As the COVID pandemic continues longer than anyone had anticipated, the travel industry has declined significantly.
People are flying but many are still worried about the risk of contracting COVID19. Driving to a destination seems to be the new norm and preferred method of vacationing.
Gas is more affordable and people are working from home and want a change of atmosphere.
Now more than ever is a good time to consider buying a vacation home and/or one that you can rent out on your own or using companies such as AirBNB or VRBO, etc.
We are fortunate to live in California where there are so many beautiful cities and oceanfront communities, but we also border many other lovely states so there are options for every budget.
How to Make a Investment Home Work
Think about a home that you would want to stay at with friends or family – what do you need to make it a comfortable vacation for a weekend or a week or longer?
Is the destination one that you find desirable? When you narrow it down, reach out to your real estate agent or broker so they can start searching for you or help you find an agent or broker in another state if they aren’t licensed there.
In this industry, we have contacts across the board and help each other regularly. Have your agent run a Comparative Market Analysis in order for you to make a reasonable offer. You’ll also want to speak to your lender to help you know what you can afford.
I recommend obtaining a pre-approval letter to present with your offer as it helps expedite the process and shows the seller that you are serious and qualified, automatically making your offer more desirable.
Don’t forget to factor in decorating the house and buying appliances if they are not part of the purchase offer.
Once you begin to look at potential vacation homes, be sure to drive around or research the area.
Find out what you can include in your advertisements if you decide to rent it out or things that you will enjoy while decompressing or working remotely.
Some folks may just want to buy a vacation home for a change of scenery since so many people are working from home these days and it looks like it will be our new normal.
Others may want to rent it out during the times they won’t be using the home.
Factor all of this in because if you do decide to rent it out or use a company to assist you, you’ll need to come up with a schedule of when the unit will be available.
You may even want to consider a duplex or triplex so you can always have your own space and not worry about your scheduled times.
However, keep in mind that many want their privacy and be sure to disclose the fact that it’s a duplex or larger if you go that route.
Home Aesthetics Attract Renters
When you have purchased your ideal vacation home, you’ll need to decorate it accordingly.
If you do decide to rent out the home, look for furniture that’s easy to clean and will last. How you decorate will also be reflected in the ads.
More people will be inclined to rent your home over someone else’s if they find it attractive.
Adorn each room accordingly and don’t forget to buy all of the necessary appliances if they didn’t come with the house when you purchased it. A refrigerator, stove, microwave, washer and dryer and maybe a security system.
Consider hiring a decorator and a professional photographer to make your ads stand out.
If you rent out the home, you’ll also need to think about hiring a cleaning company to take care of it in between renters.
With this pandemic, be sure they follow protocols on sanitizing, especially frequently touched surfaces.
You’ll also need to look into insurance so get some quotes beforehand to help you decide which route you want to go.
Final Thoughts on Investment Opportunities
Lastly, if you do decide to rent out the home, you’ll need to come up with a nightly or weekly rental figure that makes sense to you and helps pay for your mortgage.
That amount also needs to be competitive with other rentals in the area so do your research.
Don’t forget to include what you pay for utilities, insurance, property tax, a cleaning company and rental agency fees if you choose that path.
A vacation home that you can rent out is an excellent way to invest in real estate during these unprecedented times. If you set it up correctly, it can pay for itself!
Otherwise purchasing a vacation home for you and your family and friends is a nice long term investment and can provide a change of scenery especially with so many people working remotely, a trend that looks like it might be here to stay.
Your real estate agent or broker will be able to assist you with most of what’s involved with buying and/or renting a vacation home so reach out to them for advice on how to get started!