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By David Dixon<\/p>\nBy David Dixon<\/p>\n
One of the best ways to diversify your investments is to get into the short-term rental property market. When you invest in a short-term vacation home rental, there are many amazing possibilities to grow your wealth long term. Before making this decision, however, be sure you\u2019ve answered these critical questions, as well as explored the\u00a0many pros and cons<\/a>\u00a0outlined by\u00a0Redfin<\/a>, so you can be confident that your investment will pay off.<\/p>\n Before making an offer, it\u2019s essential to know that the value of the home reflects the price you\u2019re paying. If there\u2019s a mismatch between what you\u2019re paying and what it\u2019s worth, it isn\u2019t a smart investment. The easiest way to verify the home\u2019s value is to use an online home value calculator. Along with verifying the value of the home, you should also get to know the vacation rental market in the area. You may already know that the\u00a0location<\/a>\u00a0you\u2019re considering is popular with tourists, but have you considered specific details, such as how convenient the home is to popular attractions and whether you can rent it year-round? Doing\u00a0market research<\/a>\u00a0can answer these questions and give you an idea of the average rental prices in the area.<\/p>\n You probably have an idea of the primary costs, including a mortgage, taxes, insurance, and routine maintenance. But along with these fixed expenses, the Balance recommends factoring into your budget\u00a0variable expenses<\/a>. The most common variable expenses are home repairs, such as having to replace a roof or HVAC unit. If you buy a newer property or one that has been updated recently, you may have more time before things wear out. No matter what, though, your budget should include enough room for both fixed and variable expenses.<\/p>\n If you plan on renting your home, the primary logistic considerations are how to market your property and handle renters. This decision will largely depend on how close you are to the vacation property and how much time you can spend taking care of things yourself. Many homeowners list their property through online vacation rental websites; if you go this route, you will still need systems in place to handle the\u00a0logistics<\/a>\u00a0of cleaning and care of the property.<\/p>\n Another thing to keep in mind is that every vacation rental website has many available properties, so it\u2019s worth your time to go the extra mile with your marketing. According to Coastal Living, having a great title, fabulous photos, and even your own personal website for the property are all key strategies for\u00a0promoting your home<\/a>.<\/p>\n Even if you are already a homeowner, buying a property to use as a vacation rental comes along with some special considerations that don\u2019t apply to your primary residence. For example, some towns have local\u00a0rules and regulations<\/a>\u00a0concerning rental properties. Make sure you\u2019re aware of any restrictions before buying a property so you don\u2019t end up running into trouble.<\/p>\n If you\u2019re buying a home that is part of a community or condo building, there may be\u00a0HOA dues<\/a>\u00a0or other fees. This isn\u2019t necessarily a bad thing \u2014 you just don\u2019t want any surprises after signing a contract! In fact, as long as you\u2019re aware of any fees, buying a property where some spaces are maintained for you through a Homeowners Association can make your life easier.<\/p>\nIs It a Smart Investment?<\/h2>\n
What Costs Can You Expect?<\/h2>\n
Have You Worked Out the Logistics?<\/h2>\n
Are There Factors You\u2019ve Overlooked?<\/h2>\n