Retirement; like your parents, but way cooler
In 1991 Billy and Akaisha Kaderli retired at the age
of 38. Now, into their 4th decade of this
financially independent lifestyle, they invite you
to take advantage of their wisdom and experience.
Why You Should Consider
Investing in Vacation
What is a Vacation Rental?
Nowadays, a vacation home isnít just for the rich and famous. In fact, you donít
even have to own a vacation home!
A vacation rental, kind of similar to an Airbnb, is a way for travelers to
temporarily rent properties as a cheaper alternative to paying for a hotel. They
are also seen as safer alternatives to hotels during a global pandemic, due to
the fact that tenants can choose to rent a single entity as opposed to sharing a
The act of renting a vacation home (e.g., a beach house or a cabin in the
mountains) isnít a foreign idea, but have you ever considered
investing in a
vacation rental property? Itís similar to owning a regular rental property,
except vacation rentals are known as a short-term rental property.
Advantages of Financing a Vacation Rental Property
1. If youíre already an investor, investing in
short-term rental properties such as vacation rentals can add diversity to your
2. Vacation rentals are in high demand, so youíre likely
to see greater returns on your investment, as opposed to long-term rental
properties. You can also look into
in other countries.
3. Now a villa on the beach sounds like the
perfect getawayÖ but whatís the fun if youíre not the one enjoying it? Yeah,
youíll be making money, but you deserve a vacation too, right? Well, the good
news is that when you own a vacation rental property, you can absolutely use it
for yourself! Just be aware that personal use is limited to a certain number of
days per year. Exceeding those days can cause you to lose your tax benefits.
Disadvantages that Come with Vacation Rentals
Now with virtually every pro, there are cons.
1. Sadly, not every place in the world supports short-term rentals; but
luckily, most beaches do. Beaches are a popular vacation spot, so short-term
rentals in beach towns make the most sense.
2. Now, this brings up another con: out-of-season. Beach destinations
are most popular during the warmer months, but not so much
in the colder months. Perhaps invest in beach homes in places where it is
usually warm most of the year, or even homes where it is usually cold year-round
(for the winter lovers)--- if youíre not opposed to owning a rental property
that isnít close to home.
3. This brings up yet another con: management. Imagine this: youíre the
owner of a short-term rental property, which means your tenants are not likely
to stay for more than a week. Your property has to be cleaned before the next
tenant arrives. Not to mention, you have to make sure that all of your amenities
are in working order. So it may be more manageable to own properties close to
home, but you can also look into property management.
What Type of Vacation Rental Property Should You Invest In?
Think back to the disadvantages of owning a short-term rental property. Do you
want to travel to maintain your property and/or look into a property management
group? Are there popular travel or tourist destinations near where you live?
Does the city where your property is located support short-term rentals?
Here are just a few types of vacation rentals:
1. Homes and Villas
2. Apartments, Townhouses, and Condos
3. Yurts and Tents
4. Boats and Yachts
Whichever type you decide, make sure that it will yield the best return on your
As always when investing, talk to a professional for advice. A financial advisor
can come up with a personalized plan that will generate the best results for
your investment endeavors. You will likely need to put down more money for a
vacation rental property than you would when buying a home. Also, remember that
your rental property must be fully stocked and ready to live in for your
tenants. It does take a lot of money going in, but with the expected growth in
vacation revenue, youíre likely to build wealth over time.
About the Authors
Early Lifestyle appeals to a different
kind of person Ė the person who prizes their
independence, values their time, and who doesnít
want to mindlessly follow the crowd.
Retire Early Lifestyle Blog
About Billy & Akaisha