Here are three things to consider when investing in vacation rentals.
What do you know about vacation rentals? In case you don’t know, these include things like Airbnbs and VRBOs. They’re increasingly popular among investors, and I don’t think the trend is going anywhere. If you’re thinking about buying a vacation rental, there are a few things you should know first:
“Avoid homeowners associations if possible.”
1. Where is the property located?
There are a lot of potential restrictions to owning a vacation rental. For example, Paradise Valley just passed an ordinance that put new restrictions on vacation rentals. As a result, one of my clients recently ruled them out as a possible investment. Know restrictions like this upfront before looking.
2. Homeowners associations
If you want to own a vacation property, look for an area without a homeowners association. Even then, make sure there are no deed restrictions. However, if you truly want a property that’s in an HOA, check to see what their minimal rental term is.
3. How will you manage it?
Will you manage your own vacation rental? These properties are high maintenance, and if things go wrong, your tenants will need immediate relief. I know people who manage their own vacation rentals, but I frankly don’t recommend it. Find a decent property management company to offer some support. If you need a recommendation, reach out; I know a few companies you can trust.
If you have questions about today’s topic or anything else, please call or email me. I am always willing to help!
