In recent years, the real estate industry has seen good economic growth and the short terms rentals are on a rise, creating an exciting investment opportunity. The inter country travel has skyrocketed and investments in this market have given multifold returns.

Investing in vacation rental properties is an excellent strategy. As a homeowner, you stand to benefit in many ways – any rise in its value when it comes to selling, passive yet regular income you can generate with it by renting out and of course, you get to use the property for yourself whenever you want to relax and rejuvenate.

Also, thanks to Belvilla and other vacation rental managers, making money from vacation rentals have become so much easier than ever before.

So, are vacation rentals a good investment opportunity? Should you be investing in one? Read through to know if this type of investment is for you.

Why should one invest in a short term vacation rental?

1. Good returns

The biggest advantage of investing in a vacation rental is that you can generate regular rental income out of it. You can rent out your property through a vacation rental service and attract tourists and guests from across the globe.

One thing you need to keep in mind while investing in a vacation rental is its location. Pick a property that’s easy to get to and will attract guests. Consider how busy the neighbourhood gets during popular times of the year, how far it is from other attractions in the town or the nearby metro station.

At the end of the day, your returns largely depend on the location of your vacation rental property. So, we advise you to spend a lot of time researching about the location before taking the plunge.

2. Gaining exposure to real estate market

Franklin D Roosevelt, the 32nd President of the United States once said that “Real estate is the safest investment in the world”. And, another American entrepreneur, Marshall Field said that “Investing in real estate is the only way to become wealthy”.

Real estate properties are always in demand, which means that your vacation rental value is increasing all the time. So, in the long term, when the time comes, you can sell your investment property and cash in the profits.

3. Rise of full service professional PMCs

If you’re thinking about the headache of managing a vacation rental, then let us just stop you there! The rise of vacation rental services has taken all the hassle out of property management. The service company takes care of everything for you and they know the market and your property inside out. From listing your property to marketing it to ensure guest bookings, they do it all. What about cleaning? Covered. All you need to do is just sit back, relax and let your property earn for you.

We want to take this opportunity to introduce ourselves. At Belvilla, we’re helping our homeowners welcome guests for more than 40 years now. We’ll understand you and your property and work out what needs to be done to get the most out of your holiday home and help you maximise your income. Just talk to one of our rental experts today to know more about our service.

4. Your second home!

Could it get any better when your guests are actually paying for your annual vacation? Yeah, that’s right! When you invest in a vacation rental home, you can spend your own vacations in it while renting it out for the rest of the year.

So, you’re not only making money out of your vacation rental property, but you also always have a place to go to whenever you feel like relaxing and rejuvenating. You also host your friends and family every now and then, spend some quality time with them and have great fun.

Vacation rental property might just not necessarily be a financial asset only, but could be a personal investment as well.

5. Tax benefits

You can make a business out of your vacation rental property and avail substantial tax benefits in the form of mortgage interest, maintenance, repair costs, property management fees etc. You can basically write off most of your expenses and not pay tax on them.

However, the tax laws vary with every country. So, make sure that you’re completely aware of your country’s tax rules before taking advantage.

Bottom line

There’s no doubt that an investment in a vacation rental property could give you good returns and help you build long term wealth. However, before making the investment, it’s very important to research about the location, the type of moving audience in the neighborhood and generally get an understanding of the pros and cons of operating a vacation rental property. Once you get the hang of managing it, you stand to enjoy and reap benefits from your investment for a lifetime.