| BUYING TO RENT |
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When buying a property for the specific purpose of holiday rentals, in order to be able to maximise the rental potential of your intended purchase there are a number of things to consider. Although they may seem obvious, some of the points are often overlooked when presented with a property that has immediate charm. That same property may not have so much charm at a different time of the year. The following points are a clinical guide to what you should be looking for in a property you wish to purchase with a view for rental.
LOCATION AND CLIMATE To be able to achieve the maximum rental potential of your investment property, one of the first things to consider is climate. For example, if you are buying a property for ‘summer rentals’ you will need to purchase in a location that has good weather conditions for as much of the year as possible. It is therefore absolutely no use buying in Siberia. Conversely, if your interests lay in ‘winter rentals’, whether it is for skiing, snowboarding or other similar outdoor pursuit, then you should choose a location that will provide the most suitable and prolonged climatic conditions for that type of vacation.
From a client’s point of view there is nothing worse than renting a vacation property and not getting the weather conditions they were expecting. Adverse weather conditions will make or break a holiday and it would be a big factor affecting the client’s decision as to whether they would return for a future vacation or even bother to recommend it to a friend.
ACCESSIBILITY Make sure that your vacation rental property is easily accessible at all times. Choose a location that is serviced by a number of airlines, if possible, as this can make air fares more competitive (a major consideration for a lot of people). Also, you don’t need a destination which is serviced only by one small airline in the event that they should delete this destination from their agenda or even if the airline ceases trading. As we are all aware this has happened only too often in the past and in some cases without warning.
It is also necessary to consider ease of accessibility from the airport, railway station or ferry terminal. Whereas you may be happy with a two hour drive followed by a five mile hike, very few of your clients will share your sentiments and enthusiasm. A beautiful property far from the madding crowd may seem ideal to you but would it appeal to the average person for a holiday rental.
VIABILITY Research the location. Browse the internet. Compare purchase prices for similar properties in the area. Check to see if the location has good rental potential. Don’t just listen to the vendor or their agent because, naturally, their primary interest is in selling the property. Take a look at what other owners or letting agents are asking for their properties. Is the property a viable purchase for these rental charges? Another point to consider is that you could save a lot of money by buying direct from the owner. This is the fundamental principle advocated by VRP Direct (whether you are renting or buying), dealing directly with the owner and cutting out the cost of the middleman. Don’t jump in at the deep end and simply buy the first property that takes your fancy. We recommend that you visit your chosen location at different times of the year as a holidaymaker. Get to know the area, its people and the surrounding environment. Understand the way it functions as a community. That way you can answer any questions from a potential client with the authority of somebody who knows. What may be a lively and buzzing location in June can be completely different in October. A lot of places are seasonal in catering for holidaymakers; that is to say that many of the shops, stores, restaurants and bars may be closed outside the ‘main season’ which can result in your clients becoming bored after just a few days.
LEGALITY If you are buying in a gated community, urbanization, development or a block of apartments, check whether short-term holiday rentals are permitted or whether the area is zoned for this use. In some places a license may need to be applied for which can take a considerable length of time to acquire. On some urbanizations and complexes, the rules may prohibit such rentals. Restrictions on car parking or the use of communal facilities such as swimming pools, etc. can also make or break a holiday.
It is for these reasons that we at Vacation Rental Properties Direct recommend the use of a local solicitor/lawyer who is independent of the seller or agent. You should tell them exactly what you wish to use the property for so that in addition to all the other enquiries they undertake for you they can also check if there are any of the above restrictions in respect of the property. Correct research, preparation and planning for your purchase could mean the difference between a good investment and a house of cards.
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