15 Tips for Buying Your First Vacation Rental Property

Holly Gould

Consider the risks and rewards of owning investment property.
Thinking about getting into the vacation rental property business? In spite of the challenges presented by COVID-19, tourism real estate has continues to produce many of the world's wealthiest people, so there are plenty of reasons to think that it is a sound investment. 

Experts agree, however, that as with any investment, it's better to be well-versed before diving in with hundreds of thousands of dollars. Here are the things you should consider and investigate.

1. Are You Cut out to Be a Landlord?

Do you know your way around a toolbox? How are you at repairing drywall or unclogging a toilet? Property owners who have one or two homes often partner with a vacation property manager for construction, repair and management needs. For owners who are not tool-handy, putting together a solid team of cleaners, handymen (aka handywomen), and contractors, can save both time and money - very valuable resources these days!

2.  Find the Right Location

The last thing you want is to be stuck with a vacation rental property in an area that is declining rather than stable or picking up steam. A city or locale where the population is growing and a revitalization plan is underway represents a potential investment opportunity.

When choosing a profitable vacation rental property, look for a location with low property taxes, a decent school district, and plenty of amenities, such as parks, malls, restaurants, and movie theaters. In addition, a neighborhood with low crime rates, access to public transportation, and a growing job market may mean a larger pool of potential renters.

3. Factor in Unexpected Costs

It's not just maintenance and upkeep costs that will eat into your vacation rental income. There's always the potential for an emergency to crop up—roof damage from a hurricane, for instance, or burst pipes that destroy a kitchen floor. Plan to set aside 20% to 30% of your rental income for these types of costs so you have a fund to pay for timely repairs.

4. Avoid a Fixer-Upper

It's tempting to look for the house that you can get at a bargain and flip into a vacation rental property. However, if this is your first property, that's probably a bad idea. Unless you have a contractor who does quality work on the cheap—or you're skilled at large-scale home improvements—you likely would pay too much to renovate. Instead, look for a home that is priced below the market and needs only minor repairs.

5. Calculate Operating Expenses

Operating expenses on your new vacation rental property will be between 35% and 80% of your gross operating income. If you charge $1,500 for rent and your expenses come in at $600 per month, you're at 40% for operating expenses. For an even easier calculation, use the 50% rule. If the rent you charge is $2,000 per month, expect to pay $1,000 in total expenses.

6.  Buy a Low-Cost Home

The more expensive the home, the greater your ongoing expenses will be. Holly Gould of Nova Scotia Vacation Home recommends starting with a $150,000 home in an up-and-coming neighborhood. In addition, she advises never to buy the nicest house for sale on the block, ditto for the worst house on the block.

A Final Word

Be realistic in your expectations. As with any investment, rental property isn't going to produce a large monthly paycheck right away, and picking the wrong property could be a catastrophic mistake. For your first rental property, consider working with an experienced partner. Or, rent out your own home for a period to test your proclivity for being a landlord ☺


Partner with Holly Gould of Nova Scotia Vacation Home

As this article states, you don't want just anyone managing your properties. The team led by Holly Gould of Nova Scotia Vacation Home has the integrity and experience to manage all the fine points of vacation property management. Trust Holly and her team for professional cleaning, on-site maintenance, and guest booking, onboarding, and turnover.


Learn more about how we can help you make the most of your rental property investment.

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How to make the most of your vacation rental during downtime

