At first glance, buying a beachfront condo that you intend to rent out when you are not there sounds like a great way to make extra money. There are many questions that need to be asked -- and answered -- before you stick your toes in that sand.
Is renting allowed in your complex or area?
Not every community or condominium complex allows rentals. Some forbid it altogether, while others only allow a certain percentage of the units to be rented out at any given point in time. Talk to your real estate agent well in advance so he or she can steer you away from complexes that have strict HOA (homeowner's association) rules on the subject of renting.
Are short-term rentals allowed?
Be very specific about how long you intend the rental period to be when you discuss your options with your agent. While rentals may be allowed, there are complexes that address the length of the rental contract you can offer. Many 55+ communities, for example, require rental terms no less than three months. Their residents do not want people moving in and out every week.
Should you use a vacation property management company?
Hiring a management company is always a good idea when you are considering buying a vacation home. Not only do you not have time to clean up before and after each renter, but the paperwork can be confusing. Using a management company to handle all the details keeps things professional and convenient.
Would you use the vacation home yourself?
Do not simply buy a vacation home because it sounds like a good deal. Ask yourself if it is something you would use. If it is not a vacation home that you would rent, then chances are pretty high that others would not want to either.
What amenities are important to you?
Write a list of amenities that appeal to you as a vacationer. Do you prefer a home directly on the beach and in the middle of the action or are you an out-of-the-way, cabin in the woods type of person? Are plenty of on-site activities, like tennis and yoga important or do you require easily accessible fine dining options? If the amenities appeal to you, they will likely appeal to others as well.
What financing will you use, if any?
Remember that both FHA and VA loans require the homes that they loan on to be owner-occupied, meaning you will have to use cash or conventional financing to purchase the vacation home.
Buying a vacation home is a big step financially. Renting it out when you are not using it is a great way to make it more affordable. Contact a vacation property management company today.