Here’s Some Advice for First-Time Vacation Rental Investors

Think Like a Vacationer

Natural beauty and comfort are typical desires, especially when it comes to creating an unforgettable experience that vacationers will rave about for years. However, renters need two important benefits before signing on. First, consider hiring a property manager or a property management firm to support guests. Second, integrate contactless entry and access, which guests value just as much as support.

When researching your location, understand the surrounding market and how much demand there is for vacation renting. One question you can ask is, would you want to vacation in this location? You should also ask if there's enough demand to justify buying the property and investing in hospitality tech software to facilitate reservations. Taking the time to familiarize yourself with all aspects of the market will save you money.

Just as with any real estate business, vacation rentals are all about location, because it directly affects revenues. The rhythm of the area determines its ebbs and flows. If your house is near the water, it may be attractive to summer vacationers but will be quieter during the colder months. Meanwhile, properties near a ski resort or in a tropical location will attract different types of winter vacationers. Knowing when you have downtime will also help you figure out your maintenance schedule.

Depending on location, you’ll need to pay down at least 25% of the buying price and borrow at a higher interest rate. This will definitely impact your rental pricing, which is why you should look into direct booking. Compared to popular vacation rental platforms and methods, direct bookings capture a larger share of rentals and put more money in your pocket.

While there are plenty of platforms to promote your property, it’s what you advertise that makes the difference. Over 70% of ad listings speak to extra cleaning measures they take. Take the time to integrate your research terms into your ads to ensure that you attract your ideal renter.

Whether you’re buying a vacation property in Long Beach or some other location, one way to protect yourself is to establish a limited liability company (LLC). Not only will it provide some privacy, but it also offers significant tax advantages and protects you and your assets from potential liability. To form a California LLC, it is best to use a local law firm or business formation service with experience in handling the formalities involved.

The key to making your first-time vacation rental venture successful is careful research. The data you uncover will not only help you decide on a good location but will also provide insight into communicating with your target renter.



Whether you’ve inherited a property or need business formation help, contact the Long Beach, CA, law firm Simon, Mckinsey, Miller & Stone for assistance.