Wednesday, 14 August 2019 13:57

How to Buy Vacation Rental Properties

Buying a Vacation Rental Property

How to Buy Vacation Rental PropertiesBuying a vacation rental property can be one of the most profitable decisions in your life. The most challenging hurdle that you’ll face is raising the financing. Fortunately, there are plenty of options available to savvy investors looking to profit from vacation rentals.

The Vacation Rental Market

Vacation rentals have been gaining traction as one of the most profitable forms of real-estate investment. Income property investors with the gumption and the know-how can make enormous sums of money on vacation rentals.

When you buy a vacation rental property, you’re making an investment that yields income as well as substantial tax benefits.

 

Opportunities in Multifamily Housing

Another area you can invest in is the multifamily rental housing market. These properties include condos, apartment complexes. Multifamily housing can also be a vacation rental opportunity if you buy in the right locations.

The Vacation Airbnb

Platforms like Airbnb are driving the market demand for vacation rental properties. The platform has generated $93 million on revenues of $2 billion, making Airbnb one of the most attractive investments in real-estate. There are some lucrative advantages to setting up your vacation rental as an Airbnb. Being a member of the Airbnb network gives you access to millions of visitors to the site every hour. Not only is this a good way to stand out and get your property in front of people, but it’s also a great way to reduce advertising costs.

The Airbnb name commands attention and will make it easier for those of you just starting out to generate attention more easily than you could on your own through paid ads.

Financing a Vacation Rental Property

When you go to finance a vacation rental property, you’ll have a hard time if you apply at a bank. When it comes to rental property investments, banks don’t like the risk and typically turn down aspiring borrowers. Banks will also expect nearly pristine credit to even consider such loans, which rules out a lot of people.

Working with a bank to finance rental property investments just isn’t worth the fuss. You’ll end up wasting hours of your time on meetings and paperwork while direct money lenders can close a deal in as early as 3 weeks.

One of the best ways to buy a vacation rental property is to finance it thru a direct money lender like Rental Home Financing.

Short Term Vacation Home Rental Financing

Short term vacation home rental financing is a perfectly designed loan option for professional real-estate investors looking to finance vacation property.

30-year amortized loans are available that have no balloon payments whatsoever. These loans feature fixed rates and place no limit on the number of properties in your portfolio. Interest-only payment options are also offered through short-term vacation home rental financing.

The title of the property may be in either a personal name or that of an LLC.

Why Vacation Rental Properties Should Be Financed as an LLC

There are some strong advantages to financing rental properties as an LLC rather than as a sole-proprietor. For one thing, the risk of being sued by neighbors or your own tenants is a sobering deterrent.

Another reason why forming an LLC is a good idea when seeking an Airbnb loan is that if things go south, you won’t be held personally liable for the debt. By taking on the form of a limited liability company, your personal assets are separated and subsequently secured.

You will also benefit from the more generous tax structure afforded by LLC status. Instead of your profits being taxed as personal income, you’ll receive the notably lighter corporate tax. The money you’ll save on taxes can go a long way and makes Airbnb investments leaner and ultimately more profitable.

Why Buy One When You Can Have Them All, the Power of Blanket Loans

When first getting your feet wet in the vacation rental game, buying your first property is exhilarating, but for those with sufficient ambition, larger thrills await. Sure, you’ll be sitting on a nice little extra income from your vacation rental, but what if you could multiply that by the dozen?

For beginners, taking out a single mortgage when buying a vacation rental for the first time is natural. When you wade out into deeper waters however, individual short-term vacation rentals loans won’t cut it. To build a proper empire off of income properties, you’ll need to facilitate the kind of financing that experienced investors use every day, blanket mortgages.

In concept, a blanket mortgage accounts for the financing of multiple rental properties and bundles it all under one loan. You’ll find that the monthly payment is much lower than with multiple separate loans.

Real-estate investors who finance vacation rentals with blanket mortgages typically already have at least 10 properties in the portfolio. Another reason savvy investors opt for blanket mortgages is that banks become uncooperative when seeing 10 properties already being financed and are reluctant to extend any more money.

Start Profiting on Vacation Properties with Rental Home Financing

When you raise capital through Rental Home Financing, you are making an investment, not only in property but in yourself as well. As a trusted industry leader in direct money lending, Rental Home Financing is invested in your success. As soon as you qualify, you’re ready to start buying vacation homes and reeling in the profits.

Call Rental Home Financing and ask about short term vacation rental home loans.

 

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