Vacation Home Mistakes: 7 Top Things To Think About Before Buying
Today, I’d like to introduce you to one of my friends who’s also a client… Kim Mason. She and her husband Gary are owners of a property management company in the Orlando, Florida, area.
She recently stopped by my office and we had a long conversation about our business goals – both hers and mine. In my effort to give readers a more realistic approach to owning and managing a vacation rental business, I asked Kim if she’d mind sharing some of her expertise with you. She immediately agreed!
THINKING OF BUYING A VACATION HOME, NOT ONLY FOR YOUR OWN RELAXATION BUT ALSO AS AN INVESTMENT?
Some of you may be thinking about buying a vacation home as an investment property. Others may have thought about buying a vacation home for the second time around. Either way, before you buy, consider these property investment tips. And if you have some of your own, please share them with us.
Please give a warm welcome to our guest Kim.
Hey there! My name is Kim Mason. I am a Realtor, Property Manager and Yoga Teacher – Phew! Originally from the United Kingdom, I am so very blessed to be living the American Dream right in the heart of all things Disney!
Does this scenario sound familiar to anyone? You have just returned from the best vacation of your life and you so wish that it had never ended. Maybe you are thinking, “If we had our own vacation home, we could guarantee memorable vacations for years to come, not only for our family but for many other families too!”
Before you take the plunge, let me share some helpful tips about buying a vacation home.
1. Location, location, location
Before buying a vacation home, choose your location carefully. You want your vacation rental to be close to what makes you and your vacationers happy.
Why do property investors choose Orlando when considering buying a vacation rental? Its location!
Orlando has plenty to offer the visitor, but in reality, most families spend most of their vacation hours at the theme parks, so staying in a home that is easily accessible to the parks is very attractive.
Ask yourself, where do people want to go when they’re on vacation? Beaches? Mountains? Theme Parks? Then find a location with one of those attractions.
Remember, too, the more popular the rental community, the more your home will appreciate in value!
2. Buy a vacation rental property below your budget
Although the economy is on the rebound and the building of new vacation homes is on the increase, there are still some excellently priced resale homes.
Don’t fall into the trap of maxing yourself out and then stressing about being able to pay the mortgage. Buy what you can comfortably afford, see how it rents out and then, in the future, maybe sell and upgrade.
3. Don’t overestimate rental income or underestimate your expenses
Do your homework on current nightly rentals in the community where you are considering making your purchase.
Rental income will definitely help offset any expenses such as utilities, property taxes, insurance and home owners association fees, but there may be times you will have to personally add to the property expenses pot of money.
4. Obtain information on any restrictions
Most vacation communities have certain restrictions that you will need to abide by.
For example, home owners associations can have stipulations about what paint you can use on the outside of the home or how you should care for the grounds.
Realize that you may not always have total freedom with your vacation home and plan to work around any restrictions you’re given.
5. Understanding the tax implications
Sorry, guys, but we cannot escape taxes!!
For any home owner, it is very important to look into what your tax implications would be. Bear in mind that you would also need to pay income tax on the rental income you receive.
Your real estate professional will be able to help you find a good tax adviser and accountant.
6. Hire a property manager
When you are investing from a distance, you should have your home managed by competent professionals. Having a property manager on hand takes the stress out of the day-to-day running.
Your manager will ensure all aspects of the home are well maintained, the utilities and taxes are paid, and you and your guests are taken care of.
7. Employ the services of an expert
It’s true that property prices in the Orlando area still represent great value to the investor, but there are some additional expenses that you will have to take into consideration before buying a vacation home.
Hiring a knowledgeable real estate professional who will be able to guide you is paramount to helping you through the whole purchasing and negotiating process.
In general, the economy and the demand for rental properties are on the upswing. For example, 65 million visitors come to Orlando each year, and this number is increasing. If you are in a position to invest in property, then buying a vacation home is a great investment.
It pays to engage the right professionals at the start of your search and keep them with you after you have bought your home. Your real estate agent and property manager will save you a lot of heartache and time when you compare it to trying to do everything yourself.
If you would like further information, please email me at property (at) kimsmason.com or call me at (407)-973-5068. I would be delighted to help in any way I can.
If you would like a free vacation rental investment guide, mention the words “Free Guide” in the comments section, or send us a message here.
Thank you Jay, I am so happy to be a part of this wonderful community and to being able to help people with their real estate needs.
As you know I’ve been struggling with the flu for a couple of weeks now but I’m slowly getting back on track again. I really feel for anyone who has been suffering, its not nice at all!
Wow, can you believe that today Florida has some of its coldest temperatures since 1958! So wherever you are today in the USA, take care and stay warm!
We are glad to have you contributing to the community, thank you for helping us all. So.. in your opinion Kim, where do you think amenities fall in on this list. How important are they when considering to purchase a vacation property? Does it depend?
It really does depend on what families are looking for. Overall in our experience as vacation home renters, families seem to like a home in a community that is close to Disney with their own private pool. They don’t seem to have too much time on their hands for community amenities. By the time they get back from marathon days at the parks its probably all they can do to throw themselves in the pool!
With my Realtor hat on now, a lot of investors that buy second homes to use for themselves only tend to want homes or condo’s in resort style communities. They spend many weeks or months here in the winter time, so it can give them the opportunity to make new friends whilst enjoying the community amenities.
Hope this is helpful.
Good article Kim, great insights about what anyone wanting to purchase a vacation rental should know.
Thank you Maria. Please bear me in mind to assist anyone you know who is looking to make this type of investment.
Free Guide. Thank you for this blog, great information. I would like to learn more to buy a second property outside of the country.
Sorry for not getting back to you sooner, I have been a little under the weather again!
Please take a look at my website and let me know how I can be of help to you – http://www.kimsmason.com
No problem, thank you
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