Buying a vacation property is a great way to generate income and maximize the return on your home investment. As a result, more investors are looking to buy a vacation home in Orlando.
The vacation rental market is estimated to increase to $170 billion in the next couple of years, and smart home buyers are taking advantage of this opportunity.
But buying property can lead to costly mistakes if you don’t know what you’re doing. The following are 5 essential steps to buying your vacation property.
1. Establish Your Vacation Property Goals
Home buyers want to earn additional income when purchasing and renting out a vacation property. But you achieve greater success by establishing specific goals early on.
When you know your target income, you can determine if you’re on track to achieve that goal and identify factors that may be getting in the way of your success.
The right goals direct the decisions you make as you look for, select, and market your vacation property.
2. Know the Property’s Value
Knowing a property’s value helps you determine the right purchase price and the potential profits you can gain.
There are many resources online that let buyers learn more about available properties and determine their value. Bankrate’s Statewide Home Values tool lets you research properties throughout the state.
Home Value Estimator combines results from multiple sources to determine the right purchase price. This helps you avoid properties that are overpriced while identifying those selling for less than their market value.
Factors such as location, privacy, and security can impact its value in the eyes of your target market.
3. Identify Long-Term Costs
There are many expenses that impact the profitability of your property. Vacation rentals require ongoing maintenance to enhance its value and prevent costly issues down the line.
Foundation, plumbing, and other repairs will be required. Appliances can stop working, and your home’s interior and exterior will need to be touched up due to normal wear and tear.
The costs related to these and other issues can add up and reduce the profits you earn from your vacation property.
4. Know the Risks
Understanding the risks involved in buying and renting out a vacation property helps you avoid unwanted losses. The following are some of the risks that vacation property owners often face:
● Lack of renters
● Property damage caused by guests
● Legal expenses
● Natural disasters
Knowing the risks helps you manage those risks and minimize their costs over time. Having the right rental agreement, insurance, and other risk-management strategies in place protects you and your property.
5. Recognize Opportunity
Once you’ve established your goals, determined the value of your property, and identified its potential costs, you’ll identify the best opportunity for buying your vacation property.
Taking these factors into consideration and crunching the numbers helps you predict the potential profits you can earn in the presence of existing risks.
Online calculators help you estimate your earning potential so that you can buy the right property at the right price.
More importantly, you’ll choose the vacation home in Orlando that meets all of your needs and gives you a bigger return on your investment.
Ready to start your vacation property search? Team Donovan can help you find the right investment that supports your financial well-being and provides visitors with the perfect setting for their Orlando vacation. Contact us online today or call us at 407-705-2616.