Marti Kilby, CRS

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Top 10 Things to Know About Buying a Vacation Rental

Top 10 Things to Know About Buying a Vacation Rental

In September 2019, my husband and I made a decision to buy a cabin in the picturesque mountain village of Idyllwild, CA, about a 2 hour drive from our home in San Diego. We wanted a special getaway we could share with our grown children and grandkids. But we also knew that in order to afford it, we would need to rent it out as a vacation rental. And so began our adventure…

It’s been a bit over a year since we closed escrow. Within a month of closing, the Pandemic hit and vacation rentals in Riverside County were all closed. Gulp. No one saw that coming. But here we are with a year of experience going from idea, to purchase and rehab and setting up the cabin for fun and money. Here are the key things we’ve learned along our journey:

1.Know your motivation.  Why do you want to purchase a vacation home? Do you want to use it exclusively for family? Are you looking at it strictly as a business? Or are you hoping, as my husband and I did to find a balance between the two? Understanding your own expectations and what you are prepared to handle financially will direct your every move in this process.

2. Location, location, location. Choose Wisely. Vacation rentals offer people an opportunity to escape to somewhere that is not like home. The most successful rentals offer proximity to a desirable location be it the ocean, a lake, a forest, a ski resort or the theater district. Views sell. Busy streets, not so much. Be sure and check for restrictions before writing an offer. Many HOAs, neighborhoods and towns have restricted short term rentals.

3. Is your plan financially sound? I can’t stress this point enough. Do your research and develop a complete budget of all estimated costs to not only get up and running but maintain operations. How much would your home rent for? What expenses might be out of the ordinary for you, such as annual brush clearing or snow removal?. Be sure and get insurance quotes and check for any local occupancy taxes.

4. How will you manage the property? Many folks jump in with the idea that they will just list their property on Airbnb or VRBO and they’ll be ready to rock ‘n roll once they hire a cleaning crew. Not that simple, especially if you live out of the area. Many cities and counties are now requiring a local contact who can go speak to your guests if they get too rowdy. Or who will your guests call if the toilet backs up at 10pm? Who will clean the spa? I could write a whole post about this one item, it is that important. A local property management company may be your best bet if you are out of the area.

5. How will you market the property? As with any other product, yours could be best, but if no one knows about it, who cares? The directory listings can be very efficient, but you also need to decide whether or not you are up for responding to inquiries at 5am. And you absolutely must have professional quality photos and video and perhaps a website, especially if you are in a highly competitive rental market. Remember, you are marketing an escape experience.

6. Who is your target market? To an extent this will be determined by the location, size and layout of your home, and the number of bedrooms and baths. Is it best suited for two couples or is it the ideal layout for families with kids. Will you allow a non-related group of friends to throw a party there? Will you allow dogs? Please note that some of these questions may also be under the jurisdiction of an HOA.

7. What will you provide?  If you have any experience staying in vacation rentals, you know that some provide everything you could possibly need, while others leave you searching for a dish towel. Our experience is that more is better. In addition to a kitchen fully stocked with cookware and dishes, we also provide basic spices, olive oil and condiments, coffee and of course shampoo and body wash. It is also a good idea to provide a written guide to the property detailing information about the home, near-by restaurants and things to do.

8. Creating the ideal scene.  If you are a natural at decorating, good. If not, hire a professional. You need to maximize the strong points of your property, be it a view, a gorgeous fireplace or an inviting spa. Maybe think about including a telescope or binoculars or a guitar or piano. For the kids how about a PlayStation or Ping Pong table? Maybe let people know that deer wander by the windows several times a day. The more unique the experience, the more you can charge.   

9. Fitting in with your new neighbors. Surprise! They may not like that you are bringing a vacation rental to their neighborhood. Meet them in person and provide your contact information. Let them know that if they feel uncomfortable with the behavior of your guests to please call. Most counties have strict rules regarding noise and other disturbances and you should be prepared to see that these are enforced.

And finally…

10. Stuff happens. Glasses will be broken and little things disappear or end up in odd places. Part of what makes people feel at home might be rearranging your furniture or reorganizing your books. You just need to take a deep breath. Furnish your home with nice and stylish items, but don’t put anything in there you would be devastated to lose.

I mentioned at the top of this post that this was based on personal experience so I thought you’d like to see our website and video.

I look forward to your comments and hope you have found this to be useful. Please let me know if you have any specific questions as I’m happy to help. Ready to find a vacation home in Idyllwild? Just let me know.


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