A vacation rental can be a great source of passive income, allowing you to make money with minimal effort. You can also enjoy staying in your vacation home when it isn’t in use—another great perk! That said, it takes time, effort, and money to find and set up a vacation home. You don’t want to skimp on the process and risk ending up with a property that’s a dud. This guide from The Traveloid provides some beginner’s tips for buying a vacation home.
Find the Perfect Vacation Home
The first step when scoping out vacation homes is finding the perfect location. You want to pick a place that’s attractive to visitors—for instance, it might be near a beach or a tourist attraction of note. According to Holiday Cottage Mortgages, popular spots for holiday homes in the United Kingdom include Yorkshire, which has many historic towns, and Cornwall, which is home to more than 300 beaches. Once you have the location narrowed down, consider what characteristics make for a great location home, such as a full kitchen, terrace, or hot tub.
Get Your Finances in Order
A house is a major investment. Odds are you’ll need to take out a loan to fund your vacation home. Get the proper documentation in order, such as bank statements, tax returns, and recent payslips. If you don’t want to take out a huge loan, you can buy a house more affordably by getting it “as is.” This means you get the property in its exact condition and can’t request the seller to make any fixes. If you go this route, do your due diligence. This includes examining local land records for red flags and scheduling a property inspection.
Spruce Up the Property to Make it More Marketable
Odds are that your house won’t be in perfect condition when you get it. Some small fixes and upgrades can make it more habitable and more marketable. Start by taking care of essential repairs, like replacing old windows and fixing a leaky roof. You can then move on to aesthetic touches, like adding a fresh coat of paint. Also consider assets that make a vacation home more attractive, like luxury appliances. Once the property is ready, make sure to take professional-grade photos to show it off and attract top clientele.
Decide Whether You Will Manage the Property or Not
While you might spend some time in your vacation home, odds are you’ll mostly want to rent it out for money. While this can be a great source of income, it requires a lot of work. For example, you need to market the property, screen potential renters, get them settled in the house, and then clean up after they’ve left. Sounds like a lot of work! If you don’t want to do this all yourself, you can hire a professional to handle it. A property management company can take care of everything from maintenance to finding renters.
Alternatively, if you decide that flipping houses and/or managing properties is right for you, you might want to start your own business. If so, you’ll need to choose a business structure. A limited liability company is an obvious choice because it offers certain tax benefits and legal protections. Also, this handy guide on how to start an LLC takes out the guesswork and helps you make sure you’ve ticked all the boxes.
Take Steps to Reduce Overhead Costs
Paying the fees for a property management company is usually well worth it, give the headache it spares you. However, you want to otherwise reduce your overhead costs for your holiday home as much as possible. Look for ways to save. For example, you might install water-saving toilets and appliances to reduce utilities. You can also save on heating by adding double-paned windows and insulation. Homeowners insurance is another big expense. ABI reveals that you can help reduce it with tricks like installing a security system.
Buying a vacation home for the first time is an exciting milestone. However, take your time when making this move. After all, you want to get it right! The above guide provides some tips to help.
Featured image by Beata Mitręga