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Avoid These Mistakes if You’re Buying a Property and Plan to Use it as a Vacation Rental

By
Real Estate Broker/Owner with Home Buyers Realty BRE 01247457

Considering buying a vacation home as a rental? It’s a different process from buying a primary home, and if you don’t know what you’re doing, it can be easy to make a few (potentially expensive!) mistakes along the way.

So what, exactly, are those mistakes, and more importantly, how do you avoid them?

recent article from realtor.com outlined common mistakes buyers make when purchasing a vacation home as a way to earn income, including:

  • Not checking local rental regulations. Not all areas allow short-term or vacation rentals. If you’re buying a property with the intention to rent it out as a vacation home, it’s important to understand local rental regulations and how they impact your ability to make an income from your vacation home. If you’re not sure about local regulations, ask your real estate agent.
  • Not choosing the right management company. The vacation property management company you hire will play a huge role in how successful your rental ultimately is. They are generally in charge of everything from marketing, to customer service, to ensuring the home is clean for all new visitors, which is why it’s so important to do your research and choose a reputable company. When choosing a property management company, ask plenty of questions, like how they plan to market your property, their cleaning processes, and how they handle home repairs. If possible, you might also ask to speak to some of their current clients to get a sense of what it’s like to work with them.
  • Shopping for yourself rather than the vacationers. As mentioned, buying a home for yourself and buying a property to use as a short-term vacation rental are completely different processes. Make sure that you buy a property that makes sense as a rental and don’t let your personal preferences cloud your judgment. For example, according to the article, one and three-bedroom properties are typically more attractive to vacationers than two-bedroom properties.
Joe Jackson
Keller Williams Capital Partners Realty - Columbus, OH
Clintonville and Central Ohio Real Estate Expert

It’s a great post. Thank you for sharing!

 

Have a super fantastic week!

Joe Jackson, Realtor-KWCP

Sep 19, 2023 08:53 AM
M.C. Dwyer
Melody Russell Team at eXp Realty of California, Inc. - Felton, CA
MC Dwyer-Santa Cruz Mountains Property Specialist

Important points to remember.    We showed an investor some awesome rentals with great cap rates, but they didn't invest in any of them because they couldn't see themselves living there, like they could visualize possibly living at the rental property they sold out of concern for fire & septic risks.    We referred them to another agent but I still don't think they've made their 1031 exchange investment - sad, really.

Sep 20, 2023 10:04 AM
Ed Silva, 203-206-0754
Mapleridge Realty, CT 203-206-0754 - Waterbury, CT
Central CT Real Estate Broker Serving all equally

I'm sure very few even acknowledge that there is a difference in personal and rental users. Very good points

Sep 20, 2023 03:14 PM
Georgie Hunter R(S) 58089
Hawai'i Life Real Estate Brokers - Haiku, HI
Maui Real Estate sales and lifestyle info

Keep in mind also that the legalities will probably change as more and more places restrict this type of use eventually.

Sep 24, 2023 01:23 PM
Diana Dahlberg
1 Month Realty - Pleasant Prairie, WI
Real Estate in Kenosha, WI since 1994 262-308-3563

Great post and good points for anyone even considering purchasing a rental unit or additional property to use as a vacation rental.  

Sep 28, 2023 02:24 PM