Make Your Vacation Home Earn it's Keep!
Jul 20, 2013
With the economy trying to claw its way back to normalcy and the housing market in North America still suffering, more and more people are turning towards investing in international real estate.
And we don’t mean the ever popular, retirement age ‘baby boomer’s’ either. Young professionals – single and married – are looking for alternate ways to invest their hard-earned dollars.
Enter, Latin America… a part of the world that is specifically popular for property investment – and only getting more popular. Some countries, Costa Rica for example, have been seeing an influx in foreigners snapping up land steadily over the past several years. Not only does this equate to a large expat population in Costa Rica, but also means that pockets of this beautiful country not previously popular are being discovered in an effort to provide competitive and affordable buying options. (Go HERE to learn about the Nicoya Peninsula and HERE to learn about the Southern Zone)
On the other hand, a country such as Ecuador is fairly new to the international real estate game. Although certain areas are already quietly popular, it’s a country that’s been gaining momentum for incredibly affordable property (Go HERE to learn about coastal Ecuador). But similar to Costa Rica’s success, it won’t last forever.
All that being said, this is an incredible time to hop on the foreign property train. Technology makes communicating with friends and family a breeze and with so much instability in other areas of investment, why not consider buying a home abroad?
Plus, in addition to making a smart investment, you’ve now got a ‘home base’ when you go on vacation! And as exciting as it is to have your own home in paradise, knowing that it can cover it’s costs and even make you money, is almost equally exciting…
These are just a few tips on how to get your vacation home to earn its keep:
Cast a (world) wide net – if you live in Canada or the US, don’t stick strictly to your backyard when sourcing renters. There are many people around the world that are just as excited about moving to or exploring Latin America. Not to mention all the people who choose temporary or full-time work in a variety of these countries.
Advertising your home to locals is often overlooked, but don’t forget to consider this lucrative avenue… with a combination of foreigners and well-off locals living in large cities (think San Jose, Costa Rica and Quito, Ecuador) away from the beaches, your vacation home is just as appealing to them to rent during holiday times as it is to those from outside of the country.
Buy in a gated community – by purchasing in a gated community you’re not only ensuring your home is safe and protected while you’re not there, but it’s a great feature to use to your advantage when securing renters. (Go HERE to read more about gated communities in Latin America) In addition, most gated communities will help you find renters and complete all appropriate paperwork and cleaning - all while you’re thousands of miles away. If you choose to have no involvement (other then receiving the rental income, that is!), that’s available to you when you own within a gated community.
Build with the rental market in mind – if you’re buying pre-construction (go HERE to read more about building pre-construction), and your primary reason for purchasing is to rent your home for most, or all, of the year, consider a complimentary design. Is your property in a popular snowbird destination? A bungalow with limited stairs is appealing to the retirement crowd. Near the beach in a family-friendly area? Plenty of sun-protected outdoor living space with grassy areas is a draw for those with children.
Market appropriately – renting your home, no matter whether in Latin America or North America, is a prospect that may have some homeowners running in the other direction! That being said, by targeting your advertising to specific groups you can have more control over who will be staying in your home; long-term renters? Weekly renters? Adults only? Family’s welcome (or not)? Pet’s welcome (or not)? The list goes on…
Although you will see a larger return on weekly rentals, especially during peak holiday times, long-term rentals may be more respectful towards your home, since they are essentially ‘living’ there, and not just ‘visiting’ for a week or two.
Owning a second home in Latin America is nothing like owning a second home in North America. For one thing, the initial cost is much more affordable for what you get then anything you could find in the northern hemisphere. But operating costs, maintenance and taxes are what are the real deal-breakers between this area of the world and North America. In Costa Rica, for example, annual property tax on a 2000 square foot home will be in the $300 range… and that’s within walking distance to the beach. And maintaining your pool, garden and home’s interior are equally affordable – from as low a $15 a day.
And once you’ve made the leap into foreign property ownership, not only do you have a piece of paradise to escape to, but you can set it up to potentially pay for itself! Don’t like the idea of being a ‘landlord’? No problem… by utilizing your developer’s property/rental management program, there’s no need for you to live anywhere near your vacation home.
All this being said, if you don’t already own property in Latin America, the first step is to head down! And what better way then on a Discovery Weekend.
Our developers have a variety of properties available, with some in prime locations for renting - easy access from the main road, walking distance to the beach, gated communities, nearby amenities, etc…