Buying a home is just as exciting the second time around, and nine million homeowners agree.
People decide to own a second home for a variety of reasons – like, to use as a family vacation spot, a split residence, an investment, or all three.
One of the most popular locations to own a second home is the beach, followed by the lake. Conveniently, this is also the most popular type of travel destination. Purchasing a beach home can not only be a source of great family memories but also additional income.
We sat down with Kristina Halfacre, a Real Estate Agent with RE/MAX Paradise Properties in Orange Beach, Alabama help you buy the beach vacation rental of your dreams – here are her top 6 tips:
1. Decide on what’s more important to you – a view or a profit
While yes, you can have both, some homes are better suited for one or the other.
“It really comes down to what they want from the return on their investment,” Kristina says.
Homes that are located on the beach can definitely be rented out at a higher rate per night, but you’ll be spending more on the home at the outset and might just be breaking even those first few years. With homes that are maybe a block or two from the beach, owners can expect to start seeing a return on their investment a bit sooner since they’ll generally be paying less for the home.
Regardless of your answer, make sure you follow the 10% rule – aim to make at least 10% of what you’re paying for your vacation rental in revenue.
2. Know whether you want to purchase a house or condo
When buying a second property to use as a vacation rental, you have two options: a house or a condo.
There are two big factors in deciding between the two.
First, how involved do you want to be in managing the property?
Generally, buying a condo means your Homeowners Association will oversee the exterior upkeep of the building. With standalone houses, you’re generally on your own – unless you hire a property manager, like TurnKey to manage your property.
TurnKey will also handle interior maintenance, stocking your home, and managing your reservations. Learn more about partnering with us here.
Buyers who live far from their second home and are planning on using it primarily as a vacation rental to would most likely want to buy a condo – or a house if they have the intention of hiring a property manager.
Second, how much are you looking to spend?
“If they’re looking at properties over $500,000, they’re looking for a house because ROI is a bit higher. If they’re looking to spend below $500,000, I’m going to recommend a condo because ROI would be better there,” Kristina says.
3. Find a realtor who specializes in vacation rentals
Just like teachers specialize in subject areas, realtors specialize in types of property they sell. For example, Kristina specializes in waterfront vacation rentals.
“As agents, we gravitate towards one niche or another,” Kristina says.
Always research your real estate agents, and ask them about their experience. Taking the time to vet your agent will ensure you’re in good hands.
“This is a big transaction – you need to trust that person 150%,” Kristina says.
4. Ask the seller the right questions
Just like it’s important to ask your realtor the right questions, you need to make sure you’re asking the seller the right questions about their home.
The 3 questions Kristina says you must ask are:
What is the rental history of this property?
Are there any pending assessments on this property from the HOA?
Are there any restrictions from the HOA on when or how long I can rent this property?
Asking these questions can prevent you from encountering any surprises down the road.
5. Put yourself in your guests’ shoes
One of the main reasons guests choose vacation rentals when they travel is because they prefer to have the comforts of home while they’re on vacation.
“People want something at least as nice as they have at home,” Kristina says. “Put yourself in the renter’s position and think about things you’d want in a rental – you want to make your guests as comfortable as you can.”
It can be as simple as having soft sheets or enough fresh towels. For more ideas to make your guests feel at home, here are our suggestions for 4 Must-Have Amenities For Your Vacation Rental and tips for Picking the Perfect Decor For Your Beach Rental.
6. You’ll know when you know
Sometimes, it takes looking at dozens of homes for a person to know which home is the one for them. (Side note: Kristina recommends buyers look at about 3 homes per day and no more than 5 in one outing.)
Kristina says that there’s a “feeling” buyers get when they walk into their home.
“I tell them when you find it, you’ll know it. They all do,” she says.
Looking to buy a rental in a city or ski town? Check out these tips.