DANIA BEACH, Fla., September 26, 2017 (Newswire.com) - We all need to get away from our daily life sometimes. Life gets hectic for the modern person, and you need a vacation. How can you use this to your advantage as a savvy investor?
You can invest in seasonal rentals and Florida vacation home rentals and earn $100 to $1K per month. This investment will give you a vacation home to escape to, and you can make extra money by renting it out on a temporary basis when you are not on vacation.
What You Need to Know Before Investing in Seasonal Rentals
Seasonal rentals, even Florida vacation home rentals, function differently than regular rental properties. You will not be leasing the property to an individual who intends to live at that property semi-permanently or permanently. By their very nature, seasonal rentals and Florida vacation home rentals are intended to be used for temporary getaways for and short-term vacations that allow you to escape your daily life and stresses. Individuals are willing to pay a fair amount to be able to stay at a great place on their vacation, which will allow you to earn $100 to $1k per month.
Benefits and Drawbacks of Seasonal Rentals
The nature of vacation rentals means that you could potentially have a lot of turnover with respect to your renters. It also means that you will have to market seasonal rental properties and Florida vacation home rental properties more frequently and aggressively than "regular" rental properties.
However, given the benefits of owning a vacation rental property, including earning $100 to $1k per month in rent and having access to your own vacation home in the Sunshine State, make this an investment strategy worth considering.
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Setting the Rent Rates for Seasonal Rentals
When establishing the rental rates for your seasonal rental properties or Florida vacation home rental properties, you have to account for various costs, including those associated with the property's insurance, maintenance, utilities, security, and marketing.
Marketing is a particularly important expense to consider. A single listing on a website for your property might cost $300. That is just one listing, and you would be wise to consider advertising on more than one website. This exponentially increases the number of potential renters you reach, but it also exponentially increases the amount of money that you will have to pay to advertise your seasonal rental property or Florida vacation home rental property.
Advertising is important because it brings attention to your rental property. When you are marketing seasonal rentals and Florida vacation home rentals, you need to also be aware of the stiff competition that corporations in the hospitality industry pose. If you offer seasonal rentals and Florida vacation home rentals, you have to compete with the hotel industry which, in Florida, is robust and well established. A great Web listing can make your rental properties more competitive and could appeal to potential renters who are looking for a more personal, less institutional and impersonal, vacation experience.
Why Should You Invest in Seasonal Rentals
Just like with any other real estate investment, when you invest in seasonal rentals and Florida vacation home rentals, you are investing in your current life by bringing in income. And, just like with other types of rental property investments, when you invest in seasonal rentals and Florida vacation home rentals, you are also investing in your future. Consider these three scenarios.
- This property can be your retirement home. If you buy a great property during a buyer's market, you can defray part of your costs before moving in. Tax laws are also on your side, if you intelligently use this property. The tax laws allow you to occupy a rental property yourself for at least 14 days a year and still have the government subsidize your loss if rent does not cover your expenses.
- If you are moving from a resort area or tourist destination and cannot sell the property except at a lower than desired price, you can use the property as a rental. It could be more profitable to rent the property on a limited, short-term lease basis to vacationers and tourists. This could net you more income than the alternative, a lower than desired one-year lease to a more permanent renter. A vacation rental can earn $100 to $1k per month.
- You are an investor who wants to take a gamble that local property values will revive, and you want to act before developers undercut you and your potential to create revenue by overbuilding condominiums and golf communities.
Making Money in the Long Term with Your Seasonal Rentals
Be a patient, smart investor. Seasonal rentals and Florida vacation home rentals can earn $100 to $1k per month, but you have to be patient and able to tolerate some potential occasional economic insecurity.
One benefit of investing in vacation rentals is that these can be used year-round. There is not just one "tourist" or "vacation" season in Florida. You can take advantage of the fact that there are many things that draw a wide range of individuals to the Sunshine State. These include family vacations to various theme parks, romantic getaways for couples who want to reconnect, and the ever-popular college Spring Break. These are individuals who will not object to paying a fair amount to rent a good vacation home, allowing you to earn $100 to $1k per month from your investment. Understanding how to market to and tap into these potential markets will help you make the most from your investment in seasonal rentals and Florida vacation home rentals.
