5 Steps to Choose the Right Property For Your Vacation Rental
Find The Best Property For Your Rental
Breaking into the vacation rental industry can feel almost impossible, even if you have the capital and the business sense to work through every step on your own. But it was once said, “Every journey begins with a single step,” and the same is true with running a short-term rental business–before you can rake in the revenue, you have to purchase a property that will help launch your business to success.
That’s why today, we’re breaking down 5 steps that will help you choose the perfect property for your vacation rental. Turning your business into a success is not an overnight endeavor, but when you choose the right property, you’ll already have a great head start.
Step 1: Conduct Market Analysis and Decide Where to Buy
When it comes to purchasing a property to turn into a short-term rental, location should always be your foremost concern. Even if you already have a location (whether that’s a city or a neighborhood) in mind for your vacation rental, it’s a good idea to conduct a bit of market research and analysis before ultimately deciding where to buy. But if you don’t already have a spot in mind, there are plenty of ways to discover emerging markets that would be right for your business, such as by doing a quick Google search of solid vacation rental markets in your state or researching destinations you’ve known to be popular with visitors in the past.
All in all, location is one of the most important factors in determining your future occupancy rate, and choosing the right one for your vacation rental business will make a big difference in the end.
Step 2: Research Neighborhoods to Choose the Best One For Your Vacation Rental
After determining where you want to purchase your vacation rental property, it’s time to take a closer look at the neighborhoods in the area. In choosing your ideal neighborhood, it’s important to consider factors such as proximity to local tourist attractions, local laws and regulations regarding short-term rentals, and the type of homes typically available in that area.
There are also a few tools available that can help you to narrow down your search, such as Mashvisor’s Market Finder tool. This site can also provide you with insight and information about the best potential neighborhoods using the Heat Map feature, allowing you to figure out how to invest your money in the wisest way possible.
#3: Can Lead to a Smoother Cleaning and Turnover
Once you have a neighborhood in mind, it’s a good idea to go over all of your potential expenses before you jump into finding a realtor. There are a ton of costs to consider when you’re purchasing a new piece of property, even if we set aside the mortgage, closing costs, and furniture budget.
Here are just a few expenses that you should take into account while making your budget:
Local property taxes and homeowners insurance
Monthly utilities
Fees from property managers (if you’re not self managing)
Cleaning and maintenance fees
Repairs and renovations
Booking platform fees
Once you’ve determined your home-buying budget and your business expenses, it’s a good time to start researching lenders as well (if you’re not purchasing the property with cash) in order to get pre-approved for a loan.
Step 4: Get in Touch With a Realtor
Finally, once you have everything else mapped out, it’s time to get in touch with a realtor and find your dream vacation rental property. While it’s not 100% necessary to hire a real estate agent to help you with your property search and you can always research properties yourself, getting an in with someone in the local area can help you to find hidden gems that you may have never seen otherwise.
Be on the lookout for realtors who specialize in selling vacation rental properties, as these professionals will have more than enough local expertise and knowledge to guide you in the right direction when it comes time for you to buy. They also should be able to educate you on local laws and regulations for vacation rentals in the area you’re interested in.
Step 5: Purchase Your Dream Vacation Rental Property
The last step to this whole process is quite simple: once you’ve found your dream vacation rental property, it’s time to put in a bid and try to negotiate the right price. This is where getting pre-approved for a loan will come in handy, as it’ll give you an edge over other buyers. Once the sellers have accepted your offer, all that’s left to do is close on it, fill the home with furniture and other rental supplies, set it up on booking platforms, and get started with your vacation rental business.
Once You Have the Right Rental Property, Choose a Property Manager To Launch You To Success
The process of finding the perfect short-term rental process is not an easy or uncomplicated one, but at the end of it, you’re looking at a ton of potential income and return on your investment if you do it right.
Not sure if self-managing your rental will be the right move for you? Think about Going Local and allowing LocalVR’s experts to take care of every aspect of property management for you. To learn more, visit our homepage.