Vacation Rentals by Owner: How to Get Started
The real estate market has taken a major hit in recent years, which makes now the best time for you to invest in vacation rentals by owner. Many people are landlords, but most of these rental properties are for full-time, year-round tenants. Vacation rentals by owner can be a lucrative, if not quite all-year-round investment. The reason for this is that many vacation rentals by owner can charge more than the average regular tenant is willing, or able, to pay.
There are a few things to consider before and when you get started in the vacation rentals by owner business.
Budgets for Vacation Rentals by Owner
By making the term plural, budgets should be considered an important entity, and not just one by itself. The first thing that you should do is create a budget for your own home and a separate one for your vacation rentals by owner home. Do not, I repeat, do not co-mingle your budget. Determine how much you need to budget for your own home, your own way of life, and then determine how much you will need for your vacation rental.
Never let these two budget cross over into one another, either. If you’re low on vacation rental funds one month, don’t take from your personal budget to cover it; treat the vacation rental as a business because that is precisely what it is.
You wouldn’t co-mingle your personal budget with your business budget, yet many people make this mistake when starting out in the vacation rentals by owner business.
Ensure a Cash Reserve for Your New Business
At the same token, you want to make sure that you have the available cash that you may need for your vacation home rentals. There are a thousand reasons to have this cash at your disposal and when you have it set aside, and separate from your personal assets and expenses, it will be much easier to manage this new business.
Home repairs, insurance, unexpected cancellations, and many other factors could be reasons to need to lean on this money. Just as you wouldn’t want to tap into your personal savings for your vacation rentals by owner business, don’t be tempted to tap into this cash reserve for your personal needs.
Establish a Target Region
Perhaps you are fond of the Southern California coastline and have found the perfect vacation rental home. Or maybe you’re an avid skier and know just how important a home near the best ski resorts can be and what people are willing to pay for a rental in these locations.
Figure out where you would like to have your vacation rental, what the market value is for properties currently, and what going rates for rent are. Also, in this economy, it’s vital that you know the vacancy rate on comparable vacation homes in the region. If you invest in a vacation rental only to find that you can’t rent out more then one-third of the season, you will be relying on your personal reserves heavily and too early.
Vacation rentals by owner businesses can be one of the best investments, and they can also offer you the ideal getaway at cost next year.