While buying a vacation rental property can be a smart investment, many people find it difficult to locate the right place. Purchasing a traditional piece of real estate can be difficult enough, but buying vacation rentals has its own unique challenges. Without assistance from a knowledgeable source, many would-be vacation rental owners struggle to find a property that will work for them. In fact, this is what inspired us to create More Nests.
Here are just a few of the challenges many people face when trying to buy a vacation rental:
Distance
Most people who are buying a vacation rental property want to buy in an area that is a significant distance from where they currently live. For instance, many Northerners want to purchase real estate in Florida or somewhere else in the South. An urban couple might be looking for a getaway in the mountains. As a result, they are forced to conduct their property search at a distance.
Distance presents a problem when you are buying real estate, because you usually need to see the property before you decide whether or not to buy it. Taking time to travel to your chosen vacation spot to house hunt can be time consuming and inconvenient. The more laborious search process that distance creates makes it harder to see a wide variety of properties in order to find just the right fit. At the same time, picking a property off the Internet can saddle you with rundown or otherwise unsuitable places.
What you need is a real estate source that provides you with in-depth information about a location to help you more efficiently narrow down your options to the very best ones. Then you can more effectively look at properties when you do have time to get out to your preferred area.
Lack of Familiarity with the Area
Another challenge that many people face when trying to buy a vacation rental property is a lack of familiarity with their chosen location. Unless you have already spent significant time vacationing in your chosen area, it is unlikely that you know enough about the place to make an informed purchasing decision.
This lack of familiarity makes it difficult to pinpoint the best location for your vacation rental home. You might not know where the most desired locations are, how far your home is from amenities, what the roads are like, how crowded the town is, and so forth. For instance, if you decide to buy a vacation rental property in the mountains of Vermont, but have never been there, you may not be aware of mountain passes that close in the winter and can cut your rental property off from the ski resorts you had hoped to use as an attraction. Without properly researching the area, you may accidentally end up with a property that no one wants to rent.
Unknown Rental Income
Another challenge often faced by people who are trying to buy a vacation rental property is that they do not know how much rental income to expect. This is especially true if the property they are considering has never been used as a rental before. Should they charge $300 a night or $100? Does the community allow for weekly rentals, or only monthly? (which will limit the number of people interested in the rental) What expenses will they have to pay that will cut into their rental income? (i.e. property manager fees, HOA fees, etc.).
Without extensive research into the rental market in their chosen area, they may end up selecting a property that cannot earn them enough rental income to break even or turn a profit. Overestimating the amount of rental income you can make might be the difference between affording your vacation rental property and struggling to make the mortgage payments. In fact, many people have landed in financial trouble because they expected more rental income from a property than they were able to generate.
Lack of Rental-Savvy Realtors
Not all realtors are created equal. Instead, most realtors have their own strengths and weaknesses when it comes to understanding and selling real estate. When you decide to buy a vacation rental property, you will need the guidance of a realtor who is familiar with the vacation rental market in the area where you hope to buy. Many people find it difficult to find such a realtor. As a result, they find it hard to get rental-specific questions answered (such as how much rental income the property can make). Plus, they find it difficult to even locate properties that are suitable as vacation rental homes.
Instead, you should try to locate a rental-savvy realtor who understands the market very well. This realtor can help you locate the most rental-worthy properties, as well as answer any rental-related questions you may have. MoreNests can help you to navigate these questions and find rental-specific properties, so you can more easily pinpoint the properties that will best serve as your vacation rental home.
See also: Affording a Vacation Rental Property
Difficulty Finding Rental Properties
Finally, it can be difficult for many people to locate properties that are suitable as vacation rental homes. Traditional MLS do not often differentiate between traditional residential properties and vacation rental properties. As a result, it can be difficult to tell which properties are best suited for vacation rental. For instance, a traditional MLS might list the specs on the home and the amenities, but not inform you of income and investment details, or other details that give you an idea of how the place would perform as a rental.
When you search for a vacation rental property, therefore, you should take the time to explore a rental-specific site such as MoreNests. By doing so, you will gain access to a slew of properties that are intended to be vacation homes, plus receive information that will make it easier to decide whether the house will work as a vacation rental property for you or not.
Finding the right vacation rental home to buy can be a challenge. That is why you need the help of resources such as MoreNests as you navigate the vacation home world. By overcoming the challenges created by distance, lack of familiarity with your chosen area, unknown rental incomes, lack of rental-savvy realtors, and difficulty finding rental properties, you can more easily find, purchase, and begin profiting from your own vacation rental property.
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