With the stock market’s ongoing potential for volatility, vacation home rentals offer a secure option for investors who are looking to collect excellent return on investment and enjoy a fantastic home away from home where it’s easy to get away from it all in a favorite destination. The key to this type of real estate investing is to buy smart in a safe place that is growing in demand and offers plenty of things to do for tourists, so it’s essential to look beyond what is available in the U.S., Canada or Europe in order to generate serious investment income.Here are five easy steps to help you find the best turnkey vacation home rentals that will provide the highest return on investment and the most enjoyment for visitors all year round:
Step 1: Select a Region
We’ve said it before and we’ll say it again: When it comes to the best vacation homes that double as serious investment properties, it’s all about Location, Location, Location! When selecting an ideal place to invest in a turnkey rental property, don’t confine your search to places in your country of origin. Instead, think about the best places for tourism worldwide
Once you’ve narrowed down your search to a few great possibilities, it’s time to buckle down and really do some serious research about the areas you are considering. This starts with visiting the region, even if you’ve been there before on vacation, so you can get a real feel for the area and what has changed, where the hottest properties are, where the best value is and locate an experienced real estate investment advisor to help you tour the best potential investment properties for your situation.
Step 3: Calculate Rental Income
When you’ve narrowed down the options to one or two excellent vacation homes, it’s time to get down to business and start crunching the numbers. Ideally, you’ll settle on a turnkey rental property that is professionally managed and won’t require you to do anything but sit back and enjoy a handsome return on investment; just be sure you have a clear idea of exactly how the rental process will work and how guest satisfaction is ensured.
Step 4: Financing
Another major component to consider when buying real estate for investment purposes is how you plan to pay for the property. Generally speaking, it’s not a good idea to take out a mortgage, since that monthly payment will seriously diminish your return on investment. If you don’t have the cash on hand in your bank account, don’t despair! Although your typical investment advisor probably won’t tell you this, buying real estate with an IRA account is easy, as long as you follow the rules. This permits you to collect tax free return on investment and still enjoy a personal getaway whenever you can find the time… And what could be better than that?
Step 5: Services and Amenities
Last but not least, it’s essential that vacation home rentals offer easy access to a great selection of services and amenities. If the property is located close to the beach, for example, guests should have easy access to the water and all the activities available there. Same goes for historically significant destinations, mountains, the desert, etc. Regardless of location, however, keep in mind that guests also want to relax and feel pampered while on vacation, so in order to compete with the big-box hotels and resorts in the area, the property will have to make it easy to enjoy great culinary destinations, spas, yoga, shopping, etc. in the region, as well as a swimming pool and activities for the kids if it’s a family-friendly vacation home.
Where have you thought about buying vacation homes as investment properties and why? Tell us in the comments below!