Purchasing a vacation rental offers a unique opportunity to grow your wealth and personally benefit from the investment. If you were to invest in the stock market, would it also offer you a comfy bed to relax in on the weekend? I don’t think so.
Investing in real estate has a few inherent rewards compared to investing in the market. In comparison to traditional investments where your gain is in relation to your investment, in real estate, your gain is based on the total value of the property. For example, if you invest $10K in the stock market and you receive a 10% return on your investment, you end up with an extra $1K in your pocket. If you buy a $100K home with $10k down, and it appreciates 10%, you’ll end up $10K richer. Obviously, I’m simplifying this theory for the purposes of this post. However, the bottom line is as long as your rental revenue covers your expenses and the real estate market stay strong, you can make a lot more money in real estate investments.
This theory works for any investment property, but when you invest in a vacation rental, you get the added bonus of being able to enjoy the property too! Want to spend a weekend on the lake, you can just stay at your vacation rental. You’ll save money by not booking a hotel or someone else’s vacation rental, and you’ll get all the bragging rights associated with having a second home.
Austin, Texas is a fun place to vacation! We have a great local music scene, a plethora of nationally acclaimed festivals, and a vivid bar scene that’s pulling in all of the bachelor and bachelorette parties from across the country. Hell, tons of people pay their entire mortgage for the year by simply booking out their home for the month of March to SXSW goers. Furthermore, the Austin market is strong! It continually ranks in the top 10% nationally for real estate appreciation.
Will I have to manage the vacation rental?
Not if you don’t want to. There are plenty of vacation rental management companies that specialize in short term rentals. If you want a completely hands off investment, you can have that. These companies will literally do everything: advertise your home across all the different platforms like airbnb and vrbo, schedule cleanings between stays, address maintenance issues, collect payments, and field 2 am guest calls so you don’t have to!
What should I look for in an Austin area vacation rental?
Probably the most important thing to consider is identifying a property where you can legally operate as a short term rental. The City of Austin regulates the number of short term rentals allowed within the city limits. Currently there is a moratorium on permits for single family homes within the city limits. You can obtain a permit for condos in Austin, and you can also look outside of the city limits for opportunities. Next, you should consider the revenue potential of the property. You are looking for an investment property, right? Luckily, I can help you navigate the licensing requirements and evaluate the estimated rental projections for an Austin vacation rental.
If you’re thinking about investing in the Austin market, give me a call today. I’d be happy to guide you through the process, and fast track you to enjoying Margarita’s on the porch at your new Austin vacation home.
Erika Rae Albert
Sharing my Austin real estate updates, home owner tips, & more.