Knowing Your Market when Purchasing an Investment Property

Living and working in a beach area brings so many opportunities for a short term rental agent to share their knowledge when it comes to investors looking for their first property or even for a seasoned investors. The market is always changing in both sales and rentals. Rental/Sales agents are some of the most detailed, number crunching & critical thinking people you will meet in the industry. A great agent can tell you how much they think it will rent for, the estimated occupancy rate, what you would have to improve upon to bring top dollar & even the type of clients you could expect to have. Not all properties are great rental properties & you may not get the ROI that you want. For instance, did you know that in my area, large homes (those like in OBX) are not as popular and are actually harder to rent? Your first time investor thinks “the bigger the better ROI”. This isn’t the case. I can get it rented BUT it typically is for 3-4 nights (weekends) not 7 days. It’s also normally to groups (bachelor/bachelorette parties) & not families so there is more wear and tear on the property, cleaners & definitely the property managers! Did you also know that downtown is a great location for a rental but that many of the properties have limited parking? I like to tell my buyers that there is a lot of moving parts when looking for an investment property. The right agent will guide you on making a decisions that works for you and your needs. 

Some markets and real estate offices do not allow their rental agents to sell properties, therefore, restricting the buyer on having all the details needed to make a sound & comfortable purchase. When this happens there are three things a buyer can do. 1) Find an agent who is both sales & rentals 2) Ask your sales agent if you can ask an in house rental agent for advice or if they could work together. Of course, this means that you would want to put your property in said companies rental division. Otherwise the rental agent would not get paid for any assistance they gave you. Remember, they only get paid for reservations & bookings. This is where a lot of folks take advantage of rental agents and their time which is why some won’t offer the advice or offer A LOT of advice. To their defense, more times than not, an agent will assist the buyer and give them plenty of free advice only to have them either sign with another company or decide to rent their property themselves. Please understand that if you come across a rental agent that has been in the business very long, they may not offer up too much help cause they have been burned one to many times. It’s a dog eat dog business! AND 3) You can higher a Vacation rental consultant. Yes they do exist and are worth the money. They can assist you with everything from purchasing your property, setting your property up online if you prefer to rent it yourself, what to prepare for if you decide to owner rent, how to find the right vendors, and if you prefer to let someone else handle all the stress, what to look for in a rental company. The fee’s will vary based on your need. If you would like more information on Vacation Consultants, you can email me @ [email protected].

As you can see, vacation rental properties are very successful BUT how successful depends on knowledge.  Like the old saying goes “knowledge is power”, in this case it’s MONEY or ROI! Know your market and more importantly, make sure your sales agent knows it! If not, spend a few dollars to be sure you are making the best decision!