Vacation Rental Property 101: What to Look For & How to Maximize Your Investment
What if you could pay for an investment property’s monthly mortgage payment in a single weekend?
It’s quite possible, thanks to the popularity of vacation rental platforms like Airbnb and VRBO. In fact, Airbnb hosts alone made $22 billion from their vacation rentals in 2022.
In this article, we'll explore what makes a great vacation rental property, what to look for in a property, the benefits of vacation rentals, and how to maximize your investment.
Location, Location, Location
One of the most critical factors in the success of a vacation rental property is its location. Choose a destination with high demand for short-term rentals, preferably in a tourist hotspot or a city with a constant influx of visitors. Proximity to popular attractions, beaches, ski resorts, or business districts can significantly impact the rental property's occupancy rate and rental income.
Property Features and Type
When selecting a vacation rental property, consider its features and amenities. Travelers often seek comfort and convenience, so look for properties with appealing characteristics such as a well-equipped kitchen, ample sleeping space, Wi-Fi, parking, and outdoor areas like patios or balconies. The property type also matters; condos, townhomes, and single-family homes are popular choices for vacation rentals due to their privacy and accessibility.
Utilize Airbnb and VRBO
To maximize the potential of your vacation rental property, list it on popular platforms like Airbnb and VRBO. These platforms have a massive user base, making it easier to attract potential guests. Create an attractive listing with high-quality photos, accurate property descriptions, and competitive pricing to stand out from the competition. 5-star reviews on these platforms will have an enormous impact on your success. Be sure to research how to achieve these high ratings.
Potential Income from Renters Throughout the Year
One of the main reasons investors are drawn to vacation rental properties is the potential for high rental income. Short-term rentals often generate more revenue compared to long-term leasing, especially during peak seasons. Research the average rental rates in your chosen area and calculate the potential income to ensure it aligns with your investment goals.
Look for properties that have multiple reasons to visit the area throughout the year, or for at least for 6 months out of the year. Avoid properties in areas that rely on a one-day or one-week festival, followed by minimal visitor demand for the rest of the year.
Property Management
While investing in vacation rental properties can be highly rewarding, managing them can be time-consuming. Many investors prefer to hire professional property management services to handle guest inquiries, check-ins, cleanings, and maintenance. A good property management company can help you achieve higher guest satisfaction and maintain the property's condition, leading to better reviews and more bookings.
The First Step: Secure Financing
Financing your vacation rental property is a crucial aspect of your investment journey. While traditional lenders might be hesitant to offer loans for short-term vacation rentals due to their unique nature, Temple View Capital offers financing for short-term rentals for vacation properties nationwide.
To find out more about loan options for condos, townhomes, and 1-4 unit single-family homes, catering specifically to vacation rental property investors, reach out to us today.
Soon enough, you could be the owner of vacation rental properties that entertain guests from all over the world. Meanwhile, you can be enjoying your own vacation with the profits from those properties!