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7 Key Vacation Rental Factors Before You Buy
March 12, 2018
Orlando’s vacation rental market is exploding. Literally! And there is no better time for you to invest in vacation rental property than now! Purchase a vacation home and earn from renting it out to vacationers and tourists.
We understand that the process of moving from a potential to an actual vacation rental homeowner in Orlando can be challenging. There is so much to consider before putting down your fortune towards the purchase of a vacation rental home.
But don’t fret! We are a premier vacation rental management in Orlando. And we are here to help and give you a smooth and seamless transition to vacation home ownership.
Here are our 7 Must-Consider factors of a vacation rental property before buying. This checklist should help you have an ace experience when buying a vacation rental home.
When it comes to vacation rental homes, the location of the property is perhaps the most important factor to consider. For it to be a vacation rental home, it has to be in a vacation area. Yes?
So, what are some of the vacation destinations you are considering? What are the exact tourist attraction sites in these vacation destinations? How far or close are the homes available for purchase from these sites?
Some of the top considerations to make when determining where to buy a vacation home include:
• Is it easy to access the vacation home?
• What are the available means of transport to and from the vacation home to the nearest attraction sites?
• How long does the trip take?
• Are there other points of interest in close proximity to the vacation home?
Take Orlando, for instance, the main attraction is Disneyworld. So, to invest in a rental home property, you would want to consider its location in relation to Disneyworld. The location should be appealing and proximal!
If you are not familiar with Orlando, Florida, consider hiring a reputable Orlando property management firm to show you around and also advice on suitability. A search with various online vacation home listing companies can also be an amazing starting point.
2. Target Market
Understanding your target market from the start will help you manage your finances, effectively market your vacation home and also give you an insight on the pricing model to use. Various vacation destinations attract different visitors and vacationers.
Consider the type of vacationers who would stay at your vacation home. Are you targeting:
• Solo travelers? • Businessmen? • Families – families with pets? • Millennials on spring break vacation? • Couples on honeymoon? • Retired travelers?
If you’re able to identify your niche market, then getting a vacation home that would meet their needs becomes a bliss.
If you’ve identified your target market, set out some criteria to guide you on the type of vacation rental home to invest in. Orlando attracts vacationers through Disneyworld. Disneyworld is a family destination. Right? Therefore, large houses with multiple bedrooms and bathrooms may be the best fit for rental vacation homes.
3. Condition of Home
Fixer-upper? Or a new house? This decision is entirely up to you and your budget. You may get a fixer-upper house for purchase at a prime vacation spot going for a friendly price. Before making the deal, do the math of the finances and time needed to renovate it until rental standards. If they fall on the positive side of your budget then go ahead. If not, a budget-friendly new house at the same vacation location may be a better option.
When reviewing the condition of the potential vacation rental home, look into:
• insurance, • taxes, • operational expenses • as well as management fees.
This information is important and can be explained to you perfectly by a seasoned Orlando property management realtor. Extra information can also be obtained from vacation rental management companies.
4. Reliable Guest Access
When it comes to guests accessing your rental home, the main question is in the management of the vacation home. Will you manage the vacation rental home yourself, hire competent housekeepers or layover the management responsibility to a vacation rental management company? Every option has its pros and cons.
Therefore, do a candid research before making a decision. However, irrespective of which option you decide to take up, guests should be able to access the vacation rental home any time around the clock, or as agreed upon. A 24-hour check-in provision would give your vacation home an added competitive advantage.
5. Vacation Amenities
Vacation amenities can be split into two main categories: what is already available in the house and what you can add to the house after purchase. Some of the most popular amenities that guests look out for in a vacation home include:
• Hot Tubs • Cable/satellite TVs • Air Conditioning • King size Beds • Recreation / Game rooms
Depending on your target market and your budget you can research on how to appropriately furnish your rental home to attract clients. You can as well look into the vacation amenities being provided by other vacation rental homes in your location and make sure you are on par with the competition.
Unless you’re flush with cash, you’ll need to confirm if you have access to a vacation home financing. Depending on the condition, location and market value of your property, most of the lenders would require a 20-30 percent down payment. This will also depend on your credit history and financial status.
Some of the things to consider before sealing the deal include:
• How much can I afford? Don’t buy a property that is a stretch to afford. • Is it the right time to buy a vacation home? • Can I liquidate the property easily? • Will I get any Tax relief after buying? • Can I repay the mortgage in case of conservatively low bookings?
If everything checks out, I imagine you’re in the process of picking out a home that you’re super-convinced will be ideal for short-term vacation rentals.
Well, have you considered how you’re going to attract renters?
Primarily, your main reason for acquiring this a vacation home rental property could be to invest. However, many rental property buyers overlook the marketing end of the business. Before you sign the mortgage papers, explore how you are going to get vacationers to your property.
You can either choose to:
• Enlist your vacation home rentals with online rental listing platforms like Airbnb, HomeAway or VRBO. • Use a full-service Orlando property management firm or a reputable vacation rental management company who can then market and manage your property. • If you are a DIYer, you can choose to go solo - You can decide to manage your property singlehandedly and market it through Facebook, Google Ads, or Craigslist?
Remember, there is no right or wrong way to rent your vacation home. Ultimately, the goal is to maximize profits, give your renters an amazing in-stay experience and maintain optimum bookings. Your choice to hire an Orlando vacation property management company or to rent by owner is solely determined by your desired level of involvement.
Buying a vacation home is a massive and daunting decision. As with other diversification investments, due diligence is key. Analyze nearby vacation homes in Orlando and see what’s renting and for how much. Be candid when researching on how often people are renting and the average occupancy rates around that area.
Remember, talking to local agents and vacation rental companies will get you the finer details about an area.
As a vacation rental management company, we have the knowledge and experience in this market to perfectly guide you. From potential to actual vacation rental homeowner. And most especially if you are looking into investing in a vacation rental home in Orlando.