There are several factors to consider before buying an investment property. This is especially true when you want to buy property that can be used for short-term vacation rentals. These factors will influence which properties will be the most lucrative for you, so it’s important to do your research. This guide can help you get started.
1. Study the Market
Before looking at specific properties, take the time to study the market. Talk to professionals in the area and network with other investors to learn more about each community.
Your goal will be to look for signs of growth that will potentially drive up the rent in Ormond Beach, FL. You’ll want to know that the rental rates will rise along with the cost of living in that area.
2. Know What Type of Ormond Beach, Florida Vacation Rental Is Right for You
You should decide ahead of time on the type of investment property you want as your first choice. While a condo may seem like a good option, keep in mind that there may be
condo board restrictions that may affect how you try to lease the unit. Other investment options include townhomes, single-family residences, and bungalows.
3. Consider Your Expenses
As you plan to buy an Ormond Beach, Florida, vacation rental, think about what it will cost to get the unit ready for a renter. Some of these expenses will include HOA or condo dues or fees. You should also take into account your mortgage and interest. Don’t forget the costs associated with updating or repairing the property.
All of these expenses should be totaled and subtracted from the rent amount to give you an estimate of your potential profit. If you end up with a negative number, you may need to keep looking. You want a property that will cost you the least while netting you the most possible rent. Otherwise, you’ll lose money each month.
4. Find Your Contractors
You’ll save time and money if you know which remodeling crew, electrician, plumber, and other contractors you’ll use. Trying to do this type of work on your own will likely cost you more than you planned and put your investment in the red. Finding good contractors ahead of time is also a worthwhile investment.
If you’re not familiar with a vacation area, take the time to get acquainted with it so you can verify that you’re investing in a popular vacation spot. Doing your due diligence will ensure that you invest in a property that will earn you passive income for many years to come.