I talk to a lot of people who are considering renting their second home out to vacationers. Some of them already have a home, sitting empty most of the year. When I ask them what holds them back, it’s always a variation of the same theme.
As a real estate investor, I come at if from a different angle. I see real estate as drywall, concrete, and wood. I’ve come into houses with holes in the floor where you could see through to the dirt below, put in an offer, rehabbed it, and walked away with a big profit.
So, I don’t let the fear of someone making a hole in the wall or damaging the floors keep me from nearly $60,000 a year—which is what my vacation rental in Fiji brings in.
”I don’t like the idea of strangers staying in my home.” Is another common concern.
But do you like making money? Well this week alone, I’ve already received payments of US$1,800 and US$2,400. So, I’m willing to keep my place free of personal items that hold sentimental value, and allow people to pay me hotel and resort prices for my residential house. Other than a few broken coffee pots and a rice cooker, all of which the guests have offered to pay for but I’ve declined (considering it the price of doing business), there has been no damage. Since 2005. Nothing has gone missing. Nothing has been looted or pilfered.
I’ll tell you a secret. I get contacted by journalists almost weekly. The query is always, ”Tell me about a bad vacation rental experience you’ve had.” They’ve loaded the question and already figured out the angle before they collect the facts. But don’t fall victim to losing tens of thousands of dollars year after year because the media has you scared.
Do things get damaged? Yes, very occasionally. There is now insurance you can purchase against accidental damage. The larger the house and the number of bedrooms, the greater the risk. A one-bedroom apartment that caters to one couple is going to get far less wear and tear than a five-bedroom home. So, factor that into your decision-making process. Of course, the five-bedroom home will bring in more money, all other things, like location, being the same.
Some people fear the work. ”Won’t I spend all day working on my vacation rental, answering phone calls and emails?”
My workload is less than two hours a week often less than one. Yes, it was more in the beginning. You need to furnish and market your home. You’ll need to hire staff or interview property management companies. Set up listings. If you are the do-it-yourself type of person, expect three months to be up and running—from empty home to photos. That’s an average.
Then you’ll have a higher workload in the next three months as you’ll be tweaking things to get it ”just right.” Someone will ask a question you didn’t think of, and you’ll add it to your listing and website. After six months, you should be fully set and working very minimal hours.
If you like shopping, furnishing your home can be great fun. If not, you can hire someone to do it for you. Marketing, web design, listing portal set ups on HomeAway and VRBO can all be hired out.
Some owners buy the place and hire someone to handle getting the home ready for guests.
Owning a vacation rental that you share with happy travelers is one of the easiest, most fun ways to make money on the planet. In fact, it’s hard to tell people about it with a straight face.
In fact, vacation rentals are hands down the easiest way to get a piece of the travel and tourism pie. Vacation income at residential fees.
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