How do you choose a home for a vacation rental when there are thousands available in every city, town and country? At Sweet Tea Properties we are a family run outfit, but we still have a systematic process for choosing properties. Our system includes not only analytics and numbers, but feelings, intuition and wisdom. Here is a list, not in any particular order, of things we consider and research:
- Know what you want location-wise (beach, mountains, forest, city) then narrow your search to favorable areas within those locations.
- Get a very good/highly recommended real estate agent in that area who can also help you with remodel connections. (They will be knowledgeable about 3-6 below.)
- Exit strategies.
- Cash flow as a vacation rental.
- Price to earnings ratio/cash on cash.
- General market trends.
- Ultimately answering the question, if we purchase this property, are we going to make money?
- Get a feel for the home and the area.
- Is it going to look good on the internet?
- Are the vacation rental guests going to love it on arrival?
- Does it have the amenities guests will be looking for?
- What are the possibilities that this property is a hidden gem?
- How much is the property worth to you personally, not just as an investment?
When you have finished considering what a property has, what it will need, what you are willing to put into it and the potential for what you can get out of it, ask the Lord for wisdom and He will answer. Dave and Levi and I never purchase a property without doing our due diligence in research, but the Lord has the final word. His wisdom is there for the asking. So ask.
The search is half the fun,