When investing in real estate, vacation rental properties are amongst the best options. Vacation rental properties are investments in your personal and financial growth. You’re diversifying your assets, gaining tax benefits, and increasing your overall income. Vacation rental properties are also skyrocketing.

As people begin to travel more as the pandemic settles down, they’re turning to rental sites such as Airbnb and VRBO more than ever. Vacation rentals are increasing by 70% each year. Even though the pandemic, vacation rentals increased as people sought spaces outside of their homes to escape.

It’s important to remember that investing in a vacation rental property is still hard work and can be a costly investment. According to All Reverse Mortgage, many investors use alternative financing methods to fund initial investments, such as a reverse mortgage, merchant advance, and peer-to-peer lending.

To ensure you make money off your investment, you need to hire a proper management team, look into locations that fit your wants and are still profitable vacation rentals, and understand the commitment you’re making. That taken into account, vacation rental properties were in demand during covid and continue as people travel further from their homes than they felt comfortable doing so during the peak of the pandemic.

In April of 2021, the US surpassed the new booking record which was held in 2019. With all your ducks in a row, investing in a vacation rental property will be beneficial to your way of life. Below, we highlight five reasons you should invest in a vacation rental property.

Earn Extra Income

The opportunity to earn extra income from your vacation rental property is available to you even in the early stages of your ownership, that is if you know what you’re doing. 2021 has the highest average annual revenue for short-term vacation rentals, which means a rental under 30 days. It reached $56,000 at the end of 2021, and in short-term rental markets, the average cash-on-cash returns hit nearly 10% per year.

Buying a vacation rental in a desirable location, offering amenities, and keeping a pristine reputation allow you to charge a high nightly rate. Note when your busy seasons are and create promotions for your slow seasons. Learning how to capitalize on your property specifically will help you earn as much as you can off your vacation rental property.

Vacation Rentals Appreciate

Real estate appreciates faster than inflation, making it a great investment to see your money grow over time. The National Association of Realtors recently reported the housing market had its best performance ever in 2021, even amid the pandemic. Before purchasing your rental property, have it appreciated to see the potential value in the property. Also, any additions, modifications, or upgrades you make will add to the value of your vacation rental property.

Vast Market Opportunity

Vacationers favor travel locations all over the United States, giving you a large market of opportunity. Those who are interested in vacation rental properties that offer major profit potential can find one within nearly any market in the US. Before purchasing a vacation rental property, do research into locations you’re interested in and the type of rentals available there. Maybe the beach getaway you’ve been dreaming of purchasing a place in is in dire need of a new vacation rental.

Diversify Your Investments

Diversifying your investments can benefit you greatly. You never know what the future holds, when an emergency could happen, or if a major world event may occur that shifts the economy. Look at the past three years as an example. Ever since the beginning of the pandemic people’s stock portfolios have taken a rollercoaster ride, losing much more than they gained in years prior.  By investing in a vacation rental property, you can diversify the type of investments you have, which can cushion you and your family in emergency circumstances.

You’re Investing In Your Vacations

When you own the vacation rental property, your vacations can be more effortless than before. A significant number of vacation rental property owners have chosen to have their vacation home within a two to six-hour drive from their home. This gives you a quick and direct path to get there and enjoy the fruits of your labor. It also doesn’t hurt that you’re building wealth on top of the memories that come from vacation.

Staying at hotels can be costly and cumbersome. Your vacation rental home offers the opportunity to When looking for a vacation rental property, think about investing in a place that you would vacation at because then you will. People also use it as a retirement goal, with the aim being to move to their vacation rental property permanently once they’ve made enough money from renting it out.