6 Reasons why it's smart to buy a vacation rental home, from RISMedia.
Lately, you've been thinking a lot about investing strategies. You have a
small nest egg that needs to grow, but frankly you don't trust the
stock market. (If you're like many investors, your 401(k) hasn't fared
well in recent years.) And while real estate has been somewhat of a
rocky road in recent years, it's still a solid long-term investment
strategyâ€”and clearly we're in a buyer's market. But you aren't really
interested in being a landlord. What to do?
Christine Karpinski has a suggestion: Purchase a vacation home and rent it out to travelers.
"Vacation homes are almost always a good investment," says Karpinski,
director of Owner Community for HomeAwayâ€”te the world's leading vacation
rental marketplaceâ€”and author of How to Rent Vacation Properties by
Owner, 2nd Edition: The Complete Guide to Buy, Manage, Furnish, Rent,
Maintain and Advertise Your Vacation Rental Investment (Kinney Pollack
Press, 2007, ISBN: 0-9748249-9-2, $26.00).
"First, if you're looking for a good long-term investment, real estate
tends to be a good bet," she adds. "Second, vacation properties have the
ability to pay for themselves, and owners often earn a profit in rental
income. Third, the investment comes with the desirable perk of having a
place at the beach or in the mountains to call your own. And finally,
there has never been a better time to buy a vacation homeâ€”it's like the
planets have all lined up perfectly."
Karpinski, who owns vacation homes in several parts of the country, says
she herself is looking for new properties to invest in. Overall, she
says, the vacation home rental market is a burgeoning segment of the
Want to know more? Read on for a few reasons why there's never been a better time to go vacation rental house hunting:
1. There have never been so many properties on the market.
For potential home buyers, there is a silver lining to the slow economy
and the housing crisis: Most vacation markets are chock-full of buying
opportunities. Once you've pinpointed the vacation rental market that is
right for youâ€”The coast? The mountains? A ski resort area?â€”you will
likely have a lot of properties to choose from.
"There are many properties available right now in many different areas,"
says Karpinski. "Once you start hunting, I think you'll be pleasantly
surprised at what you find. But I must offer one caveat: Before you let
yourself fall in love with a property, make sure it is legal to rent it
out as a vacation home. Some areas and homeowners' associations do not
allow short-term rentals."
2. Prices aren't going to get much better. In fact,
they're the lowest they've been in five to ten years. If you're pretty
sure you want to buy a vacation home "someday," you might want to quit
procrastinating and pull the trigger, says Karpinski.
"Prices should increase eventually," she points out. "Now is the perfect
opportunity to make a really sound investment. In fact, speaking from
my own perspective, I'm afraid that if I don't take the plunge now, I'll
look back ten years from now and say, 'Why the heck didn't I buy back
3. Interest rates are very favorable for purchasing. Today, mortgage interest rates are low. Bottom line: Take advantage of them while they last.
4. These days, you have access to the best real estate professionals.
Anyone connected to the housing market who managed to survive the
housing crash had to be at the top of his or her game. That means the
agents left standing todayâ€”including the ones you'll be working with in
your search for the perfect vacation homeâ€”are possibly the best of the
"Quite simply, the real estate professionals still working today are the
top in the business," says Karpinski. "And because vacation home
renting has become so popular, they are more knowledgeable than ever.
Use their knowledge to your advantage. They are at your service when it
comes to helping you hunt down the best property for you."
5. It's never been easier to rent your vacation home. As
mentioned earlier, vacation home rentals have never been more popular.
More and more consumers are choosing to stay in cozy condos, cabins, and
chalets instead of cramped, impersonal hotel rooms when they travel.
And as market demand has surged, organizations have sprung up to help
connect vacation homeowners with these potential renters.
6. If you buy now, you can be ready for the 2011 peak season. It's
true that the longer you wait to buy, the likelier it is that interest
rates could rise. But there's another reason not to procrastinate: If
you buy now, you'll have time to get your property ready for peak rental
season. Experienced vacation homeowners often find that the rental fees
generated during the twelve weeks between Memorial Day and Labor Day
pay their mortgages for an entire yearâ€”and most inquiries come in
between January and March.
"Even turnkey properties aren't really turnkey," notes Karpinski. "To
get your property up to your standards, there will very likely be things
that you will want to spruce up. Rooms might need repainting.
Decorating will need to be done. And the yard might need some work. By
buying now, you will have a cushion of time to get the home ready for
your guests, take great photos for your property listing, and start
marketing it to potential renters."
"Someone is going to be smart enough to take advantage of the great
buying opportunities available today," says Karpinski. "That person
might as well be you."