Real estate investors in the market for a vacation home have a variety of ways to make the purchase profitable. Whether renting out your home long-term or short-term, you have plenty of options.
Below, we'll explore some of the ways you can get your vacation home producing income, and why an international investment may be the perfect choice for a cash-minded investor.
The classic way of turning your property into cash, leasing to long-term tenants (i.e. a month or longer) is a great choice if you anticipate extended periods without use of your property.
Unlike platforms intended for multiple guests with frequent turnovers, signing a lease means minimal expenses for cleaning, maintaining, and re-renting the property. Additionally, professional property management services are available worldwide, enabling owners to just sit back and wait for the monthly rent deposit for a small fee.
Do It Yourself vs. Hiring Out
Many investment property owners manage their rentals themselves. This is a great way to avoid the expense of hiring a rental manager, and for the investor comfortable with working remotely, possible even without living in the same place as the property. Free rental management services like Cozy, for example, allow you to list rentals, screen tenants, and accept rent payments from anywhere without cost.
The downside to self-managing your property is that it takes time you may find more valuable elsewhere. Additionally, you'll need to make sure you have some reliable services on speed-dial in case of an emergency or repair. A reputable plumber, electrician, handyman service, and cleaning service are a good idea for rentals located away from home.
An upside to professional management is that managers usually have access to in-house maintenance services or partner businesses at a much cheaper rate. If you are closing on a large property, multiple properties, or property located in a foreign country or far away, it may be worth it to pay the management fee and save the time expense of self-managing.
Airbnb is likely the most recognized, but there are a variety of options for the investor preferring more flexibility in accessing their vacation home.
While a long-term lease reduces the expense of repeated turnover, it also means less time for you to enjoy your rental. Using a vacation rental service like Airbnb lets you plan out well in advance what dates you'd like to have the property rented, and make it a snap to block out as many dates as desired for personal use. Additionally, the average per-day rents from a vacation rental platform are typically much higher than in a traditional lease. Many traditional landlords are now even using this platform for their local rentals, as far higher profits can be realized in a popular destination.
The downside to short-term renting, however, is the frequency of turnovers. Multiple turnovers mean multiple cleanings and maintenance tasks between tenants. Particularly for remotely located properties, owners interested in the higher flexibility and potential profit of vacation rental platforms may wish to hire out managing the residence.
Additional Income Streams
Besides rent, potential tenants will frequently pay for a wealth of additional services. On-site laundry, for example, is a cheap investment that produces some respectable income, and a popular amenity for travelers.
For extended leases, tenants are often willing to pay extra for cleaning services, landscaping, or additional services they'd otherwise be responsible for. Negotiating the cost of hiring out the service and charging an additional fee for convenience means extra cash in your pocket without an ounce of extra effort.
For residences in hot tourist destinations, consider partnering with private taxi, shuttle, or limousine services, or negotiate special rates for tenants with nearby businesses. VIP access to popular destinations or services make your rental that much more desirable, and revenue from rents and fees can be raised accordingly.
Ultimately, you may find that the best revenue is achieved not through a large portfolio, but by operating a smaller number of properties more intelligently. A vacation home means not only private access to some of the globe's most desirable locales, but can also serve as a formidable source of cash.
Let Us Show You How to Earn Income from Your Home
Schooner Bay homeowners are savvy buyers, so we get a lot of interest in our rental program to increase the value of their investment. We even offer a Rental Return Guarantee for the first three years!
Who doesn’t love a win-win scenario?
But before you consider how you will earn income from your home, you should get clear on what you’re trying to accomplish:
- Do you want to offset some of the expenses of owning a vacation home?
- Are you trying to break-even on your investment?
- Do you want to earn a profit on your investment?
It’s easy to immediately jump to the idea of making a profit from your vacation home, but you also have to consider what you would be giving up in terms of when your family gets to use your home. Fortunately, we can help you plan the best course of action for your financial goals.
To learn more about earning income from your home in paradise, give us a call at (844) 288-3648.