Are you looking for ways on how to buy vacation rental property to cash in on the summer season? Well, look no further!
Why consider buying a vacation rental in the first place?
The vacation rental industry has very notably been growing in the past decade in the US, as well as globally. Home-sharing services like the industry giant Airbnb are expected to overturn hotels by 2020. The US real estate market has been doing very well too. So if you’re looking for a profitable, low-risk investment, Airbnb vacation rentals are your choice. And if you’re planning to rent out your investment property this summer, now is the time to start your search.
But before you start browsing real estate listings, there are things you need to do before and after the purchase- things you need to do to learn how to buy vacation rental property and things you need to do to set up your property for summer 2019.
Before the purchase
Before you go ahead and buy a vacation rental property, there are a few things you need to do. Looking for a vacation rental property isn’t much different than looking for a traditional property (one you rent out to long-term tenants). However, there are a few extra details you will have to pay attention to.
Location can often determine the profitability of your investment property. For a real estate investor, a good location for vacation homes entails good demand for short-term rental property, high Airbnb rental income, and high Airbnb occupancy rates, all at an affordable price.
What do travelers look for?
When considering vacation rentals particularly, you want to look for an investment property that’s in a central location and that’s close to amenities and transportation hubs as these factors can be a priority for a traveler. So the closer the rental property is to a city/town center, the more often it’ll be booked. Not only is location important as a profitability measure but it’s also key to maintaining a high Airbnb occupancy rate.
Some examples of the best places to invest in a vacation rental property are the Florida real estate market and the Michigan real estate market. In addition to these locations, we’ve recently compiled a list of The 10 Best Places for Buying Vacation Homes based on data from Mashvisor’s rental property calculator. You can also check out our real estate investment blogs to find the latest data on the city and state you’re looking into.
Laws and regulations
When investing in real estate properties, you should always look into the laws and regulations of the city you invest in. When buying a vacation rental property specifically, things get trickier. Recently, several US cities have had legal issues with the home-sharing service, Airbnb. Many of these legal battles resulted in tough laws and regulations for the service. Cities have also noted that there’s a large number of real estate investors using the service, as opposed to home-owners renting out a room or an area in their property. As a result, some cities have completely banned non-owner occupied properties from renting out on Airbnb.
What does this mean for the Airbnb investor?
Quite frankly, it can mean that investing in some cities like San Francisco and New York City has become more challenging. However, there are plenty of other profitable Airbnb locations. Just make sure to look into the local laws and regulations of the city/state you choose to invest in to avoid falling into a legal problem.
Airbnb profit calculator
Another step to make learning how to buy vacation rental property easier is using an Airbnb profit calculator. An Airbnb profit calculator is a tool that allows investors to calculate different real estate metrics such as cap rate, cash flow, expected rental income, and Airbnb occupancy rate. It’s important to find and analyze these metrics before buying an investment property. They will allow you to analyze profitability as well as do comparable (comp) analysis.
Where can you find an Airbnb profit calculator?
Another factor to consider when understanding how to buy vacation rental property is time. Not only does it have to be the right time for you (personally and financially), but it should be a good time in terms of real estate market conditions.
When is the best time to buy a house to rent out on Airbnb?
Fall and winter are usually the best seasons to buy real estate property, so you’re in luck. Generally speaking, during these cold months, there are usually fewer buyers on the market, lower demand for homes for sale, and thus less competition. If you want your vacation rental to be ready by the summer, then you need to start looking for and analyzing investment property now!
After the purchase
Get your rental property ready for summer 2019!
Towards the end of spring and beginning of summer, start stocking your vacation rental property with everything that Airbnb guests expect to see in a property.
What do Airbnb guests expect from a short-term rental property these days?
Today’s vacation properties have it all – from toiletries like shampoo, soap, towels, etc., to food including snacks, coffee, tea, among other items. One of the best ways to do this is to put yourself in the guest’s shoes: What would you want to find in a vacation rental property?
Marketing your vacation rental property
When you list your property on Airbnb.com, you get to use the platform’s tools for marketing purposes. The site allows you to upload photos, add a description, and even has a review section on the bottom. Airbnb reviews are a critical component of your property listing. If you have good Airbnb reviews, you have good word-of-mouth marketing! Guests take reviews seriously, especially in today’s transparent service industry. So encourage guests to write reviews, and give your guests something good to review, whether it’s cleanliness, good location, customer service, or ideally – all of the above.
How should you market your rental property on Airbnb?
Make sure to upload high quality, aesthetically pleasing photos of your Airbnb rental property. Additionally, write a vivid description of your property, and add a sentence or two about what makes your property special.
Try to rent out your property a few times before the summer
This will help you get at least a few good Airbnb reviews so your rental property has a competitive edge. This way you’re ready for the summer!
All in all, learning how to buy vacation rental property…
isn’t very different than buying other types of real estate property. One solely needs to consider the vacation aspect of it, and adjust the investment strategy accordingly. So in a nutshell: location, real estate metrics, laws and regulations, and marketing.
Now that you know how to buy vacation rental property, you can get started with your investment property search! To start looking for and analyzing the best Airbnb investment properties in your city and neighborhood of choice, click here.