Vacation Rental as Supplemental Income: Is It Right for You?
Vacation rentals have increased dramatically in popularity as a passive income source in recent years, as more and more peopler recognize the dramatic potential for supplemental income they represent. If you are considering investing in your own vacation rental property, but you're still on the fence, we have the answers to some FAQs to help you decide if it's the right next move for you.
In order to have a successful experience creating supplemental or passive income from your vacation rental, there are a few things to keep in mind.
Understand the Total Investment
To have a lucrative vacation rental business, begin with a clear understanding of the investment. In addition to the cost of purchasing, pay attention to the renovation and furnishing expenses that will be required to transform the property you are considering into a vacation rental that attracts your ideal guests.
Investing in high quality furniture and renovations upfront will save you money in the long run, so make sure not to skimp on these things. Other costs you should factor in include:
- Property management fees (unless you plan to manage it yourself)
- Housekeeping and lawn maintenance
- Consumable supplies
- Photography for the online listing
- Seasonal maintenance
Choose the Right Location
Another key to running a successful vacation rental business is choosing your location wisely. Look for somewhere that has a steady demand from tourism, ideally throughout the year. Other factors that are associated with a successful location include:
- Access to a major airport within a reasonable driving distance
- Various things to do in the area, appealing to a wide range of ages and interests
- High demand for rentals without an oversaturated supply
Decide How Hands-On You Want to Be
While owning a vacation rental can be a passive source of income, it is not inherently passive. Decide how much time and energy you are prepared to spend on the daily management of the property. Take into account where you live full time and how close it is to your property, as well as how flexible your schedule is to be on call to handle issues your guests may have.
If you are looking for a truly hands-off experience, consider hiring a full service property manager, who can handle booking, guest complaints and requests, housekeeping, scheduling of seasonal maintenance, and more.
Consider How the Property Will Be Used
One of the great benefits of owning a vacation rental is the flexibility to use it however you prefer. You can decide how many days of the year you'd like to list it for guests, reserving it for personal use any time of the year. You can also determine to sell or renovate at any time, or use the property as a vacation rental to pay for itself until you plan to move into the property for retirement or relocation.
The options are virtually endless; as you consider how a vacation rental property may benefit your life, it will begin to make sense that this is one of the most popular investments in recent years.
To learn more about investing in a property in Canmore that you can transform into a source of income, contact us any time.