There are so many factors to take into consideration when buying luxury home rentals for investment purposes with the first being the location. Now this may sound so obvious, but if you are investing in an area or country that you aren't that familiar with, how do you really know you are buying in an in-demand location that will ensure you enjoy an excellent occupancy rate throughout the year, giving you an additional income while paying the monthly expenses associated with your investment property. Always study the location in detail to ensure you are buying a luxury home rental property in an area that will have visitors queuing to have their turn in your beautiful home.
Always take the time to speak to local vacation rental specialist companies to identify the demand for vacation rentals and the current rates associated with renting out your luxury home. Give them the basic idea of what you are thinking of buying so that they can give you what you can expect to earn on a daily or weekly rate. This can help you identify if buying this particular luxury home will be the wisest investment decision.
From here identify your budget. If you are buying abroad, you are going to have to take the current exchange rate into consideration. Remember you are going to have to transfer the money abroad to pay for the luxury home rental investment property, so take all of this into consideration and set it into your budget. Money transfers from one country to the next incur charges over and above the exchange rate. Speak to your bank to get an estimate on what you will pay to transfer the money to pay for the property. This can help you set your budget effectively.
Think about how often you intend to travel to the area and for how long. Will you be using the property twice a year for a week at a time or coming through once a year for a month or more? These are such important decisions to make early on to identify how often the property will be available for vacation rentals, so you can get an idea on what you are guaranteed to make as a return.
Remember that any return you make can go into a local bank account, so you don't have to transfer money or use your bank cards abroad, but have access to your own money in the country when visiting. This is also helpful for maintenance costs which may be needed from time to time, again reducing the need for expensive money transfers from one country to another.
Focus on any tax implications that you may incur. This will be determined by what country you buy in and the value of the property to where you are buying the property from. Maybe you are in the UK and buying in Costa Rica or you are in the United States and have your heart set on Manual Antonio National Park, always look closely at tax implications and seek professional advise before making any major decisions.
Finally, find yourself a vacation rental specialist in the area you are buying in that provides a complete property management experience so you can leave the luxury home rentals in their capable hands when you return home.
Martin Wynn
1 comment
Thank you Martin! That was an amazing read about buying luxury home rentals.