A Beginner's Guide to Owning a Luxury Vacation Rental Property
With the massive success of Airbnb, vacation rental properties are popping up frequently in every market. For luxury property owners who only visit their residence a few times per year, a lucrative return on investment is on the table. Luxury real estate offers some of the best opportunities as vacation rental properties.
Set up correctly, they can attract regular guests and make your home a magnet for the wealthy during their time off.
What Makes Luxury Real Estate Different?
Naturally, you’d assume that a price tag is all that differentiates luxury real estate from your average home. However, with Canada’s rising housing market, what’s luxurious and what’s just really expensive can easily get muddled. This is especially true for already expensive locations in BC, where a million-dollar home could be considered entry-level.
A great way to tell if a property could be considered a luxury home is whether it has unique or exclusive features:
Mountainside/lakeside/waterfront views
A waterfront location
Prime location (i.e. center of the city, situated at the top of a mountain)
High square-footage
The property uses premium materials or has cutting-edge systems like a self-sustaining power grid from green energy
Unique designs
Decadent amenities like home movie theatres, tennis courts, or swimming pools
Prestige (i.e. it was built by an esteemed architect or owned by a celebrity)
How You Can Invest in Luxury Real Estate Through Vacation Rentals
One of the easiest ways to break into the luxury real estate market is through vacation rentals. However, there are some essential things to consider before you capitalize on this opportunity.
Firstly, vacation rental properties are at their most successful in an area with a strong tourism market. Kelowna - and the Okanagan as a whole - is one of the best locations in BC, thanks to the myriad of options for tourists that the area offers year-round.
Second, it’s important to understand that if you’re investing in a luxury vacation rental, you’re purchasing the home to be most attractive to your potential guests. As the owner of a luxury home seeking a lucrative return on investment, you are looking for a property with the potential for long-term gains.
What to Do Before You Invest in a Luxury Vacation Rental
DECIDING ON A LOCATION
Now it’s time to do your homework. Above all else, location will be the most important factor in choosing a luxury property to turn into a vacation rental. You must consider the city, how close the property is to amenities, and the number of features listed above that the home offers.
UNDERSTANDING THE RHYTHM OF VACATION RENTALS
Unlike residential rental properties, vacation rentals tend to have an ebb and flow to them since people aren’t signing year-long leases. In the Okanagan, this translates into high periods of significant income during the spring, summer, and late winter months, with slower periods during the fall. Luxury waterfront properties will be at their most popular during the summer, while property near ski resorts will naturally be most popular during the winter.
MARKETING YOUR LUXURY RENTAL PROPERTY
Lastly, how you advertise your property will have an impact on your investment. Getting this right can be tricky and time-consuming in an effort to attract the right people. Our services ensure that your luxury vacation rental is managed and marketed efficiently so that you can watch the profits roll in.
Is your property a good fit for our portfolio?
Let’s set up your luxury vacation rental! Contact Deana Steele using the button below to learn more.
