Written By: Sharon Walker
Congratulations! You have found yourself in a position to consider the purchase of a vacation home! While this is certainly an exciting time, it can also be a challenging task with so many options and choices that will need to be made. Walker Luxury Vacation Rentals would like to offer you any assistance possible to allow you to make an informed decision, resulting in a vacation rental that is more desirable than the next. Below are the top 10 things we believe you need to consider prior to the purchase.
1. Location, Location, Location – While this may seem self-explanatory and we know you have heard it before, choosing a prime location for a home or office can be very different than choosing a prime location for a hotel, which is how you want to treat this investment. If you are solely focused on Downtown Austin, you will want to try to be within walking distance of main attraction areas like South Congress, Downtown shops, and restaurants or Zilker Park. Another popular location for this purpose is any home on any of the surrounding lakes. While Lake Austin will command a higher nightly rate than Lake LBJ, both are great performers in our portfolio and solid investment locations.
2. In Texas, Bigger is Better – Market data shows that in central Texas there are more bookings for homes that are either very small (1/1) or homes that are large (5+ bedrooms). When anyone asks us what to look for in an investment property our first consideration after location is size. When we are looking for new homes for our portfolio we are seeking 5+ bedrooms and more is almost always better. If you can sleep 16 or more, you are already at a great market advantage simply because there are so few homes (inventory shortage) that can comfortably accommodate large groups.
3. Pool, Hot Tub – Any home with a pool and hot tub will outperform one without. If the home doesn’t already have one this is the #1 upgrade you can make to a potential vacation rental.
4. Wide Open Spaces – One thing to consider is the location of the vacation rental in proximity to other homes. If you host large groups every weekend, the best way to host them is with as little potential for neighbor disturbances as possible. Happy neighbors are always a plus!
5. Wide Open Interior Spaces – Large groups traveling together want to spend time with each other. Offering a large open floor plan with plenty of seating will allow for that. Sometimes removing a wall is necessary to make the flow of a homework better for large groups. Luckily, you and your family will likely enjoy this when you use the home as well.
6. High-End Finishes – The finishes of the home will be displayed in photos and will attract or deter the most discerning groups. If the fixtures, colors or style need to be upgraded, your revenue will reflect that deficiency until you make the upgrades.
7. Annual Revenue – Do you plan to cover your monthly expenses and bank on the appreciation of the home (which is nearly guaranteed in this area) or do you need to create a solid revenue stream on the home? Your revenue requirements for the property are an important consideration and we can let you know anticipated income for most locations, after viewing the home.
8. Monthly Expenses – Just like with any vacation home, you will need to consider the monthly cost of operating this additional property including electricity, supplies, furnishings and linens, HOA fees, pest services, maintenance costs, water, propane, trash services, pool services, yard services, etc.
9. Home Technologies – You will want to invest in services that allow for home automation and control from afar. WLVR is happy to consult you through products we believe are most effective and efficient.
10. Personal Use – One of the hardest things that we know about owning a vacation home (that is also an income property) is allowing yourself to give up the income in order to make personal use of the property. It is always wise to make plans in advance for how many days you plan to personally use the property so you don’t feel guilty for doing so! If you plan to donate the property to charity use or allow friends and extended family to use the property, it is good to set those parameters ahead of time as well.
Last, but certainly not least, you need to choose a vacation rental management company (we know of a great one!) to make sure you maximize revenue in a safe way. If you need additional consultation services when making these decisions, please do not hesitate to reach out to us. We would love to help!