Top 3 Items to Consider When Buying a Vacation Rental Home

Posted At : May 13, 2010 8:34 AM
Related Categories: Industry Musings

You've made your decision; you are going to buy a vacation rental home - congratulations! You've decided that you'll buy a place that appeals to your own preferences as you'll be spending as much leisure time as possible there.

However, you also want to appeal to the rental market, since you want to rent it out when you are not using it to help pay for some of the operating costs.

Having already looked around at some real estate opportunities, you may still be somewhat uncertain of what property qualities are most attractive to guests looking to reserve a vacation rental home.

We've narrowed the list down to top 3 things to consider when buying a vacation rental home:

Location
Amenities
Size

1. Location of the Vacation Rental Home

You've decided on the location of the destination or resort, and now you are considering different homes in different areas of the destination.

The closer the property is to the destination's main attraction, for example, the mountain and ski lifts or the beach, the more likely it will be more expensive. However, keep in mind, vacation rentals in close proximity to the main attraction are typically more desirable and more in demand by guests. Most times owners may be able to charge a reasonably higher rental rate than those properties in less desirable areas.

Of course you will also want to consider your own budget and vacation preferences.

2. Vacation Rental Home Amenities

The number of property amenities depends upon what is the norm in that particular destination. For example private hot-tubs may be prevalent in most vacation homes. If that's the case, then it would be to your advantage to buy a property with a hot tub (or add one), as it is somewhat expected by guests coming to that destination.

If your property doesn't have a hot-tub, then you need to adjust your nightly rental rate accordingly. You may also experience less bookings as your place is somewhat less desirable.

Overall, the more attractive amenities you have to offer prospective guests, the more competitive your vacation rental is and the more likely you will enjoy higher occupancy rates, providing that your rental rate is reasonable.

3. Size Category of the Vacation Rental Home

Most vacation rental homes appeal to larger groups that may not fit (or may not want to fit) in multiple hotel rooms.

Once again, the ideal home size will also depend upon the destination and its visitors. If it's a family oriented destination, larger homes would be the norm, vs. an adult destination, where smaller condos would be more desirable.

Typically two-bedroom vacation rentals accommodate medium-sized families or smaller families with an additional caregiver like a grandparent. In general, they appeal to the largest number of Guests.

One bedroom vacation rentals can sometimes be more difficult to rent out if there are many competing hotels nearby.