The Outer Banks is a hugely popular vacation destination.
Our population goes from 50,000 to over a million in the summer months. The uncrowded beaches and ideal summer climate keep them coming back year after year. This continuous pool of vacationers makes the Outer Banks a top choice for people or companies looking to build wealth through vacation rental ownership.
Here are 4 things to consider when selecting a home to use as a vacation rental investment on the Outer Banks, because they’ll affect the amount of rental income your home can generate.
1. Proximity to beach access
The #1 thing renters prioritize in a vacation home is how close it is to the beach. Renters will pay more per night or week to be “steps away” or within walking distance to the beach. Choosing a home as close to beach access, within your budget, should be a top priority. However, that location close to the ocean comes with an increased price and sometimes increased risk. If you don’t want to be, or can’t afford to be, super close to the beach, that’s ok. Consider the three things below.
2. Amount of bedrooms
The more bedrooms, the higher the sleeping capacity, which means more income potential. Bedroom count is such an established rental necessity that you’ll routinely find Outer Banks homes with, 6, 7, 10, sometimes 20 or more bedrooms, especially in rental-heavy areas like Corolla, Kill Devil Hills, and Hatteras. Income-driven owners typically choose to max out the bedroom count with small bedrooms versus less bedrooms but bigger. All other things being equal, a 2500 sq ft home with 5 bedrooms will have more rental income potential than a 3000 sq ft home with 3 bedrooms. It’s nuances like these that make our second home vacation market so much different than a more traditional primary residence market.
3. Amenities
One of the most sought-after amenities in a vacation rental is a private pool. You’ll have more renter interest and a higher rental rate with a pool than without, especially for families with kids b/c OMG kids love a pool! The same goes for an elevator. We have a lot of multi-generational families that vacation together, having an elevator is sometimes a must-have feature. These amenities come with higher purchase prices, so they may not be practical for all buyers. Be strategic with which ones you choose to have in your purchase, or which ones you choose to install later. Pro-tip: An experienced property manager can give you great counsel on how the addition of each type of amenity will affect the nightly rate, so you can choose the one most likely to give you the highest return in the future.
4. Wow factor
While proximity to ocean access, sleeping capacity and amenities are the three biggest aspects that dictate rental income potential, the “wow factor” is what motivates renters to book your home over the others and what keeps them coming back. People choose their vacation home based on online photos. The nicer it looks in photos, the more yours will book over similar homes. Choose finishes and décor that pop in photos – or that look clean and coastal. Then consider the rental experience once renters get to the home. If your renters arrive to a home with uncomfortable old furniture, deferred maintenance, a dirty pool, bandaid repairs versus real fixes, they likely won’t come back. Worse, they’ll leave a bad review. Make sure your guest experience is always top of mind, no matter how close your home is to the beach.
Learn more in this video. (Click Here)
