The benefits to investing in a vacation rental include tapping into a huge potential market, generating extra income, and benefiting from the tax advantages that real estate investors enjoy.
Some of the key factors to consider before buying a vacation rental are location, demand trends and seasonality, rental revenue and operating expenses, and return on investment (ROI).
Vacation rental properties are different from long-term rentals – guest turnover is greater, homes have to be furnished and well-equipped, and local laws or homeowner associations (HOAs) may prohibit short-term vacation rentals.
Sources for finding a vacation rental include networking, real estate agents and traditional listing services, and online marketplaces that specialize in rental property sales.
Benefits of investing in vacation rentals
Extra income
The average annual revenue of short-term vacation rentals posted the highest level ever recorded, at the end of 2021, according to AirDNA, a company that analyzes performance data.
Appreciation
Real estate historically appreciates at a rate faster than inflation, offering both the potential to profit from an increase in equity over the long term and a hedge against inflation. As the National Association of Realtors (NAR) recently reported, the housing market performed better in 2021 than in the previous 15 years, even in the middle of a pandemic.
Flexible use
Unlike a long-term rental occupied by a tenant on a 12-month lease, a vacation rental is typically leased for 30 days or less. Tenants may include couples looking for a weekend getaway, families on vacation, or business travelers in town for a few weekdays.
Recession-resistant
Vacation rentals in domestic leisure destinations historically perform well during recessions for several reasons. Drive-to leisure markets near major metros benefit as vacationers opt for more affordable family travel and also offer a budget-friendly alternative for domestic travel over international travel during a recession.
When hiring a professional property manager, such us Caribbean Beach Properties, you should find out about their experience in the area. In the same way, you should find out about the price it charges for its services, what services it makes available to you and if it will be in charge of promoting your home.
CBP Mexico is your best option! We are a Professional Property Management Firm in Cozumel, Playa Del Carmen & Tulum. With concierge services, house-keeping and maintenance, rental promotion, marketing and even billing and legal assistance. We take the headache away from owning and managing your property.