If you’re considering an investment property, one of the first things you’ll want to think about is location.
While 66% of our owners bought their vacation homes outside of their hometown, a full third of owners choose to live right around the corner from their vacation rentals.
We often get asked about the best places to invest, and buying near your current residence is an option well worth considering. To help you decide which investment option is best for you, we’ve unpacked the best (and worst) parts of buying your rental close to home.
The Local Advantage
We know a lot of owners who specifically chose local properties so they could manage them and stay engaged with the vacation rental process. It’s a popular option for retirees and full-time investors, and here are just a few of the reasons why.
Put in Some Sweat Equity
When you initially purchase your property, you’ll probably have a few changes you’d like to make, such as updating fixtures, giving it a fresh paint job, or changing the flooring.
These can all be accomplished in one fell swoop if you have the overhead, but living nearby makes it possible to tackle your upgrades and renovations one step at a time. If you’re a DIY sort of person, you can save money doing your own renovations – we know lots of owners who enjoy working on their properties as a hobby.
It’s also a great way to gradually add on features to your property that make it more appealing to guests – or even to yourself. We know of one owner who sold his primary residence and retired to his rental property after years of gradually turning it into his dream home!
Interact Easily with Your Guests
One thing many owners love about living close to their vacation rental is the amount of contact and personalized service they’re able to provide their guests. You can meet them at the door with the key, lay out some linens, or even stock fresh flowers to give them that cared-for feeling right from the beginning.
Meeting the guests also helps you to be sure your house rules aren’t being violated, as you can see at a glance that the party is indeed a party of 3 rather than a party of 18, and that they didn’t bring their pets along to a pet free property. If you like meeting and greeting your guests, a local rental might be a great choice for you.
Check Up on Your Rental Anytime
Your rental is a big investment, and opening it up to strangers can be stressful. Owners who live locally have the peace of mind of knowing that they can check on their property anytime if they get a noise complaint from a neighbor or see that their smartlock has been triggered with the wrong code.
Being able to check on your rental before the guest’s stay also has advantages. At a distance, you have to rely on the word of your local cleaning service or a property manager to be sure your property is ready for a guest’s arrival, and if the guest has a complaint, it can be difficult to determine what went wrong. Local owners feel more secure that the property is always presented just as they would wish it to be.
Enjoy Hands-on Upkeep
If there is a maintenance issue during your guest’s stay, you can resolve it that same day – with some in-person apologies to smooth over any inconveniences on their part. After your guest leaves, you can easily access the property yourself to perform the post-stay inspection and assess any damage or maintenance you’d like to resolve before the next guest’s stay.
Get the Advantage of Insider Knowledge
If you buy close to home, chances are you’ll find it much easier to select the perfect location for your rental. It’s harder to know which are the good and bad neighborhoods when you don’t live in the area!
Local proximity allows you to check out a potential rental’s:
- Noisiness: You’ll already know which areas of town are consistently noisy, but being a local means you can spend a day hanging around your potential investment to see if there are any intermittent yet disruptive noises (such as trains) that might be a problem for guests.
- Accessibility: Being on the map doesn’t make a location easy to get to, and seasonal changes in roads can make it tough to tell how travel to a property truly is in a new region. Your local knowledge tell you whether that cabin 5 miles up the canyon is a 10-minute drive to town or a 30-minute one.
- Safety: While there are maps and statistics detailing the safest areas, you want you guests to feel safe. Being able to regularly walk the neighborhood gives you a better idea of how comfortable a visitor would be with the general environment.
When Distance Is Better
While we can think of a lot of great reasons to invest locally, it ultimately comes down to what you want out of a vacation rental – and for some, distance is the best part of owning a second home. Here are a few reasons why local may not be a good fit for you.
Your Local Market is Expensive or Low-Demand
If you choose only to buy close to home, you’ll find yourself boxed in to accepting both the benefits and deficiencies of your region. Two of the major hang-ups for investors are:
- Expensive Areas: In some cities and towns housing costs are so high even renting can seem like a huge investment, putting the possibility of buying out of reach.
- Low Demand: Many beautiful regions are just not on the map for most travelers, making seeing the return on vacation rentals there more difficult.
If you live in an area that’s too expensive for most people to buy in or one that doesn’t see a lot of travelers, it may be a good idea to follow the numbers and invest in a well-priced yet in-demand destination.
You’d Rather Get Out of Town
One big benefit of owning a vacation rental is getting to use it yourself once in a while! If you’d like your second home to serve double duty as an investment and a vacation destination, buying local may not be the best fit for you.
Vacation rentals often serve as a pleasant excuse to get out of town with their friends or family. If that’s part of your ultimate vacation rental dream, we’d recommend investing in your favorite destination instead.
You Have a Hard Time Being Off the Clock
When you live down the street from your rental, it can be hard not to feel obligated to become involved in-person. If you enjoy that level of engagement, then local rentals are great – but if you’d find that responsibility stressful, you may want to put a little distance between you and your rental.
If you’re the sort of person who always needs to handle everything yourself, you may find it difficult to relax when your rental is right around the corner – and that stress takes a lot of the fun out of owning a second home.
Considering that excellent vacation rental management services can be had for as little as 10%, getting a little physical (as well as mental) distance between you and your rental may be a better fit for “always on” personalities.
The High Points
At the end of the day, it comes down to why you want a vacation home – and what would give you the most satisfaction in ownership. Here’s our bottom line on what type of owner is best suited to a close-to-home or longer-distance investment:
You may want to consider a close-to-home rental if…
- You have the time to dedicate to providing on-the-ground services
- You enjoy getting to know each guest, and don’t mind being on-call
- You live in an affordable area that is also a popular travel destination
You may want to consider owning elsewhere if…
- You have many existing demands on your time and you’d feel obligated to handle nearby issues
- Your area doesn’t see a lot of travelers, or is very expensive to invest in
- You wouldn’t enjoy making use of your local rental yourself
What do you think?
Do you have experience owning a rental close to home or in another state? What are the most fulfilling parts of your proximity to (or distance from) your rental? Let us know in the comments!
Considering a vacation rental investment, but feel uncertain about how to take the first steps? We often work with first-time owners and help them navigate their first year – often while making huge profits right out of the gate. If you’d like to learn more, click here for an overview of our services, call a Homeowner Consultant at 877.818.1014 (press 2), or check out a case study to see how we helped this first-time owner make the most of his investment.