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Five Tips and Hints for Investing in Seasonal Rentals
1. The property's annual returns can go negative. Vacation homeowners are faced with potential negatives that "regular" landlords and property owners are not. A negative annual return is especially likely if the property experiences a down year for bookings, if the property requires a major repair, or if other factors cut into the investor's ability to earn $100 to $1k per month in rent.
However, you can be proactive and avoid negative outcomes. Before you purchase a seasonal rental property, analyze the monthly bills associated with the property. Understand the total amount that you might be responsible for paying, even if the seasonal rental does not bring in any income. Calculate these expenses, and compare them with the property's potential to earn $100 to $1k per month.
Additionally, you must research the average nightly rates that comparable seasonal rentals and Florida vacation home rentals charge, as well as the average number of nights a comparable property would be occupied. This allows you to estimate, at least very roughly, the amount of income your seasonal rental would bring in; you can easily earn $100 to $1k per month per rental property. This could help you estimate the positive cash flow.
Also, your seasonal rental property's potential for income is dependent on national and international events, including both man-made and natural disasters. It is common to earn $100 to $1k per month, but these estimates are subject to outside influence. Terrorist attacks, economic instability, and hurricanes can all impact the amount of time, money, and freedom prospective renters will have to lease your seasonal rentals and Florida vacation home rentals.
2. You might not be able to visit the seasonal rental property or Florida vacation home rental property as often as you would like. You might think that you will travel to your vacation home in Orlando and see the various theme parks or stay at your vacation home in Miami and check out the beach during the winter, but various family and job obligations might prevent such much-wanted getaways. By keeping the property available as a rental and earning $100 to $1k per month on the property while you are not using it, you will be able pay off the property's mortgage, even if you are not the individual vacationing there.
3. You need to be prepared to cover repairs. According to the National Realtors Association, you should budget to spend 1.5% of the cost of a property to be spent on repairs and general property upkeep every year. The funds for the repair budget should ideally come out of the rent you charge, estimated to earn $100 to $1k per month. If you choose to use this property as a seasonal rental or Florida vacation home rental, you might have to budget more than 1.5%. Guests might not treat a short-term vacation rental with as much respect as they would their long-term housing.
If you are concerned about a renter not treating the property well, you can be more selective about to whom you rent. Also, you could factor additional upkeep costs into the rent that you charge.
4. Homeowner association dues always go up. If you purchase a seasonal rental property or Florida vacation home rental property in a community that has a homeowner association, you have to contend with that group's rules, regulations, and, of course, the rate that they charge for membership. It is rare and very unlikely for a homeowner association to reduce its monthly or quarterly dues. To offset this cost, you could factor these fees into the rent that you charge, and should not significantly undercut your ability to earn $100 to $1k per month in rent.
5. Vacation homes do not always increase in value, and seasonal rentals and Florida vacation home rentals are not a surefire moneymaker. When real estate investors get scared by various man-made and natural disasters, they are likely to sell their investment properties. This was the case during the economic downturn of 2008 and 2009.
Many investors sold their properties, and a lot of vacation homes flooded the market. This caused the houses' prices to plummet. In this market, you can earn $100 to $1k per month, but not as easily as in a healthier market. Other individuals who were interested in selling their vacation homes were unable to sell these properties for anywhere near the price for which they were purchased. In turn, this caused many houses to go into foreclosure, and some houses were sold as short sales.
If you can weather the uncertainty of an economic downturn and delay selling, you will have a better chance to make a profit—or at least break even. The longer you own a rental property, the better your chance of making money from it. Take time to do research, and purchase the best property for your budget and your future plans.
Are You Ready to Make a Great Investment in Seasonal Rentals?
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Investing in seasonal rentals and Florida vacation home rentals involves patience, but the result—the potential to earn $100 to $1k per month on a property—could be worth it. Check out vacation homes in the Sunshine State today.
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