Buying a vacation property is the perfect way to start or grow your real estate portfolio while also having the luxury of spending more time in a place you love. After all, cottaging is a beloved North American pastime, and there’s nothing quite like enjoying the great outdoors in one of its many lakes. And if you’re more of a city person, there’s always a demand for vacation rentals in urban centers. But before you take the leap, it’s important to keep these four considerations in mind.
- Read: Is Now the Time to Buy a Second Property? Understanding the Current Ontario Cottage Country Climate
1. Evaluating Your Vacation Property
One of the first steps in your journey to buying a vacation rental property is to evaluate its location. Is it situated in a high-demand area? This is a crucial factor that can significantly impact your return on investment. Take the time to conduct thorough research and determine the number of days per year you plan to rent it out.
Additionally, consider how often you plan to use the property: Are you comfortable foregoing some summer long weekends at the cottage to charge a premium price to guests?
2. The Importance of Vacation Rental Management
When renting out to guests, it is essential to decide who will handle the day-to-day bookings. Will you manage this yourself, or will you hire a vacation rental property manager to handle tasks such as cleaning between bookings and assisting guests in accessing the property? After all, renting out a vacation home to guests is a time commitment and you’ll need to be prepared accordingly.
3. Capacity and Design
Before you buy a vacation property, take the time to envision your ideal rental customer. Are you targeting your property to be appealing to large groups of friends, families with young kids, or couples seeking a romantic getaway? Can the space accommodate large gatherings or parties? These questions can help determine the type of property you’re looking for.
Next, evaluate the space to determine its maximum occupancy and how comfortably guests can stay. Are there any potential renovations or redesigns to make the property stand out and appeal to your target demographic? For example, if you’re buying a three-bedroom cottage by the lake, you might want to consider buying two sets of bunk beds to fit in more guests comfortably.
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Considering these factors will help you set appropriate rental rates and guide any necessary decisions when marketing the property to guests.
If you rent your vacation home, you must determine how much a nightly, weekly, or monthly rate will be. Ask yourself:
- What’s the usual number of guests staying in vacation rentals around here?
- How much do similar places charge per night each season?
- Will you charge more in busy times and less when it’s quieter?
- Who else is renting out similar places nearby?
- Are you open to spending money on extras like a hot tub or a new deck to attract more guests and earn more cash?
4. How to Market Your Vacation Rental
In a saturated market, making your vacation rental stand out is essential. Consider targeting specific events, like bachelorette or bachelor parties, and deck out your space with fun themes and photo-ready spots—no need for extravagance, just memorable touches like a unique choice of wallpaper as an accent wall can make a big difference.
Whatever strategy you adopt, the importance of professional photography and engaging descriptions cannot be overstated. These elements are key to ensuring that when guests are searching for bookings, your property stands out, encouraging them to choose it first and return in the future.
When in doubt, talking to a trusted real estate agent can help you navigate buying a vacation rental property. Give us a call today and get the process started!
