Fact: The vacation rental industry is expected to earn USD$82.78 billion in revenue globally in 2022, with most of this income coming from the US, amounting to USD$18.630 million in 2022. This is according to a Statista report that was recently updated in July. 

What does this mean to vacation rental owners and potential investors? The answer is simple—there's no other perfect time than now to delve deeper into the lucrative industry of vacation rental investment. But before you put all your money into such an endeavor, you might want to take a step back and keep in mind that, like any other business, this investment also has challenges and risks. 

So, it makes sense to research and understand what your property investment entails to minimize such risks and challenges. That said, here are four vacation rental investing tips that could potentially help beginners like you in navigating such a complex yet promising venture: 

1. Decide on a location 

When you research anything related to real estate investment, the location is always on the list. This is true as well when buying a vacation rental property.    

Location is a critical aspect that affects a property's value. A property can be improved and renovated, but its location is permanent and can no longer be modified. That's why it should come as no surprise that location is the first consideration when looking at possible rental investments.   

A 2022 Global Vacation Rental Report revealed that urban areas are expected to develop at a rate of 111% over the next year compared to rural areas, as predicted by property managers. If you're wondering where to look for your first rental property, this might be the cue you need. Consider properties with a seasonal appeal, desirable weather, and immediate access to nearby attractions. 

2. Research a foreign country’s real estate laws

Maybe you've been in a foreign country recently, loved the island where you stayed, and are considering investing your money in that area. Before you do so, carefully assess and think that countries don't have the same rules and laws regarding property ownership and title.   

For instance, buying a property in Mexico can be different because there are certain areas where the land is leased, which means the government allows Mexican Nationals to use that portion, but it is not for private sale. If you decide to invest in another country, read and understand their laws and regulations on land and property ownership. Doing so could save you a lot of hassle, risks, and unnecessary costs that could've been easily prevented or avoided.  

3. Make your rental marketable 

Even the most brilliant marketing strategies won't work for your property if the rental itself isn't marketable enough. You must invest in the right amenities and features to make your vacation home attractive or appealing to your target market. You may need to design, renovate, redecorate or refurnish the property to ensure it gets in front of as many travelers and renters as possible.   

One of the simplest techniques to generate income from your vacation rental is furnishing a lovely area for visitors. This improves both the guest experience and your marketing efforts. As for the latter, this can work if your visitors upload pictures of themselves on your property on various social media platforms. 

Adding thoughtful touches and creating intimate spaces can go a long way in making your rental a standout option for renters. Moreover, you can take advantage of areas you can transform into something more beautiful, such as a porch, a sunroom, or a reading nook that you can upgrade to make guests feel pampered. The idea is to make renters feel as if they never left their homes in the first place, which can lead to them respecting your property and treating it as their own.  

4. Consider hiring an efficient property manager 

Being a vacation rental property owner means you'll be responsible for several tasks involved in running the business, such as managing and marketing the place. You're also in charge of the place's cleanliness and maintenance after every renter checks out to ensure it's ready for the next guest. If you don't have the time and skills for these tasks, it's best to hire a property manager who can take the load off your shoulders.  

Hiring a property manager is wise because they plan and execute operations and know how to maintain the property. They can secure property rentals through promotions and filling vacancies, enforcing leases, and managing and safeguarding premises. In addition, they determine rental rates by assessing the market's current rates and calculating overhead expenses, inflation, taxes, and profit goals.  

The bottom line 

Owning a vacation rental can be a good investment, but only if you do it right. As a beginner, it helps to research well so you know exactly what you're getting yourself into. You can utilize the tips mentioned above to help you understand how to navigate the world of vacation rental investment.