If you are going to be investing time and money into a second home to rent out as a vacation property, choosing the right property can be a very important decision. To ensure your happiness, as well as the happiness of renters who will be paying to stay at your property, choosing a location is the first hurdle that you will have to overcome. Research where vacationers spend their time and choose a location that matches the desires of travelers, as well as your desires. Afterall, the hope is that you will get to spend significant amounts of time at your vacation rental as well, and potentially even retire to the vacation property in Colorado. The location and type of house that you choose may also very well be influenced by your budget and other factors, so spend enough time researching housing markets and vacation patterns to make an educated decision on where to buy.
The type of house and amenities for a potential vacation rental depend largely on the type of vacationers that will be traveling to the area and also the “norms” in the area. If every other vacation rental in the area has 2 bedrooms, 2 bathrooms and a patio, you will most likely want to make sure your property offers at minimum these amenities as well. Vacationers look for commonalities among properties as a standard, and anything above and beyond these common factors will be the selling points. If you want to make sure that your property gets rented above the competition, consider looking for a property that has a feature that sets it apart, like a pool, a luxury kitchen, a hot tub or a game room.
Once you have found a potential rental property, determine the rentability and profits that you might make from the home. Look on vacation rental listing websites at other homes in the area and rates that home owners charge for peak-season and off-season renters. Compare the monthly income that you could make from renting the property to the potential mortgage and fees you will take on when you purchase the rental property. You will also need to look into restrictions on the property, as some markets don’t allow short-term rentals. Other important factors to consider could include zoning restrictions and insurance costs, depending on where the property is located.
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