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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.

3 Reasons Why You Should Consider

Investing in Vacation Rentals

Aruba Arif

vacation  home investment

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 space.

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 investment portfolio.

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 rental properties 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 investment.

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.

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About the Authors

 
Billy and Akaisha Kaderli are recognized retirement experts and internationally published authors on topics of finance, medical tourism and world travel. With the wealth of information they share on their award winning website RetireEarlyLifestyle.com, they have been helping people achieve their own retirement dreams since 1991. They wrote the popular books, The Adventurerís Guide to Early Retirement and Your Retirement Dream IS Possible available on their website bookstore or on Amazon.com.

contact Billy and Akaisha at theguide@retireearlylifestyle.com

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Retire 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.

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