Every vacationer to the Outer Banks has considered, if only daydreaming – what it would be like to have their very own home in paradise; A beautiful destination for a family retreat or perhaps a home with a view to eventually retire and start the next chapter in life.
Consider this: Instead of spending your hard earned savings every year on a weekly rental near the beach, you could put that money toward a condo or beach house to call your own.
Buying a vacation home provides an endless number of getaways stretched out in front of you and making that dream a reality. No matter where you live, getting out of town is energizing. Even more so, it’s almost meditative being able to relax in a space that’s all yours without the hassles that come with hotels or having to abide by another homeowner’s rules. Plus, you don’t have to worry about any of those unexpected costs since you are already at home, especially if you end up using that beautiful kitchen.
There are several things to consider when deciding if owning a home on the Outer Banks will be of greater value to you rather than simply renting a home on the Outer Banks. Owning a second home should be pleasurable, not the source of constant financial strain. Smart decision making is key, and always remember to know your limits when it comes to big decisions that will impact your future. When done right, the advantages of owning a home on the Outer Banks can far surpass the disadvantages, so we’ve gathered some information to help those who are trying to determine what’s best; to Rent or to Own?
Vacation Home Turned Money Maker
Food for thought: Not everyone wants to buy a vacation home, but no one turns down the chance to visit someone else’s.
Realistically, you will be renting your investment home during the prime season as well as any other time of the year you feel is necessary to generate a good return on your investment. A good vacation rental property has the potential to cover your mortgage payments plus generate a healthy additional profit. Any week that is not rented is yours to enjoy! Keep in mind vacation rental properties are more sensitive as the seasons fluctuate. You will obviously have more renters during summer months rather than winter. Make sure you maximize the availability of renting your property during these popular times for your guests, to avoid becoming financially exposed if you suffer a lack of booking revenue during those winter months. The months of May and September, as well as holiday weeks such as Thanksgiving and Christmas have become increasingly popular rental opportunities on the Outer Banks. That still gives you plenty of weeks to enjoy your dream home at the beach.
The general rule of thumb is that the yearly rental income should be 10% or more of the purchase price. Be sure to do some research before making your investment by checking out other nearby vacation rental listings in the neighborhood or area that you’re considering for your investment. Rental history or projections are a very big factor to help you gain insight on rental properties by helping to keep your expectation of rental numbers more realistic. Using an online short-term rental service like Airbnb/VRBO makes it convenient to manage your rental property. Their website interface makes pricing, marketing, and communication with potential guests quite straightforward and easy. In addition, Airbnb/VRBO will oversee the billing process for you. The best reason for using these services is it takes away the Property Management commissions and fees, hence increasing the profit earned per week. To do this, the investment owner must have the extra time to be very organized and also have vendors in place to take care of housekeeping, pool and hot tub maintenance, landscaping and even the little things such as a light bulb change. At Eillu, we will be happy to measure the positives and negatives for you as to which way to rent your home; either through a property management company or a do it yourself service such as VRBO.
Here in the Outer Banks, there are homes available to meet a wide range of budgets. The opportunities are endless – and now is the time to begin a search for your dream vacation house. For more information, don’t hesitate to reach out to our professional agents at Eillu, your Outer Banks Boutique Real Estate Team for a personalized experience. We value our clients and strive to create a lasting relationship with each and every person we come in contact with.
Things to Consider
As with any home (and really life itself) there is always the chance of unforeseen and unfortunate events happening. Sometimes it doesn’t matter how hard you try to prevent certain things by taking extra precautions, some things will always be out of your control. Investment Homes can be costly to manage, both in terms of time and money. Insurance will help cover certain instances involving renters, but even when your property is unattended there is a chance for the unfortunate to happen, such as a burst water pipe that may leak and cause damage. Since events such as these cannot be controlled, consider having someone check on your property when it’s not actively being utilized. Even if you don’t know anyone in the area, some rental management companies may work with you and offer such services without making you pay all the hefty fees for their full line of services.
If you are unsure that owning an investment home is right for you, do not worry! Here at Eillu, that’s what we are here for; helping you with every step along the way. An important thing to consider before you begin searching is to understand your financial situation. To begin your search, you must determine the price range in which you are financially comfortable. Research your credit history, your debt compared to income, and the amount you can handle for a monthly payment.
Whether or not it is worth dipping your toes into this form of investment is debatable and depends largely on your personal financial abilities and tolerance for risk. If you’ve decided to begin investing in Outer Banks real estate, contact Eillu for a unique and personalized boutique experience that you won’t find anywhere else on the Outer Banks. We guarantee it!