Owning a home in Phoenix, Arizona is a great investment. Aside from enjoying the beautiful winter months, there’s a reason why tourism is a big deal here. With plenty to do and consistent, manageable weather, Phoenix is becoming one of the fastest growing cities in America. Living here as a homeowner, presents you with quite a few opportunities. If you’re reading this article, you’re already considering the benefits of renting your home as a vacation rental property.
Even if you don’t live in the Valley of the Sun year-round, making the most of your property can be rewarding. Although some discourage homeowners from renting, if done right, the return can maximize your investment.
Vacation Homes vs Long Term Rentals
As you well know, opening your home as a residential rental property can be risky. With every annual agreement, you take the chance of the property getting severely damaged. In addition to hiring a professional cleaning service like us, you may have to deal with insurance claims, home warranty issues, long term contract language or even criminal activity! A year’s worth of filth can turn into a headache over night.
This is why so many of you turn your focus to Arizona visitors and vacation rentals. Besides being easier to manage, you’re able to have more control over the property while charging a premium for hospitality. Even if you’re planning to sell at some point, routinely renting your house as a vacation property still allows you to maintain the current value of the home while upgrading along the way. So, let’s look at a few benefits..
1. Gradual Home Improvements.
Reinvesting profits is one of the smartest things you can do as an investor. This is no different when it comes to home ownership. If you’re sitting on your property because you don’t want it to lose value, strategically renting it periodically can be very beneficial. Vacation rental revenue gives you additional capital to make improvements to the home while you wait for the right time to sell. You’d really only have to rent your property a few times a year, during premier Phoenix events, to earn some serious spending cash!
If you’re uneasy with renting your home to complete strangers, think about the difference one week can make. Start itemizing upgrades you’ve considered in the past and determine if the risk is worth the reward. In most cases, it will be. The market is demanding right now and getting ahead of the curve should interest you. You might be content with the real estate rise, but remodeling your property to stand out is a smart investment. When it comes time to sell, a remodeled home is much more appealing than renovation processes and costs. The best part is the simple fact you’re using money you wouldn’t normally have. It’s a win-win!
2. Current Mortgage Owners Earn More.
As the residential market continues to climb in Phoenix, the time to buy is now. People that already own a mortgage in Central Arizona should be really excited about the market returning to where it was before the crash. Current homeowners have the advantage in vacation rental because interest rates are increasing for new buyers. In other words, their mortgages are more. New buyers are forced to list their rental properties higher in order to break even. Since you have less costs, you can position your vacation home just under your competition. There are a few perks to this.
Doing so helps you rent your property faster and gives you leverage during the underwriting process. You can afford to say no to unqualified renters and lease your home in confidence. Keep in mind, reinvesting in home improvements after the first few rentals will allow you to earn even more! Most investors simply purchase a bunch of homes and sit on the reoccurring revenue while value drops. When you’re purposeful with your investment, the value and appeal of your vacation property increases. Continuing to build on this momentum allows you to maximize your return while giving you additional capital to plan for retirement or enjoy the finer things in life.
3. Routine Paid Vacations.
One of the biggest benefits of renting your home as a vacation property is the freedom to travel. Like we mentioned in a previous article, traveling during rental dates is a great way to enjoy yourself on someone else’s dime. Planning out rental dates also allows you to strategically plan your vacations. Although making upgrades prior to treating yourself is smart from an investment standpoint – it’s always good to get away without breaking the bank.
4. The Fruit of Hospitality.
The initial thought of renting your home can be intimidating and even overwhelming. At the same time, there are some benefits that aren’t measured monetarily. Every year, thousands of people visit Phoenix for the first time. Most of them aren’t aware of the landscape. Owning a home here makes you an expert on sights, happenings and local treats. Renting your home as a vacation property allows you to be a part of guest’s experiences.
Before they arrive, you can personalize their stay by highlighting recommendations and different events during their trip. Most people value personal referrals over online reviews. Aiding your visitors with their trip leaves them with a memorable impression. Meeting new people and knowing you played a positive role during their trip gives you a level of satisfaction as well. In turn, you’ll receive raving reviews which allows you to be firm with pricing moving forward.
Conclusion
As you can see, the benefits of renting your home as a vacation property in Phoenix are greater than the negatives. If you play your cards right and avoid desperation, the end result can be very fruitful. Aside from the obvious financial reward, there are plenty of elements of the experience that are appealing. As you progress with your decision, remember to have a transition plan in place before going all in. Making sure your home is maintained, safe and clean is an important part of managing a vacation property.
Our professional, detailed approach gives our clients a peace of mind that’s unmatched in the industry. We have a high level of integrity and enjoy building relationships with homeowners that appreciate this. It can be tempting to invest in affordable otpions, but when it comes to your home, quality should always be a priority.
Thanks for reading and best of luck with your new venture!
