The Top Mistakes Investors Make With Their First Vacation Property

Buying a vacation rental property can be a smart choice to maximize profitability, but it requires a steep learning curve. First-timers need to know how to do the right research before investing in order to profit from short-term rental ventures. If you're new to vacation rental investing, you're going to want to learn from some of the most easily made mistakes in the business.

Poor Location Choice

The location with the most affordable properties typically won't be the top spot for vacationers to stay. In order to get plenty of tenants in your rental, you will want to research where guests want to stay. View popular competitor listings to get a good initial idea of where your target market is renting. Learn the local tourism patterns and hot spots where there are lots of amenities. Find out where the laws are the most friendly to short-term rental investors. Choose a property that can accommodate the needs of tourists well. Choosing the wrong location can easily keep tenants far away from you, costing your ROI severely.

Bare Minimum Furnishings

Vacation rentals are supposed to be a safe, comfortable, and relaxing sanctuary for families and travelers to unwind after a long day. If all they have is a bed and a couch, they won't be able to enjoy their trip to the fullest. They're more likely to opt for accommodations that meet their needs.

Make sure you don't cut corners when furnishing the place. Include plenty of cooking and dining supplies. Add extra towels and blankets to the closet. Ensure the couch is big enough for a large family or small gathering. Add outdoor furniture, a work desk, wardrobes, and other pieces that make their vacation rental feel more like home.

Decorate the space with thematic artwork and artificial flower bouquets. String up porch lighting for some enchanting nighttime relaxation. Go above and beyond with decor. You can support local furniture suppliers and often snag some great deals for entire rooms. I found custom furniture near me with some excellent styles perfect for vacation rentals. Tenants will remember lodging that truly meets their needs and then some.

Underestimating Costs

When you invest in a vacation rental, it's far more than just a property purchase and flip. You'll likely need to pay substantial property taxes, insurance premiums, more frequent cleaning fees after revolving tenants, and prepare for the off-season vacancies. If you only calculate potential rental income during the busiest travel season, you may end up with more costs than you can handle. Be conservative with your rental income estimates and very liberal with maintenance costs. Get creative with ways to fill vacancies during the slower seasons, but prepare for empty rooms nonetheless.

Insufficient Hospitality

Vacation renters love being catered to. If you don't respond to maintenance requests, don't properly clean the rooms, or cause guests to miss amenities, they're unlikely to choose your property next time. They may even leave poor reviews, which will deter more guests from renting from you. A poor guest experience will kill your rental income. Clean up before guests arrive. Always be helpful and communicative. Go above and beyond with extras like welcome gifts or mints on the pillow.

Ignoring Tenant Feedback

No one likes receiving a bad review, but they may offer a valuable lesson. If tenants alert you to an issue or concern they had with the rental or their property, you'll want to pay attention. Address the issues they had to make the guest experience better for future tenants. The happier your tenants, the more rental income you'll make. Not every review will be helpful, but you can learn a lot about what guests prefer through a bad review. Don't be afraid of feedback. Encouraging it can even help boost your marketing efforts.

Delayed Upkeep

It's tempting to delay maintenance on your property until something goes wrong. While this may seem like a cost-effective move, waiting until disaster strikes your property guarantees the cost of repairs will go up significantly. Investing in routine maintenance to prevent issues from occurring is a much better way to lower your property’s overall expenses.

You also want to provide a safe and enjoyable experience for your tenants. You could end up in financial or legal trouble if you're behind on upkeep. Keep the place clean and in working order. Address maintenance issues as soon as possible. Hire contractors to maintain the roof, windows, appliances, plumbing, electric, and AC systems as needed.

Unfamiliarity With Local Rental Laws

Not all areas are friendly to real estate investors, especially vacation rental properties. Some neighborhoods or cities have laws or limits on what you can do with a short-term rental. You may need certain permits for specific types of properties. If you don't do your homework when it comes to the laws and limits for vacation rentals in the area, you could end up with costly fees and a lot of sunk costs in a property you may not be able to use as intended. Ensure local laws and taxes are conducive to your goals with the property before signing on the dotted line.

Not Preparing for the Off-Season

Every location has a slower season where your property will see fewer tenants. Even if you change your marketing plan to appeal to different types of travelers or renters, you're still going to want to prepare for vacancies regularly during off-seasons. Not calculating the drop in rental income during this time period can majorly affect your ROI. You can use the off-season to your advantage to tackle any major repairs or renovations the property needs. Research what to expect during slower seasons and prepare yourself financially for this eventuality.

Conclusion

If you're new to investing in real estate, especially when it comes to vacation properties, you're going to want to know how to market to travelers and learn local laws and regulations for short-term rentals first. You'll also need to know how to manage your property during the off-season to maximize your ROI. It's easy to make a mistake when it comes to finding and managing a vacation rental property. Do your research and connect with the right professionals to boost your profits and guest satisfaction rates all at once.

Additional Find Rentals Articles

Oc Bikefest
September - Ocean City Maryland

Blue Ridge Mountains North Carolina Guide
Blue Ridge Mountains and High Country North Carolina Travel Guide

Tortuga Musical Festival
April - Fort Lauderdale Florida