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Vacation Rental or Buy and Hold

Most property investors choose to invest in property that they purchase and rent or purchase and hold until the value increases.  Today more investors are turning to vacation rentals as a way to make some money.  It used to be that for vacation rentals to be profitable you had to buy expensive property in a tropical paradise and then rent it out, today with the likes of VRBO and Airbnb all of that has changed.  That leaves you with the question of whether to invest in vacation rentals or buy and hold regular property.  Let’s look at the advantages of both.

Buy and Hold

Buy and hold properties are simple, you find a decent property then you purchase it and rent it out or hang on to it until the price goes up enough to justify selling it.  That is it in a nutshell, you sell your property and collect your cash.  It has been one of the simplest business models to make money in real estate forever.  But it has its disadvantages too.

First, finding a good deal especially in a seller’s market can be difficult.  The market is unpredictable you can get stuck with property you can’t sell because the market has changed.  Lastly you are limited in the amount of money you can make per deal.  Rental income is subject to market conditions and you can’t change what you charge easily.

Vacation Rentals

It used to be that for a vacation rental to work you had to buy property in Florida or California, you paid an exorbitant price for it and you also were stuck with the burden of seeing that it gets rented.  Vacation rentals always seemed to an investor like a lot of work for very little reward.  The rentals were seasonal and your income was unpredictable.  But most of that has changed with sites like Airbnb.

Today making money from vacation rentals is much easier than it used to be.  You can earn an income with Airbnb with a simple one bedroom apartment, you don’t even need to purchase the property.  Today short term rentals are all over the world you don’t need property in a tropical paradise and it is far less seasonal.  Youc an cater to both vacationers and business travelers alike.  If you are unsure how to make money with an Airbnb then here is a guide.

Vacation rentals are still going to be work it isn’t quite passive income like a buy and hold property is, there will be tenant turnover.  You can still make some big profits with vacation rentals.

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How to Invest in Vacation Rentals

How to Invest in Vacation Rentals

Most property investors look for single family homes or apartment complexes for good opportunities neglecting the opportunity that vacation rentals can provide.  Investing in vacation rentals is a far different thing from a regular rental, business is seasonal and marketing can make or break you.  If you wondering how to invest in vacation rentals or how to make money from them then let us show you how.

Become a Marketing Expert

Marketing a vacation rental is nothing like trying to rent out one of your apartments.  You need to create some great listings with professional photos, your iPhone won’t cut it.  You need to make sure that you’re listed everywhere and that you’re getting enough exposure.  Your place needs to be THE place to stay when in town.  Remember you’re competing against other rentals and hotels as well.  Hotels have big marketing budgets.

Maintenance needs to be Done

Maintaining a vacation rental is not like an apartment building.  You cannot successfully profit from a rundown vacation home.  You will not only need to keep it clean but it has to be functionally pristine as well.  Apartment dwellers will overlook a running tap but vacation renters have much higher standards.

Offer Great Service

Being an attentive landlord is not the same as being an innkeeper.  You will need to answer all inquiries immediately both good and bad.  Add some personal touches to your vacation rental so that your guests not only remember you but are pleased by the service.

Know Your Market

Whoever rents from you has looked at the competition, you need to do the same.  Vacation rentals are a highly competitive industry and you need to understand the market.  Raising prices because your business is seasonal is something you need to do cautiously. You need to focus on offering value and an expert level of service.  Competitive pricing is only one part of your business, focus on occupancy more.

Details Matter

When it comes to vacation rentals you’re not just selling a place to stay but an experience.  It needs to be spotless every time someone new checks in, they need to be comfortable.  This is effectively their home away from home so make your guests feel like they are at home.  Yours needs to be the home they wish they had.

Vacation rentals can be incredibly lucrative if they are well managed and properly marketed.  Sites like VRBO and Airbnb have changed the landscape and offered plenty of opportunity to make some significant cash.

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