Adams Equity Group | Expanding Your Investment Portfolio With Vacation Rentals
Channel: Adams Equity Group | Scott Adams Real Estate
Date: 22/06/2017

Are you looking to expand your investment portfolio, but don’t know how to start? A good option for investors looking to get into the rental property game is to start with vacation rentals, like Airbnb. The return on investment can be high, but Airbnb rentals do come with some drawbacks. To learn about what these are and whether this is the right choice for you, watch my latest video.

Learn more: http://www.adamsequity.com/blog/expanding-your-investment-portfolio-with-vacation-rentals.html

Adams Equity Group | Top Atlanta Real Estate Agent Scott Adams | Atlanta Luxury Real Estate | Selling Atlanta Luxury Homes | Scott Adams Luxury Agent, Economist

TRANSCRIPTION: 

Investment properties and distressed properties are non-existent right now. If you’re looking to buy a foreclosure or short sale, good luck. So what you can you do if you’re looking to build your investment portfolio? 
 
To invest at these higher prices, it’s hard to get your cap rates to function properly on your rental properties when you’re doing annualized rentals. However, I have clients who are purchasing properties in key parts of town—duplexes, triplexes, and even some single-family homes—and they’ll put long-term renters in one or two of the units, and use Airbnb for short-term vacation rentals in the other units.
 
You need to focus on a great part of town, and you need to be careful. The Airbnb phenomenon has its own drawbacks. If your county, city, or local ordinances prevent it, you need to know that in advance. You need to work with an agent who can do their due diligence on these types of things.
 
You need to make sure that you won’t be mandated to pay any hotel taxes if the property isn’t a principal residence. Depending on where you are located, this may be something you have to consider. I have people that are buying these properties with the intent to rent them out on Airbnb or other room-sharing sites that are out there.
 
Short-term rentals do produce more on a monthly basis than annual rentals, and if you can keep it full, your maintenance costs are actually reasonable as well. This is because on the exit of the renter’s stay, they are required to pay cleaning costs. If you have a great relationship with a cleaning crew, a lot of times they can tell you about problems or maintenance issues before they exist.
 
It’s almost a hands-off option, and it’s getting close to an amazing return on investment for a small bit of work. In the future, if you want to put long term renters into the space, you can do that. Home prices are going up and rental rates are going up, so it’s a solid investment. So, if you’re looking to get into the rental market, vacation homes are a great way to go.
 
If you have any other questions or are looking to get into the rental market, give me a call. I’d be happy to help!