While I have a second home overseas, I’m certainly never going to be featured in “Lifestyles of the Rich and Famous”—even though people may have put me in that category.
How can I afford a luxurious home on a tropical island without a millionaire’s bank account?
Easy. Other people pay me for the privilege of renting it for a week or two. It brings in enough money to pay for itself and line my pocket.
There are a few tricks. One of my mantras in real estate is buy low, rent high. Whether it’s long term or short, you should purchase carefully, and get the best bargain you can. That’s why I love emerging markets where you can buy before everyone else does and see great appreciation.
But, appreciation is just a bonus. What gets me really excited is monthly income. Your home could generate $20,000…$30,000…even $60,000 or more a year.
If you’re looking for a property to rent out, look for features that people on holiday will get excited about. Views, some sort of access to water, and amenities.
Views are important to people who are planning a vacation. And to be clear here, I’m talking about the vacation rental market: the people who are renting for a week or two. These are people who generally work and can afford to splurge on a splash out vacation. They are going to spend the next 50 weeks doing a job they don’t love, so they are willing to spend some money to really live during their one or two weeks.
Water is also important. Whether you have beach access, lake view, a hot tub on the deck, or an amazing master bath with jetted tub, water is important to people—it sells weeks of bookings alone.
Take a plain Jane home and make it extraordinary with amenities and décor.
Amenities: Some of them could come with your home. Others can be added. Like a designer kitchen with every appliance known to man. People love to play—or at least imagine they will play—with cooking on holiday. Maid service is often very affordable in emerging markets. You can also find a local masseuse and cook…who wouldn’t want that? Add on features in your home that you think that people will brag about to their friends.
Decor: The colors and styles you use are important: They will cause people to pause and choose your condos over the myriad of other choices. I’ve lugged bulging suitcases full of eye-catching but inexpensive treats from IKEA and Target, and compliment these bargains with local art. It doesn’t have to be expensive—in fact, I always bargain shop when dressing a vacation rental.
Marketing: Now that you’ve got everything picture perfect, let the world know about it. Obvious sites are HomeAway, VRBO and FlipKey. Stand out from the crowd—photos, videos, and well-crafted descriptions will make people long to stay at your place.
Buy low, rent high by adding amenities and choosing the right decor, and market well…these things all add up to getting a high dollar amount for your property. It’s within reach not only to have people pay your bills, but to provide an income as well.
Remember, you’re buying a residential place to rent out on the global powerhouse vacation industry. With the right place at the right price you can turn a ho-hum home into an income generator.
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