Buying a house or apartment to turn into a vacation rental is something that has become increasingly popular as a money-making endeavor in recent years. There are plenty of attractions to the process, not least of which are the greater flexibility than most buy-to-rent ideas, and the higher income that you can make from renting out this way. Getting the right property and avoiding unnecessary hang-ups are essential, though, so it’s worth having the following in mind:
Location, Location, Location
Not only are the usual location considerations to be taken into account here: you want it to be close to local attractions, well-served by public transport and in a scenic area. There is also the importance of local laws to be taken into account. Some local authorities or national governments have strict regulations on which properties can be used as holiday rentals. This is legal research you’ll have to do before you buy to rent on AirBnB – and you won’t get any concessions if you buy a property without knowing the local laws.
Assess value and amenities
If you’re planning to buy abroad, then it is worth having a basic calculation in your head. How much are you paying for the property, and how much can you expect to realize in rental income? The “Goldilocks Zone” here is a property in an up-and-coming location, where local real estate prices are low enough to make it a bargain buy, but tourists are likely to be prepared to pay a decent rental price. If you are looking abroad, for example, places like Egypt and Slovakia have a decent balance of good prices and tourist interest.
Getting the best price and closing the deal
The location is again important for getting the best deal here. You will need to factor in local property taxes and any fees that may exist. It is worth having a lawyer in your contacts who can help with the legal path to owning – be that abroad, or domestically – and also with any issues relating to property chains which may delay closing on the deal. You will also have to factor in the cost of bringing the property up to a standard expected of vacation rentals, and also whether you want to partition it out into multiple rental spaces to maximize income.
Managing the property
If you are buying a property in a country where you do not live – which is not uncommon – then you do need to consider the question of how it will be managed when you are not on site. Hiring a property manager who understands the local landscape is worth considering; it won’t come without a cost, but it can pay for itself in satisfied customers and better reviews. If you are local to the property, you need to strike the balance between being present and doing the work on one hand, and staying out of your tenants’ way on the other. You want the property to be looked after, but you don’t want reviews to say that you’re overly strict.
There are many benefits to buying a property for AirBnB rentals, as long as you know how the land lies. Making sure you strike the balance as set out above can make sure you get the best deal for your money.
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