Short Term Rental Riches 116. Luxury Vacation Rental RISK - Is This the Right Investment For You?
Feb 1, 2022
Delve into the world of luxury vacation rentals and the unique risks they carry. Discover essential principles for evaluating these investments, including break-even occupancy and the importance of emergency funds. Learn how to assess your financial readiness and why backup plans are crucial. Gain insights into navigating regulations and the potential for long-term rentals in case of market fluctuations. This insightful discussion encourages mindful investing while you'll dream of chic properties!
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Luxury Rental Anecdote
- A friend of Tim Hubbard rented a $1,500 per night luxury vacation rental with his family and another family.
- They found a $3 million off-market property for sale and considered buying it as partners for investment.
Vacation Rental Financing and Renting Insight
- Financing is harder for large vacation rentals, limiting buyer pools and resale ease.
- Renting out large luxury vacation rentals long-term is less feasible compared to smaller city units.
Recession Impact on Luxury Rentals
- Luxury vacation rental demand shrinks significantly during recessions as families cut unnecessary travel.
- Smaller, more versatile rentals have better long-term rent potential even during economic downturns.