RISMEDIA, October 22, 2010—Lately, you’ve been thinking a lot about investing strategies. You have a small nest egg that needs to grow, but frankly you don’t trust the stock market. And while real estate has been somewhat of a rocky road in recent years, it’s still a solid long-term investment strategy—and clearly we’re in a buyer’s market. But you aren’t really interested in being a landlord. So what can you do?
Christine Karpinski has a suggestion: Purchase a vacation home and rent it out to travelers.
“Vacation homes are almost always a good investment,” says Karpinski, director of Owner Community for HomeAway—one of the world’s leading vacation rental marketplaces—and author of How to Rent Vacation Properties by Owner, 2nd Edition: The Complete Guide to Buy, Manage, Furnish, Rent, Maintain and Advertise Your Vacation Rental Investment.
“First, if you’re looking for a good long-term investment, real estate tends to be a good bet,” she adds. “Second, vacation properties have the ability to pay for themselves, and owners often earn a profit in rental income. Third, the investment comes with the desirable perk of having a place at the beach or in the mountains to call your own. And finally, there has never been a better time to buy a vacation home—it’s like the planets have all lined up perfectly.”
If you are interested in purchasing a vacation home, Karpinski describes why there’s never been a better time to go vacation rental house hunting:
There have never been so many properties on the market. For potential home buyers, there is a silver lining to the slow economy and the housing crisis: Most vacation markets are chock-full of buying opportunities. Once you’ve pinpointed the vacation rental market that is right for you—The coast? The mountains? A ski resort area?—you will likely have a lot of properties to choose from.
Prices aren’t going to get much better. In fact, they’re the lowest they’ve been in five to ten years. If you’re pretty sure you want to buy a vacation home “someday,” you might want to quit procrastinating and pull the trigger, says Karpinski.
Interest rates are very favorable for purchasing. Today, mortgage interest rates are low. Bottom line: Take advantage of them while they last.
You have access to the best real estate professionals. Anyone connected to the housing market who managed to survive the housing crash had to be at the top of his or her game. That means the agents left standing today—including the ones you’ll be working with in your search for the perfect vacation home—are possibly the best of the best.
It’s never been easier to rent your vacation home. As mentioned earlier, vacation home rentals have never been more popular. More and more consumers are choosing to stay in cozy condos, cabins, and chalets instead of cramped, impersonal hotel rooms when they travel. And as market demand has surged, organizations have sprung up to help connect vacation homeowners with these potential renters.
If you buy now, you can be ready for the 2011 peak season. It’s true that the longer you wait to buy, the likelier it is that interest rates could rise. But there’s another reason not to procrastinate: If you buy now, you’ll have time to get your property ready for peak rental season. Experienced vacation homeowners often find that the rental fees generated during the twelve weeks between Memorial Day and Labor Day pay their mortgages for an entire year—and most inquiries come in between January and March.
“Even turnkey properties aren’t really turnkey,” notes Karpinski. “To get your property up to your standards, there will very likely be things you will want to spruce up. Rooms might need repainting. Decorating will need to be done. And the yard might need some work. Buying now will provide you with a cushion of time to get the home ready for your guests, take great photos for your property listing, and start marketing it to potential renters.”
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6 Reasons Why It’s Smart to Buy a Vacation Rental Home Now