How to Select a Vacation Rental Property InvestmentDec 26, 2023
Successful real estate investors live by several fundamental principles. They have a winning mindset; they educate themselves about successful real estate businesses, and they make investments with the greatest potential for capital returns. But one strategy that should be key to any investor’s business is the value of a vacation rental property investment.
Unlike typical residential or commercial real estate investments, a vacation rental property investment attracts short-term renters. Tenant turnover is high because most renters stay for short periods of time. However, the income generated on a per-tenant basis is substantially higher. Provided you can bank on enough tourists, you can make a sizable return on your investment.
What is a vacation rental property?
A vacation rental property is a short-term accommodation, primarily marketed toward traveling tourists. People who visit a particular city will choose a listed vacation rental property to hang their hats on for the duration of their stay.
As one of the largest and most geographically diverse countries on the planet, Canada has no shortage of locales that are prime tourist destinations. Similar to how you research city population growth rates to invest in long-term rental properties, investigate the most popular tourist attractions to build your investment strategy.
Vacation rental property investment considerations
To build a thriving vacation rental property investment business, there are a few details you need to consider. The most important factor is to select the right location. Vacation rental properties should be listed in prime tourist destinations, so do your research before you commit to the strategy.
Additionally, here are some of the other considerations when selecting a vacation rental property as an investment opportunity.
Research zoning laws and regulations
Local real estate markets have their own zoning laws and regulations that investors must follow. There are often additional regulations for short-term rental properties in tourist markets, so make sure due diligence is conducted prior to submitting any offers on listed properties.
Lay out your operating budget for the property
The initial purchase price is only part of the capital investment you’ll need to make in your short-term rental property. You also need to budget for ongoing maintenance and property management fees. Since tenant turnover is more frequent on vacation rental property investments, maintenance costs will be more substantial, so prepare for those expenses.
Find a suitable property management firm
One trade secret to picking the right real estate investment is not to invest in your own backyard. As a property owner, you don’t need to be responsible for the day-to-day maintenance of your buildings, especially for vacation rental properties in niche markets.
To that end, find a local property management firm to handle upkeep in between tourist rentals. This will ensure your property remains clean and pristine for the next tourist who needs a place to stay.
Most profitable locations to own a vacation rental property
Everyone has their own tastes and preferences. A dream vacation for one traveler is very different from another person’s idyllic getaway. Remember that there’s no guarantee you can appeal to everyone all at once with one vacation rental property investment.
However, that being said, there are several Canadian destinations that are frequently cited as the most popular travel destinations for budding adventurers. As you build your vacation rental property investment strategy, focus on these profitable locations — geographically listed from west to east — to build up your business.
The capital of British Columbia pays quintessential homage to its British colonists, and the city is often dubbed as being more British than Britain. Situated on the beautiful Vancouver Island, Victoria is quaintly nestled between the Salish Sea — a natural body of water that separates the island from mainland British Columbia — and the majestic rainforests on the island’s west coast.
Beautiful, charming, eloquent, and artsy; Victoria has a reputation as a magical paradise. Tourists love to explore the scenic coastal attractions and find a spot near the Pacific coast to do some whale watching. The city’s budding supply of local shops and craft breweries elevate Victoria near the top of any traveling foodie’s go-to destinations.
Located a 5-hour drive up the Trans-Canada Highway from Victoria is the town of Whistler. Home to North America’s largest ski resort, Whistler was named by Trip Advisor as the best place in the world to ski or snowboard.
Situated at the base of two imposing mountains, Whistler is a pedestrian-friendly village with a down-to-earth culture. The town prospers from visiting tourists in both the summer and winter seasons. Whistler may primarily be known as the dream winter vacation, but its mountains are repurposed for mountain biking and ziplining adventures during the warmer seasons.
Banff is one of only two Canadian municipalities situated within the borders of a national park — neighbouring Jasper is the second. Located at the base of Cascade Mountain along the eastern edge of the Rocky Mountains, Banff is surrounded by some of the most breathtaking lakes and natural wonders in the country.
There are 3,700 listed vacation rental properties in Banff, and the community boasts a 90% occupancy rate. Over 4 million people visit Banff and Banff National Park every year, so there’s no shortage of opportunities to make sustainable rental income from a vacation rental property.
Perhaps the most recognizable tourist attraction in all of Canada is Niagara Falls. The Horseshoe Falls is the largest waterfall in all of North America. Thousands of litres of water flow through the Niagara River over the Horseshoe Falls down into the Niagara Gorge below. The river itself is the natural connective tissue between Lake Erie and Lake Ontario.
Millions of tourists visit the Falls every year to witness the free-flowing water pass over the Falls. Situated next to the landmark is Niagara Falls, Ontario, which is home to hotels, casinos, shops, restaurants, and more cultural amenities. Niagara Falls is consistently listed as one of — if not the — most popular tourist attractions in Canada. If you want to earn money from a vacation rental property investment, this is a location to take under consideration.
Home to some of the earliest settlements in the nation of Canada, Quebec City is rich with culturally significant historical sites. Whereas Victoria is a community that pays tribute to Britain, Quebec City is an unabashed homage to its initial French settlers.
The most popular part of the city is Old Quebec near the base of the St. Lawrence River. Designated a UNESCO World Heritage site by the United Nations, Old Quebec has some of the oldest shopping streets in all of Canada. The neighbourhood is most identified by the Chateau Frontenac, which has a unique architectural design that attracts tourists who don’t even stay in the hotel.
Cape Breton is situated on the eastern edge of Nova Scotia, and the island is connected to the mainland via the Canso Causeway. Cape Breton contains elements of both British and French history, specifically the national historic site of Louisbourg. The capture of this settlement by the British marked the beginning of the end of New France in Canada.
History buffs travel to Louisbourg to learn more about the history of Canada. But it’s the Cabot Trail along the northwest coast of the island that attracts most tourists. The Cabot Trail covers hundreds of kilometres that provide unforgettable oceanic views juxtaposed with humble fishing villages. The nearby town of Sydney often serves as a host to travelling adventurers, so a vacation rental property investment in the bustling town is a perfect location to reap returns.
Uncover trade secrets of real estate property investments
Vacation rental property investments can generate substantial returns on your initial investment. Many investors will add select vacation property rental investments to their portfolios and substantiate income generated from long-term multifamily property investments.
Building your own real estate empire is a rewarding experience when executed in the right manner. To avoid the pitfalls and mistakes made by inexperienced investors, you can go much further in your journey by joining one of the fastest-growing real estate investment communities across Canada.
Led by successful real estate investors in their own right, you’ll learn trade secrets of successful investing from mentors who have done it all themselves. Along with secrets to make vacation rental property investments profitable ventures, you’ll also learn about:
- How to spot key market opportunities to grow real estate investment values
- Savvy investment tactics to spot the winners and avoid the losers
- Tips to secure financing and expand your portfolio of assets
- Negotiation tactics to acquire your dream properties
Don’t wait for another second! Join the fastest-growing real estate investment community today and transform your investment dreams into your lucrative way of life!
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