With so many different types of investment opportunities these days, you may be considering real estate as your next investment venture. Purchasing a vacation home you can rent out can be a fun and highly lucrative option. Let’s go over some tips on how to increase your profits when it comes to owning a vacation rental.
Know the Risks of Investing in Real Estate
All investments come with risks, and real estate is no different. Purchasing a second home to use as a vacation rental has the ability to help you make money through rental income, increase tax deductions, and gain equity over time. Ideally, you can pay off the entire cost of the home over time by renting the property out to others with very little expense to you. However, there are risks that can cost you more out of pocket than you expect. Rowdy guests can lead to property damage, property taxes in vacation locations tend to be high, and insurance on a vacation rental can be significantly more than your traditional residence.
Choose the Right Location
Selecting the right location is one of the most crucial decisions you’ll have to make when purchasing a vacation home. You’ll want to buy your home in an area frequented by tourists, and it’s also important to consider the home’s proximity to attractions. Atlanta is a great draw for vacationers because it features top-rated restaurants, designer shops, a thriving arts scene, and many family activities, making it ideal for owning a vacation rental. And with Atlanta home sales averaging $328,000, it can be an affordable market to invest in.
Small Upgrades Make a Big Impact
Whether your home is new or a fixer-upper, there are always small upgrades you can make that leave a big impact on your renters. Updating the kitchen cabinets, switching out the light fixtures, installing new flooring, or upgrading the shower head and faucets will all go a long way to improving the overall appearance of your home. If you are not handy or have physical limitations that prevent you from DIY tasks, then you may want to hire a professional to come in and help you. Though more expensive than doing it yourself, hiring a handyman can be an affordable choice, as these professionals charge between $100 – $300 per project.
Make Your Home Stand Out
In addition to upgrades and repairs, you can make your rental home stand out from the competition through décor choices and personal touches. According to WireCutter, focusing on details like bedding, pillows, and towels will go a long way toward impressing your guests. They also love extra touches like smart entertainment devices, Netflix, and fun kitchen appliances.
It’s obvious that a lot of work goes into owning vacation rental property, but with the right approach you can make it work for you. Research the best property, have a financial plan in place, and invest in quality amenities to impress your guests, and you will have a profitable vacation rental property to enjoy for years to come.