If you are thinking about turning your vacation home into a vacation rental or if you are purchasing an active vacation rental, I thought I would discuss some of the less-than-obvious pitfalls of turning a vacation home into a destination that people will want to rent on vacation.
Not everyone is well suited to be a landlord, let alone a successful one. In some areas, such as Sunriver Resort, there are property management companies which are set-up specifically to manage vacation rentals.
If you are entering this arrangement with another person(s), everyone involved in the purchase of the vacation home must share the same goal. Whatever the goal happens to be, the discussion on how much of the home will be used by the owners and when needs to be settled in advance. Keep in mind, the most desired times for owners to visit the home are in all likelihood the highest demand times for potential renters.
Secondly, if you are hoping that the vacation home will produce income, the destination of your dreams needs to be more global. In other words, you need to be where the action is and with a decent driving distance from your potential renters. A good rule of thumb is three hours from a major metropolitan area. Think about it: a trip lasting longer than three hours in a car begins to take its toll on the driver and the passengers. Proximity is a key factor of a successful vacation rental.
The third on the list of considerations depends on more than just seasonal recreation. The real success stories come when the property offers year-round opportunities. Central Oregon, for example is just that sort of place. Winter and summer activities are plentiful and diverse. Off-season activities in an area like this are also worth considering and will make your vacation home easier to fill year-round. It will also make the occasional off-peak-season usage of the home by you easier and maybe even a bit more enjoyable.
The fourth suggestion is not as easy to decide. It is more of a Goldilocks situation. The home needs to be the right size. If the home is too small, you will exclude a huge subset of families and extended relatives who might want to be under the same roof. If the home is too large, your perception of adequate rental price might be too high to keep the property rented when you are not there. Property Management companies can help you to determine the rental amount that makes sense for both the home and the community. Spend some time with the right broker, such as The Jones Group @ Sunriver Realty to find that housing sweet spot and get introduced to the property management experts.
The house will also need to have numerous amenities but not so many as to make the house hard to use in the short-term. Too many features also increase the chance that your time spent managing the property (i.e. repairs and maintenance) will be higher as well. Even if you are not self-maintaining and repairing, you will be responsible for the costs.
The fifth and by no means the last consideration depends on your personal abilities. If you are not the DIY type, your estimated return on the property will be lower. And even if you are, don’t be persuaded by claims of how much you will make. There is a cost in managing who rents the home: Some renters are courteous and gentle with the property while others are not.
The goal for a vacation home is to relax. If you are spending a great deal of time doing repairs and upkeep, this will eat away at the quality time you are on vacation to experience. But you can reach a healthy balance and achieve your financial goals as well and right now, Central Oregon offers not only good property values but year round enjoyment.
How can we assist you today?
On behalf of The Jones Group @ Sunriver Realty
Nola Horton-Jones, Principal Broker/Realtor | ABR, C-RIS, e-PRO, GREEN, RSPS, CCIM Candidate
Bryce Jones, Broker/Realtor | ABR, CRS, e-PRO, GREEN, GRI, RSPS, SFR
Karen Marcy, Broker/Realtor
The Jones Group @ Sunriver Realty | 57057 Beaver Drive | Sunriver, OR 97707
Mobile: 541-420-3725 | Mobile: 541-420-4018 | Mobile: 503-327-9611 | Fax: 541-593-5123
Licensed in Oregon