There are about a million different ways to invest your money. Some allow you to tuck money away and forget about it which will certainly benefit you in the long run, while others maybe are not the smartest thing to get involved with. Still, many others can provide a rewarding project that can pay dividends over a number of years while keeping you involved the entire time.
One such example of this is property investing. Investments in property are a great way to generate returns on your hard-earned dollars. There are all sorts of different types of investment properties, which means that there is something out there that will suit your needs and desires.
This year, perhaps it is worth considering new opportunities in property investments. If you have been in the game for a while and understand the ins and outs of the market and the demands of the customers, maybe it is worth getting involved with the vacation rental market. Exciting adventures await around every corner!
Popular Real Estate Investments
More and more often, we are seeing that international beach vacations are not just limited to the uber-wealthy. In fact, now more than ever before, vacations are feasible for the middle class and even those on a shoestring budget. Numerous businesses even cater to the “backpacker” style of travel, which is more experienced-based and cheap.
This ultimately means that regardless of whether you are interested in catering to a luxury crowd or an adventure-seeking one, there is something for you out there! One way to potentially tap both markets is to create something similar to a yoga retreat. The new face of luxury travel is focused on personal wellness and includes things like specialized meditation sessions, detox programs, and yoga classes. Likewise, many shoestring travelers are in search of a way to ‘find themselves’ and are willing to spend a few days in one area focusing on their yoga practice.
The perfect place to make a real estate investment like this is both affordable and beautiful. For example, somewhere like the Dominican Republic. Beaches are pristine and offer all sorts of soul-searching, relaxing opportunities that attract all sorts of individuals from all walks of life. The geography of the area could allow you to create whatever sort of vibe you are going for.
Creating the vibe that suits your style and the type of clientele you’d like to reach is key. In a beach paradise like the Dominican Republic, you could create nearly anything ranging from the ultimate zen relaxation palace to the hippie beach surfer hangout. You could focus on investing in a rental property that is designed for more long-term travelers planning to stay for over a month at a time or something like a hostel where many people may just rent a bunk for a couple of nights.
So you’ve made the decision that investing in a vacation rental property is ultimately what you want to do, great! Now there are a number of other important decisions to make and plenty of other information to gather in order to really be ready to implement. After all, it takes much more than just a good idea to make it a successful reality.
No matter which type of rental property you are investing in, it is imperative to do your research. Figure out what the financial markets look like, different real estate investment strategies, and what types of laws and regulations you are going to run into. These research topics all take on a trickier role when looking into international rental investment as differing governments will have potentially significant changes in rules and regulations.
And if you decide to invest in the US housing market, you have plenty of great options for buying a vacation rental property.
Vacation rentals can be a bit more difficult than a long-term, traditional rental property. Guests will be moving in and out more frequently, meaning, for example, you will need to budget for more cleaning to prepare for the next round of guests. You will also have to be more on top of things like rental rates, which can vary greatly based on the length of the stay, time of year, and what types of activities are taking place in nearby towns.
Other things to get organized when starting your vacation rental business include:
- Creating a business plan to outline goals and anticipated profits/expenses
- Investing in decoration and preparing for your target clientele
- Figuring the best way to advertise to an international market
- Determining if you are going to hire staff to help manage everything
- Managing bookings, payments, reviews, and inquires
Additional Things to Consider
Going through the motions above will get you started and well on your way to success, but there are still a number of other things that will crop up and that you need to take into consideration in order to maintain long-term success and profitability. For instance, what type of insurance are you going to use to cover your business in case of an emergency? Will something like home-based business insurance meet your needs? Or are you looking for a different form of coverage that will better cover you in your international location?
When you first get your vacation rental property up and running, it can seem like a great idea to advertise everywhere and target just about anyone that would be interested. But that isn’t necessarily the best idea. In fact, that is one of many errors that people newer to the industry are likely to make.
Rather than focusing on everyone everywhere, you are much better served to find your niche. Focus on finding your target demographic and working to cater your rental property to them.
Are you looking for older couples that are spending their retirement traveling? Or trying to attract a younger crowd that keeps the place feeling fun and exciting? Try to figure out where your target audience is getting recommendations or searching for rental options and focus your advertising there instead of broadly.
There is a lot that goes into purchasing and running a vacation rental property. There are many popular options that can attract a broad demographic and locations that can help keep your options open. When it comes time to enact your plan, work hard to complete all the necessary research. Going forward, be sure to focus on your customer base and prepare for unexpected things that can make running your business a challenge. Good luck!
This article has been contributed by Adrian Johansen.