Turnkey vacation home rentals are becoming increasingly popular as an alternative investment vehicle for people who are sick and tired of the stagnant returns offered by the stock market and other traditional investments. If you’re interested in turnkey vacation rentals as an alternative investment, there are certain actionable items to consider before buying.
Investing in Vacation Rental Properties for Beginners
It’s essential for investors to weigh the pros and cons, understand the different types of turnkey real estate rentals, find a reliable property management service to get the most out of your investment and locate a profitable, well-managed vacation home rental property.
Three Things to Consider Before Buying a Vacation Home to Rent Out:
- What are the best places to buy a vacation home in the world?
- What types of renovations or maintenance will be required, if any?
- Who will be responsible for successfully managing your vacation home rentals?
Here, we’ll talk you through this process to give you an idea of what to expect and what a profitable deal might look like.
Determine the Best Places to Buy a Vacation Rental Property in 2017
The best area or market is the first thing to decide when you are trying to weigh the pros and cons of owning a second home that will function as a turnkey vacation rental property. Start by asking yourself what the end goal of the investment is.
These days, there are thankfully some very easy-to-use tools that will allow you to see exactly where the property actually is, what the neighborhood looks like and even gather a variety of pretty sophisticated demographics for the area you are considering. Do some research and try to find the best place to buy a vacation home to rent out that you could afford, instead of looking only in areas you are familiar with.
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For example: Imagine a professional couple who enjoys regular beach getaways in places like the U.S. Virgin Islands, St. Barts and the Bahamas. Although they may love each of these destinations for their own unique set of charms, they might not be the best choices for a profitable turnkey vacation home rental.
By simply expanding the search to include vacation home rentals in Mexico’s Riviera Maya, our imaginary couple would find much better infrastructure, easier connections to and from the rest of the world and access to reputable property management services. Stretching 80 miles south from Cancun through Puerto Morelos, Playa del Carmen, Puerto Aventuras and Tulum, the Riviera Maya is also located on the Caribbean Sea, just like those other beach locales, but offers much greater value.
Successfully Managing Vacation Home Rentals
Property management is probably the number one key to successfully managing vacation home rentals, regardless of where you decide to buy. Without renters booking your vacation home, no money will come in and the investment will rely on appreciation alone to provide a return.
“Ask if your turnkey provider is also the management or if they bring in outside management,” wrote Bigger Pockets. “There are some great turnkey providers out there. Just make sure you ask the question who is managing my property? And if it is not the turnkey provider itself, what does this handoff look like?”
9 Questions to Ask a Turnkey Vacation Home Rental Property Manager:
- How much do you charge for renting the property?
- Who will actually be on site to manage the property?
- How much are the monthly management fees?
- What are the projected maintenance expenses?
- Who do guests call if there is a problem?
- Does the property come with a warranty?
- What is the projected monthly rental income?
- Can the rental income it be wired directly to your bank in USD?
- How do your rental fees compare to others in the area?
Turnkey vacation home rental properties are a strong asset class that are more attainable now to more investors than ever before. Their appeal is simple: Buyers get to enjoy all the benefits (and then some, depending on the location!) of real estate ownership without ever having to replace a light bulb or swing a hammer. Just make sure everything is transparent and you can log in any time to see exactly what is going on with your vacation home rental status – including bookings, charges, payments and scheduled maintenance. Don’t settle for less than a hassle free, worry-free partnership.
Are you considering turnkey vacation home rentals but are worried about potential maintenance and management nightmares? Share your questions and concerns in the comments section below!
So, what are you waiting for? If you’ve been sitting on the sidelines thinking about investing in a turnkey vacation rental, stop procrastinating and make it happen! Read on to discover how our "No Worries No Hassles ownership" program offers an innovative approach to property management and unbeatable return on investment ROI.