It’s Hard Work
Owning vacation home rentals can require some serious elbow grease. You aim to give your temporary guests a little piece of heaven as they reside in your vacation home rentals.
So how do you really know if you are able to give them that piece of heaven? Here, we give you a mini “real estate quiz” that can help you determine if this rental property investment strategy is right for you.
Time to Ask Yourself
Let’s begin! Of the two cases we present, see which one you fall under more. Be honest with yourself! This is just to help you assure if vacation home rentals are for you!
The Right Fit – Part One of Vacation Home Rentals Quiz
A) First things first, you’ve made sure you found your ideal real estate investment property to run as a vacation home rental. You have checked out some of those important numbers that could tell you if you’ve found the most profitable real estate investments.
These numbers include cash on cash return rates, cap rate, and something especially beneficial to you if you go with one of the vacation rental websites, Airbnb: the Airbnb occupancy rate. You may have even used Mashvisor to give you all those numbers, as property analytics is our specialty.
To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here.
Whatever the case, you are confident in the real estate investment property you have chosen and feel it would grow to be a successful vacation home rental.
Check Out These Gems: The 20 Best Places to Buy a Vacation Home in the US at the Beginning of 2018: Part 1
B ) You are not really aware of how the numbers are looking for your investment property. Real estate market research hasn’t really been a part of your process. You may even buy a vacation home blind to the property valuation. There is a lot of uncertainty in this area.
Related: 5 Tips on Researching Investment Properties
Motive – Part Two of the Vacation Home Rentals Quiz
A) You have clear, set goals. You know what you need to accomplish and are ready to do what is asked for. Vacation home rentals are your ultimate focus, and after doing your real estate market research, you know this is the real estate investment strategy you would like to pursue. You set up the main objectives like:
- The period your investment properties will be on the market as vacation home rentals (all year, once a month, a couple of months).
- The financial strategy that will assure your rental income will cover the expenses that come with vacation home rentals.
B ) You like the idea of being a home investor in vacation home rentals, but you’re not sure what it really takes. You know you want to accomplish the goal of a positive cash flow real estate investment, but vacation home rentals won’t match your technique to achieve that goal.
Legal Shenanigans – Part Three to the Vacation Home Rentals Quiz
The laws and regulations of your state, city, or neighborhood all have a hand in your vacation home rentals. This is an extremely important point to not overlook.
A ) You’ve made yourself aware of all things legal. This means you have gone through all the laws and regulations when it comes to renting your investment properties as vacation home rentals. This includes things like:
- Current or Proposed Zoning Laws
- Business Licenses and Permits
- Safety or Health Code Regulations
- Homeowner Association Rules (HOA)
- Sales Tax (you know Uncle Sam has a say in all things cash flow in the United States)
B ) You haven’t really gone over any of the regulations that come with vacation home rentals. You ‘think’ you’ve got all the requirements and are following the rules, but you are not totally sure of all the nitty-gritty details. There may be some laws you overlooked and didn’t really pay much attention to.
Involvement – Part Four of Vacation Home Rentals
A ) You know exactly how involved you want to be. You have a clear decision as to what roles you are playing in your vacation home rentals. This could go two ways.
You are either a “do it yourself” type of real estate investor and want to be as involved as possible in your vacation home rentals. This means you want complete control over who is renting your vacation home rentals while still avoiding the investment property management fees that come with hiring a property management company. You understand all the responsibilities that come with managing vacation home rentals and are ready to tackle them. Some of these tasks include:
- Home advertisement
- Quick responses to inquiries
- Handling reservations
- Collecting/remitting sales tax
- Customer care-handling all concerns or issues of your guests
- Hire service providers like housekeepers, plumbers, electricians
- Scheduling housekeeping between different guest occupancies
- Managing any required maintenance
Related: Real Estate Investing 101: Rental Property Management
Or, you are more of the “I really don’t have that much time on my hands to manage my vacation home rentals” type. An easy solution is to hire some rental property management. Most U.S. real estate markets have property management companies specializing in vacation home rentals.
Whatever your case, you understand what would work best for you. You understand that there is no perfect way to manage vacation home rentals, so the route you take all goes back to how involved you decide to be.
B ) You are not loving the idea of being involved in vacation home rentals, and don’t really care to know what goes into managing vacation home rentals. It takes too much work in your opinion. You can make it work and do all things required, but it will be a serious struggle to juggle all the responsibilities that come with vacation home rentals while being a full-time real estate investor
Learn More: Using Professional Property Management: Pros and Cons
However, you also feel property management companies are just an extra expense but don’t want to manage vacation home rentals yourself either. There is a good amount of uneasiness when it comes to your involvement in vacation home rentals.
Preparation – Part Five of the Vacation Home Rentals Quiz
A ) You are going into this property business with the mentality that an equipped property investment will sell itself. When it comes to the aesthetic of your vacation home rentals, you have found a balance between both your convenience and your guests’. After a good walk through the income property itself, you have removed any of those precious valuables. It is always better to be safe than sorry.
You still have the goal to give your guests a little piece of heaven, so you make sure the vacation home rentals are fit to what they consider “heavenly.” The rental property is ‘target decorated,’ meaning you took into consideration what your guests are here for. Whether it is for business or a vacation, you cater your vacation home rentals to their wants and needs.
B ) The vacation home rentals are all prepped with the basics like plates, towels, tissue, but it’s not in your interest to really go all out with the place. Your main purpose is to just provide your guests with a roof on top of their head for the period of time they are in the area. It’s a pleasure that your guests chose to remain on your property, but giving them a ‘piece of heaven’ isn’t necessarily on your agenda.
Get Your Final Score!
So you’ve gone ahead and decided for yourself which case you fall under. Here are the results. If you answered at least 3 out of the 5 cases with (A), then congratulations! You are more than capable to take on vacation home rentals. You’ve got the mindset, the willpower, and the real estate investment tools to take this investment strategy head-on.
If you found yourself choosing (B) for the majority of the cases, then vacation home rentals may not be your best fit. Every home investor is different, and it seems that vacation home rentals fail to meet the goals you have in mind. That may be why you are not as interested as you may have anticipated being. There are plenty of other real estate investment strategies to pursue in the real estate business. Your best fit is out there!
Finding yourself caught in the middle? The decision isn’t made just yet. See what cases you answered “B” to, and ask yourself whether you are willing to change your work ethic to match “A.” If you are still interested in the idea of owning vacation home rentals, get your research done and come back and answer this quiz!
This real estate quiz is not meant to make the “make it or break it” decision of whether or not you are cut out for vacation home rentals. It can give you a pretty good idea of where you are on the vacation home rentals journey. Act with due diligence. If you need some more confidence in your investment property, don’t hesitate to use Mashvisor for that push. So, are you cut out to own vacation home rentals?
To learn more about how we will help you make faster and smarter real estate investment decisions, click here.
Share your results down below! We want to know your answer to the question “Am I Cut Out to Own Vacation Home Rentals?”