Do you want to make money in real estate over the summer? Consider looking for vacation homes for sale! Owning a short-term rental this year is the best investment strategy that will have you generating positive cash flow in no time.
The economy is thriving and people are buying and selling homes faster than ever. That is why you need to take action and take action now. Start searching for the hottest real estate markets for the best real estate investment opportunities. If you’re searching for the next best place to invest for Airbnb short-term rentals like vacation homes, then the California real estate market has what you’re looking for.
California has been known as the best place to find vacation homes for sale this year for so many reasons. So if you have been looking for vacation homes for sale, then continue reading and find out where exactly in California you should invest. But first things first, let’s talk about why you should invest in vacation homes and the advantages that come with investing in short-term rentals.
Why you should invest in vacation homes
1. Earning a high return on investment
One of the many compelling reasons why so many property investors choose to invest in short-term rentals like vacation homes is the high return on investment they provide. Renting out your vacation home through short-term rental websites like Airbnb allows you to maximize your rental income through different pricing strategies. You have full control of the rent price you want to charge your guests. This price range can be altered depending on the season, period and location. Having this much power in your hands means that you can earn the highest return on investment and rental income possible.
2. The Airbnb business is growing in popularity
Investing in short-term rentals through Airbnb is the new black these days. This investment strategy is growing and does not look like its slowing down anytime soon. As for Airbnb investments in California, it is definitely a winner. Look for vacation homes for sale in California and boost your rental income.
3. Tax benefits
Vacation homes are a great way to earn extra income and give you some additional benefits to your annual tax returns. This is the extra push that every investor needs to go out there and start looking for vacation homes for sale, especially in California. However, every Airbnb host should carefully determine the amount of time the rental property is rented out as opposed to the amount of time it is begin used personally. Tax breaks depend on the amount of time that the property is being used versus the amount of time it is rented out as a form of business.
So if you rent out your vacation home for 14 days or less, your short-term rental will be considered as a primary residence and you will be able to deduct mortgage interest rates. If you want to learn more about the tax deductions for Airbnb rentals, read: “Your Guide to Short-Term Rental Property Tax Deductions.”
4. Vacation homes become your second home
The cool thing about owning a vacation rental is that it serves two purposes. When you are not renting it out as a type of investment, you can use it for your own personal enjoyment. It gives you money in the form of rental income which you can use to pay for bills or use the money for your next vacation! It’s a win-win scenario for everyone!
What are the advantages of investing in short-term rentals like vacation homes?
Real Estate Appreciation
REAL ESTATE APPRECIATION: we all know it and we all love it! Lately, home prices have been skyrocketing resulting in high appreciation for rental properties. The value of your vacation home will rise as long as you hold onto your property. In the future when you property joins the group of vacation homes for sale, you will be able to make more money due to appreciation.
Rental Income of course!
Like I said before, a great reason to invest in vacation homes is the RENTAL INCOME! In order to generate a high Airbnb rental income, you need to estimate the amount of rent to charge your guests. Charging too high will have you staring at an empty rental property while charging too low will have you miss out on making a profit.
To know exactly the range for your rental property’s rent charge, you need to conduct a comparative market analysis. By conducting a real estate market analysis you can compare other vacation homes in your area with similar features to your investment property and see what price they are charging. Mashvisor has all the necessary real estate investment tools to help you perform a real estate market analysis.
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Another factor to take into account that will affect your rental income is your occupancy rate. You need to always aim to maintain a high Airbnb occupancy rate year around. There are different marketing strategies that will help you attract guests to your rental property and reduce your chances of having a vacant property. California has vacation homes for sale that have high Airbnb occupancy rate that will guarantee you high financial rewards. If you want to learn more about your future Airbnb occupancy rate, read: What Kind of Airbnb Occupancy Rate Can You Expect?
Now that you have a clear idea of the benefits that come with investing in vacation homes, let’s take a look at our main motivation behind writing this blog: the CALIFORNIA REAL ESTATE MARKET!
California real estate market
The California real estate market is hot and trendy for many reasons. With its thriving economy and growing job hub, this golden state is the heart of real estate investing. The California real estate market is known for its high home prices and rental income, offering lucrative opportunities for property investors.
Furthermore, investing in Airbnb rentals is currently the best investment strategy for 2018 in California. Plus Airbnb is legal in the California real estate market and is home to many tourist attractions. For that reason, many investors are searching for vacation homes for sale here. According to Mashvisor’s investment property calculator, the best places in the California real estate market to buy and find vacation homes for sale are the following:
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Vacation homes for sale in California: Oakland
City level stats:
- Median Property Price: $858,692
- Airbnb Rental Income: $3,205
- Airbnb Cash on Cash Return: 1.45%
- Airbnb Cap Rate: 1.45%
- Airbnb Occupancy Rate: 60.38%
Top neighborhoods for vacation homes for sale:
#1: Shafter, Oakland
- Median Property Price: $244,345
- Airbnb Rental Income: $4,307
- Airbnb Cash on Cash Return: 9.74%
- Airbnb Cap Rate: 9.74%
- Airbnb Occupancy Rate: 72.04%
#2: Arroyo Viejo, Oakland
- Median Property Price: $442,933
- Airbnb Rental Income: $3,355
- Airbnb Cash on Cash Return: 3.4%
- Airbnb Cap Rate: 3.4%
- Airbnb Occupancy Rate: 66.05%
Vacation homes for sale in California: Richmond
City level stats:
- Median Property Price: $593,216
- Airbnb Rental Income: $2,584
- Airbnb Cash on Cash Return: 1.76%
- Airbnb Cap Rate: 1.76%
- Airbnb Occupancy Rate: 55.95%
Top neighborhoods for vacation homes:
#1: Atchison Village, Richmond
- Median Property Price: $211,000
- Airbnb Rental Income: $3,028
- Airbnb Cash on Cash Return: 5.66%
- Airbnb Cap Rate: 5.66%
- Airbnb Occupancy Rate: 62.73%
#2: Richmond Heights East Richmond, Richmond
- Median Property Price: $584,750
- Airbnb Rental Income: $4,186
- Airbnb Cash on Cash Return: 4.03%
- Airbnb Cap Rate: 4.03%
- Airbnb Occupancy Rate: 64.57%
A final thought
Start your search today and find the best vacation homes for sale in California! But keep in mind that any successful real estate business begins with the right plan and great knowledge. To help you gain more knowledge about everything you need to know about short-term rentals like vacation homes or any other real estate investing strategy, check out Mashvisor’s knowledge center!
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