Investing in a Vacation Rental

Owning and Operating a Vacation Rental is now as easy as 1-2-3.

Buying: Approximately 4years ago my husband and I sold some land we owned that was ripe for development. Because we had the road in and zoning for 28 lots it was quickly picked up by local developers. We then 1031 exchanged our profit for a beach front house with a hot tub. We quickly found ourselves asking ourselves how can we make our investment work for us. Because it was an investment property we couldn't really move in, plus we wanted to make our investment pay it's own way as we waited for it to acrue interest. Because it was an older home we found the taxes to be quite low despite the fact that it was ocean front. Because it was an older home that had been remodeled we found the taxes would never go up more than 3% a year. We didn't want the wear and tear of a year round rental, plus we wanted to ablity to use it ourselves if we felt the urge. That was when a friend who had a vacation rental encouraged us to do the same.

Renting: There are many options today for a vacation rental owner. In the past a property owners only choice was a local property management company that handles all the booking and cleanings for you and then charges a wopping 25 or 30% of your profits. Being slightly computer savy I began to explore how we could handle bookings our property. I quickly found vrbo.com (vacation rentals by owners). You can list your home for around $200.00 a year. The prices vary depending on how many pictures you choose to display. People worldwide can then access your property and a calendar that you block out with each booking. Guests are given the option of contacting the owner by email or phone. In addition, you are given the option to add paypal as a form of payment which accepts all credit cards. We try to be flexible and accept checks and paypal depending on the guests perference.

Decorating: If your property is well staged as ours was we just added furniture. When we made our purchase we looked for a property that was ready to go rather than a fixer upper. It really depends on how handy you are and how much time you have. We also lucked out because the owners left the pictures they used for staging, all ocean scenes that complimented the natural aspects of the coast. For furnishings we chose used, and added some things from home. Other properties go straight to Ikea and just outfit the whole place, another easy strategy. Purchase linens at a discount store like Ross, or go all the way and get the best at Crate & Barrel. The same with kitchen. You can bring extras from home, hit garage sales, or buy all new. It depends on the look you are trying to achieve.

Cleaning and Maintenance: This can be done hands on or farmed out. We do our owning cleaning, and maintain the hot tub ourselves. One of my clients though lives in Portland and farms both out. She hires us to do the cleaning and small maintenance projects, and hires a hot tub contractor to take care of her hot tub. Last week after a year in business they had the yard landscaped and called in contractors to do the work.

Great Investment: Ocean front property, and property with close beach access will never lose it's value. While the rest of the world goes into foreclosure vacation properties grow in value. At the end of the year you get to write off all of your expenses. Linen, advertisement, maintenance, your computer, the list is endless! No matter what they say you can't go wrong with investing in a vacation rental.