• Home
    • Uncategorized
    • What to Look For when Shopping for a Vacation Rental Investment Property

    What to Look For when Shopping for a Vacation Rental Investment Property

    Shopping for a vacation rental investment property is a business transaction and is quite different than shopping for a full-time residence home. First time investors do not always know what to look for and what questions to ask when searching for a property that they want to use to generate passive income or provide a free-vacation home.

    Below is a list of questions to ask yourself (and your real estate agent!) while viewing potential investment properties.

    • Does this property cash flow? Cash flow is a term used with investment properties to describe whether the property produces revenue. A real estate agent will be able to take a list of the expenses associated with the property and subtract those from the rents the property can expect. It’s simply property revenue – expenses = a cash flowing or non-cash flowing Not all properties cash flow and it is important to know which ones do and which ones don’t!
    • Does the HOA have rental restrictions? Not all communities and condo complexes are open to short-term rentals. Even if they are, some have restrictions that owners must follow while renting. It is always best to know before hand what these restrictions are. Is a minimum night stay required? Is there a minimum age that renters must be? Are renters allowed the have pets? Can you do a VRBO? This is a list that goes on and on. Check with your real estate agent to ensure that the restrictions are not stricter, or more lenient, than what you would want.
    • Has the building shown an increase in price? Check with your real estate agent to see if the building has increased in price the last few years. Use this information to determine if purchasing this investment property will lead to a return if you ever decide to sell.

    For more commonly asked investment questions, call The Kim and Brian Team at RE/MAX Paradise! They can be reached at (251) 223-5857. You can also visit them on the web at TheKimAndBrianTeam.com.

    Trackback from your site.

    Leave a Reply