Invest in a Vacation Rental
According to many experts in the vacation rental market, that time may be now.
Demand for vacation rentals, also known as short-term rentals, has dramatically increased since last year. After a year-plus of being shut away in our homes, many Americans are ready to escape their daily lives for a fun trip away from their living rooms.
Now, with the growing availability of COVID-19 vaccines, more travelers are planning future getaways with their friends and family members.
This makes it an interesting time to assess the market for those with disposable income and dreams of becoming a property investor.
Consider these statistics:
• In a recent Vacasa survey of U.S. travelers, 59% said they plan to take a vacation in 2021.
• 52% said they would stay in a vacation rental more often in the future.
• A recent National Association of Realtors survey found there was a 16% increase in second home sales in 2020.
Location is Everything One of the first things you’ll learn when you get started as a real estate investor is the importance of location. Experts say this is the single most important factor in determining your success as an investor.
You can invest a lot of money and time into a vacation rental home, but if there is no demand for it, you may be wasting your resources.
Getting Started
Below are some things to consider when deciding where to invest in your first vacation rental.
In determining any of these data points, it always pays to enlist the help of a qualified, credentialed agent from your area.
• Property prices, rental rates and the price-to-rent ratio for the local market.
• The market’s real estate appreciation rate.
• Tenant occupancy and vacancy rates.
• Tourism growth and potential.
• Average income for families in the region.
Once you understand these statistics, you can start to see a fuller picture of the vacation rental market in your area. Use this data to inform your conversations with real estate agents and lenders.