Why Single-Family Rentals are a Better Investment Bet than Vacation Rentals – HomeUnion

Why Single-Family Rentals are a Better Investment Bet than Vacation Rentals

Why single-family rentals are a better investment bet than vacation rentalsInvesting in rental property is a great way to diversify your asset portfolio and enjoy income while building equity in a property. That said, not all rental properties are created equal, and it’s important to evaluate what separates different rental investment opportunities.

Many investors are tempted to invest in vacation rental properties when they first begin investing. Vacation rentals are located in appealing places and give investors private vacation getaway options, but they might not be the best move if you want to see a big return on your investment.

Before you plunk down money on a vacation rental property, weigh the pros and cons of a vacation property investment against a single-family rental in a high-growth area. Generally speaking, SFRs have more upside for investors who desire strong yields.

The draw and risks of vacation rentals

It’s hard to deny the simple appeal of property in a popular vacation destination, but these houses may not offer monetary benefits in line with their emotional appeal. A vacation rental property gives the owner freedom, because they can use the property themselves and give access to friends, but it is unlikely to benefit from the consistent occupancy SFR properties in other areas enjoy.

The variability of vacation seasons makes it difficult to rent a vacation property consistently, and it’s hard to anticipate the annual interest in a particular vacation destination. With standard SFR properties, investors are tying their success to the housing market’s overall performance. When investors purchase vacation homes for rental, they have to contend with both the housing market and vacation trends.

An issue with either market can derail the investment and make it difficult to turn a profit. One of the great benefits of SFR investing is that rental income generally covers a property owner’s monthly mortgage payments. The inconsistent nature of vacation seasons and tastes makes it difficult for people who buy vacation properties to count on consistent occupancy, and as a result, they could spend many months paying the investment’s mortgage out of their own pocket.

Vacation Rentals Aren't Necessarily the Best Investment Properties

The importance of picking the right single-family home

Single Family Rental Property While single-family rentals are generally more consistent investments than vacation options, it’s important to find a home in a high-growth area with enough demand to ensure consistent occupancy. It can be difficult for investors to locate these areas nationwide, and it can be even harder to purchase and manage property that is located several hundred miles away. HomeUnion® simplifies this process and makes investing in single-family real estate as easy as buying stocks.

Registration on HomeUnion®’s website provides access to hundreds of pre-vetted rental properties in the best markets for rentals across the country. HomeUnion® uses deep data analytics to find areas that will give the best returns, and investors can easily purchase and manage homes thanks to HomeUnion®’s lending partners and network of skilled property managers.

Colin Jul 19 2015 - 9:10 AM
I'm interested in SFR, please send more info on how I can get started with your program. Thanks
    Pasha Manali Jul 20 2015 - 5:12 AM
    Hi Colin, Thanks for reaching out. I've forwarded your inquiry to my colleague who will be reaching out shortly to answer any questions you might have. -Pasha
Viren May 26 2016 - 3:36 AM
I am interest, please send me info
    Alisha Chocha Jun 13 2016 - 11:48 AM
    Hi Viren, We informed our Solutions team to reach out to you via email. A Solutions Manager will be contacting you shortly, if they have not already. Thanks for reaching out and have a wonderful day, Alisha at HomeUnion®
John Ferrell Feb 24 2017 - 6:15 PM
I like that you said that we need to learn the pros and cons of the property. If I was going to find a vacation property I would want to know that it would be the right investment for me. A professional might be able to help you find one that is good for you.

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