Every vacationer to the Outer Banks has considered, if only for a moment – what it would be like to have their very own home in paradise; A place for a family retreat or perhaps to eventually retire to.
Consider this: Instead of doling out dough every year to rent a home near the beach, you could own a condo or home in the same area.
Buying a vacation home provides an endless number of getaways stretched out in front of you. No matter where you live, getting out of town is cathartic. 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 other homeowners' rules. Plus, you don’t have to worry about any additional costs because you’re already paying for it, especially if you end up cooking at home. Owning a second home, however, may not be the best choice for everyone, regardless of the location. 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’ll only be staying at your vacation home for a portion of the year. This provides you two perfect opportunities: the potential of earning income on the days that you aren’t using the property while also taking advantage of property appreciation. These two factors alone can turn an expensive lifestyle into a solid asset. A good vacation rental property has the potential to cover your mortgage payments, plus generate healthy additional profit. On the flip side, keep in mind vacation rental properties are more sensitive as the seasons fluctuate. You will have more renters during the summer months rather than the winter. Make sure you maximize the availability of renting your property during these popular times for visitors to avoid becoming financially exposed if you suffer a lack of booking revenue during those winter months.
Generally, the rule of thumb is — if your monthly mortgage payment on your vacation rental property is equal to or less than what your one-week peak season rental rate is, and if you rent for four months out of the year, then you should be able to achieve positive cash flow.
Be sure to do some research before making your purchase by checking out other nearby vacation rental listings in the neighborhood or area that you’re considering for your investment. Rental Projections are also a key factor to help you gain insight into certain properties while also helping to keep your expectation of rental numbers more realistic. Using an online short-term rental service makes it convenient to manage your rental property. They can make pricing, marketing, and communication with potential guests quite straightforward and easy. In addition, a service can oversee the billing process for you.
Vacation properties in the Outer Banks are likely to increase in value and appreciate over time due to the popularity of the destination location.
Here in the Outer Banks, there are homes available to meet a wide range of budgets. The opportunities are out there — now is the time to begin a search for your dream vacation house. For more information, don’t hesitate to reach out to your Outer Banks Boutique Real Estate Team for a personalized experience. Here at Eillu, 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. Vacation rentals 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. Because 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 owning a vacation home on the Outer Banks would be more beneficial to you than renting but you are unsure of where to begin with the process, don’t 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. You must determine the price range in which you are financially comfortable. Research your credit history, the amount you can handle for a monthly payment, and your debt compared to income.
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 beach, we guarantee it!