Vacation Home Mistakes: 7 Top Things To Think About Before Buying
Today, I’d like to introduce you to one of my friends who’s also a client… Kim Mason. She and her husband Gary are owners of a property management company in the Orlando, Florida, area.
She recently stopped by my office and we had a long conversation about our business goals – both hers and mine. In my effort to give readers a more realistic approach to owning and managing a vacation rental business, I asked Kim if she’d mind sharing some of her expertise with you. She immediately agreed!
THINKING OF BUYING A VACATION HOME, NOT ONLY FOR YOUR OWN RELAXATION BUT ALSO AS AN INVESTMENT?
Some of you may be thinking about buying a vacation home as an investment property. Others may have thought about buying a vacation home for the second time around. Either way, before you buy, consider these property investment tips. And if you have some of your own, please share them with us.
Please give a warm welcome to our guest Kim.
Hey there! My name is Kim Mason. I am a Realtor, Property Manager and Yoga Teacher – Phew! Originally from the United Kingdom, I am so very blessed to be living the American Dream right in the heart of all things Disney!
Does this scenario sound familiar to anyone? You have just returned from the best vacation of your life and you so wish that it had never ended. Maybe you are thinking, “If we had our own vacation home, we could guarantee memorable vacations for years to come, not only for our family but for many other families too!”
Before you take the plunge, let me share some helpful tips about buying a vacation home.
1. Location, location, location
Before buying a vacation home, choose your location carefully. You want your vacation rental to be close to what makes you and your vacationers happy.
Why do property investors choose Orlando when considering buying a vacation rental? Its location!
Orlando has plenty to offer the visitor, but in reality, most families spend most of their vacation hours at the theme parks, so staying in a home that is easily accessible to the parks is very attractive.
Ask yourself, where do people want to go when they’re on vacation? Beaches? Mountains? Theme Parks? Then find a location with one of those attractions.
Remember, too, the more popular the rental community, the more your home will appreciate in value!
2. Buy a vacation rental property below your budget
Although the economy is on the rebound and the building of new vacation homes is on the increase, there are still some excellently priced resale homes.
Don’t fall into the trap of maxing yourself out and then stressing about being able to pay the mortgage. Buy what you can comfortably afford, see how it rents out and then, in the future, maybe sell and upgrade.
3. Don’t overestimate rental income or underestimate your expenses
Do your homework on current nightly rentals in the community where you are considering making your purchase.
Rental income will definitely help offset any expenses such as utilities, property taxes, insurance and home owners association fees, but there may be times you will have to personally add to the property expenses pot of money.
4. Obtain information on any restrictions
Most vacation communities have certain restrictions that you will need to abide by.
For example, home owners associations can have stipulations about what paint you can use on the outside of the home or how you should care for the grounds.
Realize that you may not always have total freedom with your vacation home and plan to work around any restrictions you’re given.
5. Understanding the tax implications
Sorry, guys, but we cannot escape taxes!!
For any home owner, it is very important to look into what your tax implications would be. Bear in mind that you would also need to pay income tax on the rental income you receive.
Your real estate professional will be able to help you find a good tax adviser and accountant.
6. Hire a property manager
When you are investing from a distance, you should have your home managed by competent professionals. Having a property manager on hand takes the stress out of the day-to-day running.
Your manager will ensure all aspects of the home are well maintained, the utilities and taxes are paid, and you and your guests are taken care of.
7. Employ the services of an expert
It’s true that property prices in the Orlando area still represent great value to the investor, but there are some additional expenses that you will have to take into consideration before buying a vacation home.
Hiring a knowledgeable real estate professional who will be able to guide you is paramount to helping you through the whole purchasing and negotiating process.
In general, the economy and the demand for rental properties are on the upswing. For example, 65 million visitors come to Orlando each year, and this number is increasing. If you are in a position to invest in property, then buying a vacation home is a great investment.
It pays to engage the right professionals at the start of your search and keep them with you after you have bought your home. Your real estate agent and property manager will save you a lot of heartache and time when you compare it to trying to do everything yourself.
If you would like further information, please email me at property (at) kimsmason.com or call me at (407)-973-5068. I would be delighted to help in any way I can.
If you would like a free vacation rental investment guide, mention the words “Free Guide” in the comments section, or send us a message here.