1. Location, location, location – When it comes to vacation rental properties in the Grand Strand, location is a big deal if you want to attract guests who will pay a premium for your rental. Beachfront homes and condos are going to be the top attention-getters from the vacation rental crowd. While some other locations around town are also in demand, such as The Market Common, make sure you discuss the pros and cons for any location you are considering with your realtor.
2. Would you rent it? – When making such a major investment, it’s important to ask yourself if you would be happy renting the property for your own vacation. If the answer is no, make sure you are prepared to make necessary upgrades to change that no to a yes. If you wouldn’t be happy staying there for your own vacation, chances are that not many guests will be either.
3. Plan for maintenance costs – Any kind of rental property will have higher maintenance costs than your primary residence. This is especially true of vacation rental properties. With new guests coming and going almost weekly, things will wear out, break, need replacing or repairs. Be prepared to maintain your vacation rental as reviews citing a rental in disrepair will cost you in total bookings and can lower the rental price you can command. Also, keep in mind the turn-over between guests and plan for those cleaning and turn-over service costs as well.
4. Consider insurance costs – Many vacation rentals require special commercial insurance because it is an income-generating property. The insurance cost for properly covering a vacation rental can be significantly different from the homeowner’s insurance policy you pay for on your primary residence.
5. Mortgage requirements are different – When buying a second home or investment property, the requirements to obtain a mortgage are different than you likely experienced with your primary residence. Homebuyer assistance programs are typically not available for second homes and the lender will want to see that you can afford to cover the mortgage for both properties, even if you have a lull in income from your vacation rental property.
Myrtle Beach and communities along the Grand Strand are a great place to make an investment in a vacation rental property. The key is to plan ahead for the costs of upkeep and maintenance, as well as understanding the insurance requirements. Of course, location is a big factor so make sure you and your realtor are on the same page about where you’d like your new investment to be.