Vacation homes can amount to so much more than just serving as one more way to indulge, and today’s innovative turnkey vacation rentals offer great return on investment and one of the best ways to make money… If you know where to look, buy for all the right reasons and have a stellar property manager to handle the day-in-day-out challenges of managing a vacation property.
“A good property manager is key”, wrote Bigger Pockets. “Chances are if a property manager is taking great care of the outside, then the inside is usually very nice as well”.
Here’s our list of four big reasons to consider investing in turnkey vacation rentals right now:
1. Extra Income
The best turnkey vacation rentals will at least pay for themselves and some will also provide excellent return on investment. In parts of Mexico’s Riviera Maya, for example, investors are getting returns of 8-14 percent on spacious luxury condos that offer “No Worries, No Hassles Ownership” and easy access to all the services and amenities you would expect to find at any luxury resort.
“Do your research and make sure that the area where you are buying [real estate] is a popular vacation spot and the income of the property can hold up to the monthly bills”, wrote Bigger Pockets.
2. Portfolio Diversification
By now, every investor has heard the buzzwords “portfolio diversification,” but what does it really mean? Simply put, a properly diversified portfolio will include a blend of today’s best investment vehicles, including alternative investments like real estate. Just be sure to take your time and do adequate research before buying and keep in mind that it’s typically best not to take out a mortgage. If you can’t afford to purchase the property outright, consider buying real estate with an IRA account instead.
“Owning a vacation home is a great way to diversify your portfolio, and if you buy right, you should be able to make money on the property”, wrote Bigger Pockets. “Most vacation homes do increase in value”.
3. Family Vacations
Okay, perhaps we’re overstating the obvious with this one, but let’s just be honest; owning a turnkey vacation rental makes it much easier to… You guessed it – go on vacation! This is true whether you’re a family of two or ten, but it also applies to singles who like to travel with friends and family. Buying property in a favorite destination definitely simplifies the “where are we going to go” conundrum – and remember – there’s no price tag you could ever put on feeling safe in familiar surroundings or making memories that will last a lifetime.
4. Retirement Planning
Finally, investing money in vacation homes can also serve as another way to plan for retirement, especially if you purchase property in a popular expat haven that is also a top vacation destination. Considering the price of real estate in the most sought-after retirement locales in the U.S. has been soaring in recent decades, the time has never been better to consider buying property for retirement abroad.
What types of investment properties are you interested in? Let us know in the comments!