A vacation rental is a type of residential rental property that the property owner rents to tenants on a short-term basis, usually when the tenants are vacationing. Vacation rental properties differ from other types of residential rental properties because they’re short-term rentals, meaning that tenants rent them for no more than six months, although different areas have stricter rules.
This requires you to do some research before you invest in a vacation rental (as all investments do), but there are many good reasons why you should invest in a vacation rental property.
Vacation rentals are very profitable properties, and many people who have invested in them (who are not real estate professionals) have been able to earn passive income from their investment. The key is to find a rental property that’s located in a city/town that has a lot of tourist activity throughout the year, and you also have to know how to market your property.
Again, many cities have strict laws against vacation rentals (and unfortunately a lot of these cities are popular travel destinations), but it is possible to find great rental properties in popular tourist areas that allow for short-term rentals. Once you do this, you’ll be able to pay off your real estate loan and earn a steady stream of income.
Many cities will also allow you to stay in your own vacation rental property a few times out of the year, even if its main purpose is to be rented to tenants. In New York City, you’re actually allowed to be present in your rental property while renting to tenants— and you’re required to be on the property if you’re renting to tenants for less than 30 days.
If you don’t mind sharing your vacation home in N.Y.C. with a tenant, then this is a great option that will allow you to enjoy your vacation rental and earn money from renting it out.
Once you’ve invested in any type of rental property, you’re the property owner/landlord. This means that all of the responsibilities of a landlord fall on your shoulders, and this can get pretty overwhelming— especially if your rental property isn’t located near your primary residence.
Fortunately, you can hire a property management company to take care of your property for you. This way, you can continue to focus on your primary job, family, whatever requires your attention first. Hiring a property management company is something that a lot of real estate investors choose to do, especially if they own more than one property.
Beach homes are probably the first type of property that comes to mind when people hear “vacation home”. These types of properties are popular all year long and see many visitors, especially those who don’t live near or get to visit beaches often. Timeshares are also very popular choices when looking to invest in vacation rentals. However, it’s important to go into the technical details with timeshares. For example, learning how to forfeit a timeshare is essential so you don’t incur unnecessary expenses in the future if the occasion arises.
Another popular type of vacation home is a villa. These homes are more upscale and they’re reminiscent of the Roman period. Villas are usually found along beaches but can be located in other areas as well. These types of properties usually have pools too, which is a popular amenity that tends to catch the eye of those looking for vacation homes to rent.
Cabins and cottages are small homes made out of wood, and they’re usually located in the woods or in the mountains. These types of properties are just as popular as beach homes, as many people enjoy vacationing at the beach and in the snowy mountains. Rental cabins and cottages are perfect for guests looking to get away from the busyness of larger cities.
There are several other types of vacation rentals, such as condos, townhomes, studios, and regular homes. As long as it’s not being rented for more than six months (generally), it can be considered a vacation rental.