{"id":2340,"date":"2020-05-19T07:54:54","date_gmt":"2020-05-19T07:54:54","guid":{"rendered":"https:\/\/blog.sfloridaluxuryhomes.com\/?p=2340"},"modified":"2020-05-19T07:56:44","modified_gmt":"2020-05-19T07:56:44","slug":"things-you-should-know-before-buying-a-vacation-rental","status":"publish","type":"post","link":"https:\/\/blog.sfloridaluxuryhomes.com\/?p=2340","title":{"rendered":"Buying a Vacation Rental, Read this First!"},"content":{"rendered":"
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Things You Should Know Before Buying a Vacation Rental<\/h2>\n

While the vacation rental industry is no longer the new kid on the block, it continues to grow<\/a> at a steady pace with vacation rentals expected to surpass hotels in 2020. It\u2019s not too late to start earning money in the vacation rental marketplace, but before buying a vacation rental property, there are a few things you need to know about finding and buying short-term rentals.<\/p>\n

Why do you want to buy a vacation rental?<\/h4>\n

There are two main reasons people buy vacation rentals:<\/p>\n

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  1. To generate profit.<\/li>\n
  2. To subsidize a vacation home.<\/li>\n<\/ol>\n

    Your reason for buying a vacation rental has a big impact on your approach. While investment buyers are looking for the property that offers the most for their money, second-home owners need to balance price and rentability with their own list of wants.<\/p>\n

    Buying for investment<\/h3>\n

    Investment buyers should carefully assess an area\u2019s affordability before purchasing a vacation property. However, when it comes to real estate investing, affordability is relative<\/p>\n

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    While popular travel destinations like Fort Lauderdale have high home prices (see graph) \u2014 the median Home Value & Sales Price in Fort Lauderdale \u2014 they also command higher rents. According to data<\/a> from Evolve, Fort Lauderdale vacation rentals average a daily rate of $92 in the high season, with larger rentals coming in as high as $531 nightly. Investors should use neighborhood-level data to calculate a property\u2019s cash flow<\/a> potential before buying.<\/p>\n

    BUYING FOR PLEASURE (AND PROFIT)<\/p>\n

    Buyers in search of a vacation home have a different set of priorities. Second-home buyers need<\/p>\n

    properties that they can comfortably afford with or without rental income. Staying within budget is especially important for these buyers because personal use during the high season limits the property\u2019s earning potential. Nonetheless, it\u2019s important for second-home buyers to consider a property\u2019s appeal if renting is part of their plan. While a quiet residential neighborhood<\/a> may be a lovely place to retreat, it may not attract the rental traffic you\u2019re after.<\/p>\n

    Should you buy a fixer-upper?<\/h4>\n

    Buying properties that need work is a smart strategy for investment buyers who have the capital and flexibility to renovate a property before listing on vacation rental marketplaces. As long as a property is structurally sound and doesn\u2019t require cost-prohibitive repairs, it only takes a few cosmetic fixes<\/a> to convert a fixer-upper into a desirable vacation rental.<\/p>\n

    Second-home buyers, on the other hand, tend to live too far away to oversee renovations. And while DIY might sound appealing to budget-conscious buyers, no one wants to spend their vacation remodeling a kitchen. In this case, it\u2019s most prudent to buy a turnkey property.<\/p>\n

    What makes a great vacation rental?<\/h4>\n

    Besides a top-notch location<\/a>, what should buyers look for in a vacation rental? These are signs that a property would make a good vacation rental:<\/p>\n