Considering buying a vacation home as a rental? It’s a different process from buying a primary home, and if you don’t know what you’re doing, it can be easy to make a few (potentially expensive!) mistakes along the way.
So what, exactly, are those mistakes, and more importantly, how do you avoid them?
A recent article from realtor.com outlined common mistakes buyers make when purchasing a vacation home as a way to earn income, including:
- Not checking local rental regulations. Not all areas allow short-term or vacation rentals. If you’re buying a property with the intention to rent it out as a vacation home, it’s important to understand local rental regulations and how they impact your ability to make an income from your vacation home. If you’re not sure about local regulations, ask your real estate agent.
- Not choosing the right management company. The vacation property management company you hire will play a huge role in how successful your rental ultimately is. They are generally in charge of everything from marketing, to customer service, to ensuring the home is clean for all new visitors, which is why it’s so important to do your research and choose a reputable company. When choosing a property management company, ask plenty of questions, like how they plan to market your property, their cleaning processes, and how they handle home repairs. If possible, you might also ask to speak to some of their current clients to get a sense of what it’s like to work with them.
- Shopping for yourself rather than the vacationers. As mentioned, buying a home for yourself and buying a property to use as a short-term vacation rental are completely different processes. Make sure that you buy a property that makes sense as a rental and don’t let your personal preferences cloud your judgment. For example, according to the article, one and three-bedroom properties are typically more attractive to vacationers than two-bedroom properties.
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