Buying a Vacation Rental Property on Oahu, Hawaii – Part 3
Answers to frequently asked questions from current and prospective vacation rental owners about buying vacation real estate.……. Continued
According to a series of articles written by a community editor at “Community from HomeAway” an online organization that deals with optimizing your vacation rental business, the following points were made:
#Q: How do I decide where to buy within a given market?
A: Once you settle on an area for your second (or third or fourth home) you have to brainstorm all of the reasons why travelers vacation in that market. If there are certain major attractions, you don’t want to purchase a home that is far away or inconvenient to these attractions. For example, if you want to buy a cabin in the Gatlinburg or Pigeon Forge area of Tennessee, you’ll probably want to factor in the distance to Dollywood and to the main streets when searching for a potential cabin rental property.
Your options will obviously also be limited by your budget. As with most real estate decisions, the best investments tend to be in the best locations-and tend to come with a higher price tag. Your challenge will be to weigh your personal needs and wants versus your rental expectations. Research the prices of others homes in the area to make sure the location is right for your budget.
#Q: What amenities should I look for in a potential vacation rental?
A: The must-have amenities largely vary by region. If your home is in an area where most rental properties include a hot tub, then that is something you need to factor in. This is common in the northeast and in other cool mountain areas like Gatlinburg, Tenn. You also have to look at what renters are looking for or what they’re able to get. For example, in markets like Orlando, a majority of vacation properties come equipped with game rooms to attract families. This might not be a priority for your family but once travelers see it is common in the market, they might not settle on a house without one. This is something to consider so that you can stay competitive in the market. Lastly, remember your price range. If a home with a pool or hot tub is simply not in your budget, you may have to buy a property without the must-have amenities and then price your home accordingly to attract a different group of renters.
#Q: What is the ideal number of bedrooms and bathrooms?
A: The “ideal” property size depends on the vacation market and the types of traveler groups that frequent the area. For example, in a market like Las Vegas that tends to attract couples, a smaller home or condo rental in a prime location might be ideal. However, in an area like Orlando that draws families with kids or even two or more families traveling together, a larger home with extra beds/bedrooms and a game room might attract more renters. You also want to consider the size of other homes in your area. If the market is saturated with 3 bedroom homes, you might consider a smaller or larger size to give you a competitive advantage over other homes in your area. While you want to cater to the majority of renters coming to your area, there is a lot to say for providing a niche that isn’t already available in your location.
#Q: How important is a view?
A: For many vacation home buyers, the view is an amenity in itself and an important piece of the puzzle. The key is to consider how it will affect your renters. A home with a view will cost more, but you can also charge higher rental rates. On the flip side, a home with no view will cost less, but you won’t be able to charge as much as a home with a view. Therefore, consider the types of renters your home and location will attract. Will they be more price conscious, or are they looking for a more upscale experience?
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