Be aware of potential tenants' first impression of your home…… can it be improved?
Consider landscaping needs, how does the property look when the Renter drives up the property? Does it look manicured and taken care of? Is it in top shape?
Paint your home's interior and exterior neutral colors to maximize its appeal and protect it from weather damage. Paint often remember ocean front properties in the Sea of Cortez have to endure the extreme conditions of the second highest salt content water in the world, Extreme humidity during the July, August and September months, the heat of the Sonoran desert and sand blasting from the wind whipping the beach up against your house during the windy months.
Check your windows and screens: fix any cracks or holes. Make sure they all work. Renters seem to be extra hard on screens.
Have your heating and cooling system and fireplace serviced to ensure maximum performance, and prevent costly repairs later.
Clean all carpets, tile, and upholstery regularly. Replace any that are not in top condition
Make sure all appliance are in good working order
Store or dispose of extra furniture to make rooms look more spacious Clean out your garage, attic and other storage areas Remove, or clearly identify, any items that a tenant may want, but which are not being left behind Check out your competition to ensure that your rent price is competitive
Before spending your time and money on improvements, consult with a professional property manager who can give you advice on how to get the best results.
Maximize Your Property Investment
When weighing the pros and the cons of owning a vacation property, put value, fun, and excitement at the top of your “pros” list. And that is value, fun, and excitement not just for you and your family, but also for anyone who might rent your property from you for their family vacation. Vacationers will find a “home away from home” with all the privacy and convenience they expect.
If you buy a vacation property, asses your purchase. It represents a highly marketable and highly rentable commodity. Consider the vacation options: a resort hotel room, a cramped cabin on a cruise, or a privately-owned vacation house or condo at the destination of your choice.
You buy a vacation property at the seashore. You and your family vacation at your private hideaway several weeks or months each year. The rest of the year, you rent it to other vacationers and the rental income pays all the expenses.
Over the years, the property appreciates in value. You sell it at a pretty profit to augment your retirement income. Or you sell your primary residence and retire to your vacation property. Or you leave it to your children in your will so that the future generations can share the enjoyment of your private paradise.
Is this dream possible? Yes.
Practical? Absolutely, however, some factors are beyond your control. No one can foresee war, recession, inflation, or natural disasters that could impact your property. On the other hand, you can control many of the factors that effect your property. When considering a purchase, the more sophisticated vacation property buyer will ask the real state sales agent, “Will I have a positive cash flow?” In other words, will my rental income cover my expenses?
A good real estate agent will not answer this question. First, many state real state commissions or regulatory bodies prohibit sales agents from promising or guaranteeing you a certain amount of rentals. How can they? Second, even if they had a general idea of the rental income you know your actual property expenses which can vary dramatically.
To illustrate the point, let's take a look at two highly simplified property budgets.
Note that Owner A has a higher mortgage payment. Also note that the low rental income does not cover Owner A's monthly expenses. Owner A has a net average loss each month of $400, the difference between monthly expenses and average monthly rental income.
Owner B has a positive cash flow of $600 each month. The difference? Owner B has a lower monthly mortgage payment (probably the result of a much larger payment on the property). Also, Owner B gets one third more rentals than Owner A.
Other than that, their expenses are the same, except that Owner B pays $300 a month rather than $200 a month for management because the rental management company takes a commission on the additional one third rentals.
While this is a very simplified example, you can see that the two major variables in the positive cash flow equation are: mortgage payment and rental income. You have control over both of these.
Your mortgage payments will reflect your down payment, the interest rate, and the type of mortgage product you select (15-year, fixed-rate; 30-year, adjustable-rate; etc.). Remember that if you select an adjustable-rate mortgage, your monthly payments could go up or down in the future to reflect prevailing interest rates.