By Holly Gould • 21 Dec, 2020
During peak season, vacation rental owners and managers don’t have to try too hard to keep busy. But what about when the tourists disappear, off-season begins and the calendar is looking a little sparse? You’ve tried an off-season marketing push, but it looks like you won’t get many (if any) more bookings. How can you make the most of this downtime? Rather than just keeping your business ticking over, you can use it to grow, improve, develop – and set yourself up for an even better year. Here are 9 ways to make the most of off-season. 1. Keep in touch with guests Why not use your downtime during off-season to take your customer service up a notch and send a keep in touch email? For upcoming bookings, checking in with guests before their stay makes such a great impression and will likely lead to more reviews. Don’t forget about previous guests, either. Not only does a “Thanks for staying with us” email remind them what a great time they had, it’s a personal touch that could just give them the nudge they need to rebook (or recommend you to friends and family). 2. Start planning for next year’s peak season Peak season passes by in a blur and every day you’ll probably learn something about what you can do better. While it’s all still fresh in your memory, start making plans to improve your set-up for the next uptick in bookings. This could be optimizing your check-in process or setting up your Welcome Pack to make communication with guests just before their stay even easier. 3. Plan and begin renovations, repairs or updates Off-season is the perfect time to make improvements or running repairs to your vacation home. To minimize disruption, it’s best to do these jobs while business is quieter and you have more time without guests. Remember, if you’re planning any large-scale construction or redecorating projects where you won’t be able to accept guests, be sure to block the dates on your calendar so travelers can’t book last-minute stays. 4. Analyze your bookings It’s impossible to underestimate how important it is to look closely at your booking data. It can help you identify trends in your customers – are you appealing to one particular type of traveler? Is your demographic changing? How long are travelers staying on average? How many of your guests are leaving reviews? Having the time to analyze your bookings is a luxury that’s often just not possible during peak season. So make the most of your downtime and hit the spreadsheets! You might be surprised at what insights you discover and the impact they’ll have in the coming year. 5. Reply to reviews Hopefully, you’ll have received some great reviews from recent guests. But have you replied to them? Replying to reviews is an effective way to demonstrate to potential guests that you’re a great communicator. However, finding the time can be challenging. Off-season—when you’re generally less busy day-to-day—is the perfect time to post some replies. And if you’ve received any negative feedback, replying is even more important. 6. Reassess your rates The less hectic weeks during off-season present a great time to evaluate your rates. What’s your revenue looking like? Are you making a comfortable profit? Could you be charging more in peak times? Did you have to reduce your rates in certain weeks to fill your calendar? Whether you’re simply adding a few dollars to cover an annual rise in your rates or your updates are part of a more sophisticated seasonal pricing strategy, off-season is the perfect time to make these changes. Don’t forget to check what the competition is doing to make sure your rates are attractive to browsing travelers year-round. 7. Update your listing Adding new photos, changing your lead image, updating your description… All these modifications will help give your listing a fresh look and feel. If you’ve analyzed recent bookings, now’s the time to action any insights you gained. You might want to update your listing to appeal to your most popular traveler profile. Maybe you’ve seen an uplift in the number of guests traveling for business purposes. If so, make sure your listing highlights the amenities they’ll be looking for: Wi-Fi and ample desk space, for example. 8. Do a year-end review Many businesses tend to conduct a year-end review at the end of the calendar year. But this doesn’t make sense for all industries – and it certainly doesn’t for vacation rentals. The end of peak season is often when you can get most out of a business health-check. Property managers can take advantage by working with their teams to identify strengths and areas for development. Are your processes as efficient as they can be? How are your customer satisfaction levels? Can you deploy your resources to better cover key touchpoints with customers? Ask yourselves these questions while you have the headspace to consider them properly, and you’ll notice the positive effects the following year. 9. Take a vacation yourself! Last—but not least—use your vacation rental downtime to give yourself a break. You spend so much of your time and energy on giving guests a fabulous vacation, it’s easy to forget that you deserve one, too! Taking an off-season trip will mean you come back re-energized and ready for what lies ahead – an even better year. © TripAdvisor

Why you should consider a property manager for your rental property investment?

By Holly Gould • 17 Dec, 2020
Why you should consider a property manager for your rental property investment? Rental properties can be an excellent investment opportunity. If you already invested in rental property or you plan to purchase a property and begin your journey as a landlord, AirBNB, or Vacation Rental Owner, you may wonder what comes next. Once your property is ready to go, it's time to figure out all the nuts and bolts of how to manage your property. There are two main options to consider for managing your rental property — managing your own property vs. hiring a property manager. Choosing one of these options determines how the daily operations of your rental properties are run. What do these daily operations include? Let's take a look at the tasks managing a rental property entails: Advertising your property Determining rental rates Preparing the lease Tenant screening Collecting rent Doing preventative maintenance Making repairs as needed Fielding complaints Moderating issues between tenants Checking in with tenants at least once a quarter Enforcing the lease Evicting a tenant when necessary Finding new tenants when vacancies occur Turnover cleaning - by Professionals! With a list that long, deciding who will take care of these responsibilities is an important decision. Self management may save you money, but property management will save you time and effort, ensuring things get taken care of quickly and professionally.
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