There are many reasons why people choose to purchase vacation homes. Sometimes it's for the love of an area and pure personal enjoyment. Other times it's purely for cash flow. If you are somewhere in-between or are looking to run your home as a full-time business, the location of your vacation rental is one of the most important decision you will make.
While it can be possible to turn a vacation home in the middle of nowhere into a successful business venture, I do not advise the risk if you cannot afford uncertainty. Choose a location you love, but be cognizant of its ability to attract tourist.
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For most, location seems basic and research often ends after selecting a particular city or a general neighborhood. Don't stop there. Just because your condo boarders Central Park, doesn't mean it's on the right end. So what's an out of towner to do?
1. Go for a walk and take in the surroundings
Don't hire a cab or rent a car, walk. Walk in all directions around your property for blocks. What do you see? Look at the quality (and type) of shops, businesses, homes. Will they complement your business? Do you feel safe on your walk? Take another walk at a different time of day, including the night. A beautiful beach can look completely different when the tide is out. It can also be quiet and pristine on a Wednesday but packed with locals on Saturday (which may or may not be great for your intended experience).
I once stayed in a vacation rental right next to train tracks where trains passed by every thirty minutes. While some noise levels, particularly in urban locations, are inevitable it's important to understand what is around you. This may sound ridiculous but not too long ago I stayed in a property that was located about 500 yards from a sewage treatment facility. I was sick to my stomach a few hours everyday when the wind blew wrong.
2. Study the local landscape
If you are buying a home or land in an area you aren't intimately familiar with, take extra time to study the details of the land and area. You don't want to show up on a pristine day, only to find out later that during your peak season strong winds blow large tides onto your beach and make swimming a hazard.
The same holds true for erosion. Understand what happens to your property when the extreme elements (rain, cold, heat, whatever) are in full effect. Will your property flood? Do you have exposed water mains that could freeze and burst?
My Personal Experience
When I bought my vacation rental in Park City, Utah, I noticed the neighbor had recently excavated and laid a new driveway, which had already cracked. Park City happens to be the high desert, so this was a big red flag. Sure enough, the water main was exposed and had a history of bursting. In my purchase negotiations, I had them move the water main from the side of the home to the front where it now connects with city water (all underground). The project was estimated to cost $15k, but really cost over $20k due to the depth of the city water connection. A fee I'm glad I didn't have to pay!
3. Be aware of the elements
If you are planning on having a pool, you will need to create a space with consistent sunshine. If a building permanently blocks this opportunity, your rates might be substantially lower than you would have thought. Too much sun, or high temperatures, can also be problematic and reduce travel to your hopeful location for long periods of time. Lastly, understand how the elements will impact the design of your property and maximize what is naturally bestowed upon you if you are building.
4. Never be pressured into buying
Don't let anyone rush you! I don't care if an all cash offer is supposedly looming, if you are not allowed time to research your investment, walk away. This is when the biggest mistakes are made. Likewise, if something doesn't feel right, even if everything else by examination seems perfect, trust your gut and move on.
This guest post was written by Kris Getzie, Founder & Principal Consultant at Volo. She is a vacation rental expert and author of the recently published Vacation Rentals For Newbies.