If you’ve ever watched popular home renovation channels and “lifestyle” channels like HGTV, chances are you’ve come across the phenomenon known as flipping before. Shows like “Flip or Flop,” “Fixer Upper,” and “Flipping Vegas” all portray house-flipping as a lucrative business that just about anyone can enter, if they’re willing to learn some basic real estate facts, such as how to identify valuable assets and potentially catastrophic issues.
Hinging on the personalities of the people hosting the show (whether they be your typical modern family or wackier, more eccentric folks), these shows seek to open the door for people to join an ever-increasing number of people looking to flip properties for easy money.
However, the realities of flipping tend to be a bit more complex than these shows would like most of their viewers to know, to the point of being misleading: flippers rarely see large returns on their properties, and while syndicated personalities tend to have plenty of capital on their hands to invest in properties that may not have large enough returns, you likely won’t.
A poor investment on your part can mean the end of your short-lived flipping career, as well as the beginning of a lifetime of debt.
For people looking to get into real estate and capitalize on our now-booming real-estate market, however, there is a way to dip your toes into the flipping pool in a way that will give you a better chance of success long-term: investing in and renovating properties to use as vacation rentals.
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Vacation rental property has been on the rise over the last few years, with vacationers seeing vacation rentals as a COVID-safe alternative to most hotels; one that typically gives them more bang for their buck as well, as vacation rentals are closer to modern homes than anything else on the tourist market.
For people looking for a better business plan that gives them a steady stream of passive income without some of the risks of flipping, a vacation rental is the way to go. For people who have no idea how the process of investing in and flipping vacation rental property works, here’s a brief guide to one of the safest, most lucrative forms of property investment.
Choose a Property to Invest in
When it comes to the business of vacation rentals, location is everything, so be sure to look at properties within a short drive from major cultural centers, shopping areas, oft-frequented landmarks, and other tourist destinations. The further you get from such areas, the less likely it will be that vacationers will look to rent your property.
At the same time, the closer you get to such areas, the more the price of investing in such properties will increase: for the safest possible route in real estate investment, you’ll want to avoid borrowing capital, so make sure you’re also looking at properties within your budget.
Conduct a Thorough Walkthrough, and Get to Renovating
Before investing in a particular property, you should conduct a thorough walkthrough of the grounds, taking care to notice things that may prove as assets that will draw customers to your listing and things that may take a significant amount of time and money to fix.
Being able to identify them on sight is a skill that will come with time, so be sure to do a ton of research before conducting your first walkthrough, particularly on things that can make an investment an unprofitable money sinkhole.
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Once you’ve made a decision on a particular property, begin the renovation process as soon as possible, taking care to reuse and repurpose what you can to avoid additional expenditures. You’ll likely have a surprise expense or two come up, so make sure you’ve left enough room in your renovation budget to address those if need be.
After the renovation is complete, your final step will be to post a listing on a reliable website, one that customers frequent and where your listing will be guaranteed to get a bunch of eyes on it at any given time.
With the pandemic beginning to ease up ever so slightly, people are choosing to go back on vacation, and vacation rental property will be a booming business in 2022 and on. Choosing to get into it now gives you the chance to rake in the cash when summer comes around, and surpass the hordes of would-be flippers out there doing things the wrong way.
