If you’ve come into a little extra money, or you’ve been working hard to put away savings, there’s no doubt you’ve been wondering what the best way is to invest that money. If you’ve never considered a rental investment, now is the time to give it some thought. Not only can it be a great decision from a financial standpoint; it can also provide you with another residence that you can make use of if you choose.
Here’s a look at some of the best reasons to consider a rental investment.
A Lovely Retirement Home Down the Road
One of the top reasons people end up investing in a rental vacation property is that they hope to be able to take advantage of it themselves in their retirement years. While you may still be busy in your career with many years left until you retire, there’s nothing wrong with planning for your future, especially if that includes a restful location to enjoy your golden years.
Enjoy Owning a Second Home Without Having to Absorb All the Costs
If the idea of owning a second home appeals to you but you don’t have the extra income to pay for it, investing in a rental property can make excellent financial sense. Think about it, you’ll have the vacation home available to you to use if you like, but at the same time, your guests are paying the mortgage.
Where you need to be careful is that you don’t block off too much time for your own use, as this will take away from your profits. Ideally, you want the income from the guests to cover all the carrying costs, and a little extra is possible. Experts recommend that you don’t stay in the home for any more than 10% of the year if you don’t want to eat into your profits too much.
Discover a New Destination and Culture
Rather than just staying in random hotels on your vacation each year, when you own a vacation home you get to learn about that destination, its people, the culture, and its history. It’s an immersive experience since you become a home-owner rather than just a guest.
You Will Spend Less on Vacations
For some people, owning a second home is actually a way to make vacations more affordable. Think about it, you won't be paying for a hotel when you're on holiday and, ideally, you'll have enough guests booked year-round that your expenses are virtually nothing. All you will have to pay for is the flights to and from your vacation property.
A Couple of Buying Tips to Keep in Mind
If you do decide that a vacation home is for you, then there are a few tips to keep in mind. First of all, the location should be a huge factor. You want to pick a home that is not just appealing to you but would be appealing to guests as well, says Greg, rental executive at luxuryvillasmalta.com. What this means is that you want to look for places that offer scenic views, are close to towns/attractions/landmarks, offer dining nearby, and aren’t difficult to reach from the airport.
You’ll also have to decide whether you want to put work into the home and purchase a fixer-upper or if you want to get a place that is ready-to-go so there are no nasty surprises in the budget.
Purchasing a rental investment can end up being an excellent financial decision for you, not just right now but for your future and well into your retirement years.