you give travelers a nice yet affordable place to stay, but you will generate passive income as well.
For more information that you can use for business and daily life, check out our other articles!
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