Vacation rental properties are growing in popularity. This is often a great answer for some of today’s financial trials. If you find yourself interested in purchasing a home as an income investment, this may be your answer. You may also be considering renting your own home on a part-time basis. There are a few things to consider when making this decision.
Where is your property located? Of course vacation rental property I a great idea if you are located in an area that is popular with vacationers. Locations such as Village at Disciples Ridge and Creekside at Boyne Resorts in Boyne Falls, Michigan are a great exmple of a good location.
Before you make a purchase, or place your own home in a rental pool, study the area well. Determine which seasons bring the most traffic to the area. You will also need to familiarize yourself with local attractions and learn what kind of tennants this will attract. Are you in an area with family attractions or is the area pupulated with golf courses? Is there opportunity for sports in the area? Can your visitors boat or ski? Can they bike, hike or sightsee? This will give you an opportunity for incentives. In a market that is saturated with vacation rentals incentives may be what pulls the renters to your property. They will choose your property if you offer more than the others. A stay in one of the rental units at Creekside in Boyne Falls includes a family pass to Avalanche Bay, a waterpark located at the resort.
Finding a good property manager can make the difference in the success of you business venture. It is very important that you select a property manager that is familiar with the area. It is important that your property manager is firm, but possesses great people skills. He/she will be your representative and often the only face your tennant will see.
Your Property Manager (PM) is resposible for all on site repairs and the maintenance of your unit. Prior to a tennants check in, the PM should inspect the property to assure that all is ready for check in; cleanliness, linen supply, working appliances, etc. when the tennants depart, the PM should also inspect the unit; for damages, and to assess required cleaning.
The PM will make necessary arraingements to have the unit cleaned and prepped for the next tennant. The PM will also negotiate costs, reservations and any other expenses.
It is a good idea to establish a Rental Reserve Account. Decide on a percentage of rental income to place into this fund. Use this fund to pay for any and all expenses for the upkeep of your rental unit. I would also require a refundable deposit to cover damages or excessive cleaning. Remember though, your tenants expect you to be fair and will not return if the deposit is not refunded to them.
Because your PM will be handling money and valuable property, I would suggest a background check as well as bonding your employee. Your PM should live in the area and be accessible in case of emergency.
I would suggest that you set limits on spending and require owner approval for purchases or repairs over a set amount. I would also require an itemized report of all expenses at each month end. This can be done on a simple Excel spreadsheet.
Your property can pay for itself if the location is good and it is managed properly. Word of mouth is the best or the worst form of advertisement. A good property manager can make or break your vacation rental venture, so choose carefully and not hastily.