What is a Vacation Rental?
Vacation rentals are a type of short-term rental. Maybe you and your friends or family have traveled to a beach and stayed in a beach house for a few days. That’s a prime example of a vacation rental.
Did you know that vacation rentals are a pretty good way for you to earn passive income? Passive income requires little to no work, and it’s a great addition to your regular income. Now, if you have a property that isn’t selling in the real estate market, you may have the option to turn it into a short-term rental, charging a fee per night. But what if you don’t have a spare house? Luckily, you can invest in a vacation rental property.
6 Facts About Investing in Vacation Rentals
In addition to earning a passive income, there are several other reasons to consider investing in a vacation rental— some you may not have even thought of!
1. Your rental property doesn’t have to be in the same city as your primary residence.
The good thing about owning a vacation rental property is flexibility. If there’s a property available in a popular tourist area, you’re bound to get more rentals through rental services, like Airbnb. Whether you live in a popular tourist town or not, you can choose where to purchase a vacation rental.
2. You can list it as a rental at any time.
Maybe your work requires you to travel, and you don’t want to be bothered with hotels. If you end up working in or near the location of your rental, you can opt not to rent it out, and live in it yourself. Note that in some places, there’s a limit on how long you can stay in your own rental property.
3. The property value can still increase.
This is especially beneficial if you’re unable to sell your property for whatever the case may be. It may not be the right time to sell, but instead of your property just sitting vacant, you can rent it out in the meantime.
4. It’s actually pretty easy to get started.
Of course, if you already own a vacant property, you can easily fix it up and list it on Airbnb as an available rental. But what if you don’t already own a rental property? Here’s a guide to buying an Airbnb investment property.
5. You can hire a property manager to ease the workload.
If you live in the same area as your vacation rental, then it will be easier to deal with the nuances of managing a rental property. However, it can become quite challenging when you live in another town or state. Either way, a property manager to help manage the details of your vacation rental will save you more time.
6. It pays for itself.
If you don’t already have an extra home and you’re thinking about buying one, don’t get nervous about spending your money. When you market correctly and constantly get good reviews on your rental, you’re likely to see a demand to rent your property. You can also charge whatever you deem as fair, based on the type of home and location.
There are several other advantages, such as tax benefits, but there are also few factors of owning a vacation rental property that you should be aware of.
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Two key things you want to also remember are location and season. Just because you purchase a rental in an area you love, that doesn’t mean that area will attract a lot of tourists; you really have to put yourself in the shoes of the tourist.
Also, some places are more popular in certain seasons than others. Really take the time out to research the type of home you’re considering investing in and the location to determine if it will be a worthy investment that will allow you to see a great return on your investment.