Is it Possible to Use a Retirement Home as a Rental Property?
Owning a second home is a luxury that not many people can afford. Even owning one home is a major success. But if you’re one of the lucky ones, investing in a second home is one of the best things you can do for your financial portfolio. In fact, purchasing a second home doesn’t just raise the chances of stability during retirement. It can also provide you with an income right now.
Using a second home that is meant for your retirement has the potential to earn you a significant side income. You might even be able to earn this income passively if you hire a property manager to take the reigns on renting out the property. Depending on your location and the amount of effort you put into renting out the property, your second home can even earn you a liveable income.
Consider Your Local Laws First and Foremost
It is important to keep in mind that not every second home or retirement property can be used to earn an income. It depends on where you live and the laws in your local jurisdiction. Take the city of Denver, Colorado as an example. The city recently passed very strict laws regarding Airbnb rentals.
Many Airbnb hosts in Denver have been forced to shut down their homes to guests. This is mainly because the new laws state that short term rentals are only legal for property owners living in or attached to the rental property. The Airbnb laws in nearby Seattle, however, are entirely different.
Consider renting out real estate the same way you would think about online gambling. In some areas of the world, online gambling is entirely legal. In others, it is not. Just as some local areas have access to skycity casino online and others do not, the same goes for renting out real estate to vacation guests. Just be sure to consider your local laws before renting out a second home.
Tips for Successfully Renting Out a Retirement Property
If you are lucky enough to live in an area where short term rentals are allowed – and you’re lucky enough to have a property to rent out – it’s time to get started. Even if you have a full-time job elsewhere, a retirement home should not be left empty when the potential for making money is there.
Hire a Professional Property Manager
The first helpful tip when it comes to successful property rental is to hire a professional. If you have time on your hands and a patient personality, renting a property out on your own is entirely possible. However, the best way to do it is to hire someone who knows exactly what needs to be done for generating a rental income.
Most property managers are paid based on how much income the rental property generates. This fee depends on the specific profession as well as the services offered. Generally speaking, you’ll have to pay your rental property manager between 15 and 22% of the property’s income. This may seem like a lot, but if it means that you get to sit back and relax while making money, investing in a property manager is well worth it.
Location Means Everything
If you’re in the market for a second home and haven’t actually purchased on yet, be sure to focus on location before anything else during the buying process. When it comes to rental properties, it’s all about location, location, location.
Considering location isn’t just important if you plan on renting out a property. It can also affect the resale value if you choose to sell the house in the future. Ideally, your rental property will have a lot going for it in terms of location. This is the first consideration made by potential guests, no matter where in the world they’re traveling to.
Rental Homes Are All About Personality
One of the main reasons that travelers are opting to stay in rental homes rather than hotels is for the “homey” atmosphere. Hotels are bland and generic, while rental homes act as a comfy home away from home. Not only is it OK for your personality as a property owner to shine through in the home, but it is also in your best interest.
Although it is not recommended to have personal photos and items all around the home, it is completely OK to add your own personal style. If you feel that you don’t have any personal style when it comes to interior design, don’t be afraid to hire a professional.
All in all, renting out a vacant retirement home is an amazing idea. Not only can it generate a solid income, renting out your second home is an amazing way to stay busy. It might even turn into a lifelong passive income opportunity.