Have you started to develop a significant relationship with one destination for your holidays? If you are spending a large amount of your time, or are considering a move there at retirement, contemplate purchasing a house or property now, before inflation raises prices. Imagine your favorite location, with a reservation always available for you, stocked and decorated just how you like it. Imagine you own that. Imagine you are actually making money from it. That can be how it is for you if you decide to own vacation rental property. What should you consider as you step out into this big investment?
It’s an investment
Though your dreams are at the heart of this, money is what makes the heart work. Maybe you are downsizing your family home as the kids move out, or you have an inheritance, and you want to share it with your family in a tangible way. However you come to have the money for this, wise use of your dollars has to play a huge role in this. If you spend so much on it that you can’t afford to use it, it makes no sense to have it. The good thing is, if you approach it wisely, this is an investment that can bring great financial reward. Look for trends of movement, consider fringe locations, and try to use your imagination to see past flaws that you can fix.
You are responsible for this property, however far away you are. Just like your present home, it will have all of the headaches and costs that come with homeownership, only now it is some distance away. You have the joys of making it yours, decorating it and filling it with memories and laughter. You get to set the schedule for its use and how it is used. You get to choose who else can use it and for how long. You get to reap the rewards of this investment in the future, or you get to pass it on to your family, should you choose. This is your other home, your home away from home.
It’s a business
If you approach it like it is a business, with a business plan you can establish purpose, responsibilities, and actions. Be clear and stick to the plan, and you may be able to avoid some of the heartaches that come with sharing property as a family. Have a plan to pay taxes, maintenance costs, manage renters, cleaning, and more. Have a plan for protecting your investment when it is occupied or vacant. Have a plan for advertising, renting, and reserving your property. Set realistic expectations for your income based on seasonal use and changing rates for the use of your property.
If you approach this property with the right mindset and with great preparation, this could be one of the best decisions you will ever make.