As recent times have proven, people won’t always be able to go on vacation, but they’ll always need a place to live. This is just one reason why it’s better to own a turnkey rental instead of a vacation rental. Myriad problems have emerged regarding vacation rentals on the market. When the COVID-19 lockdowns came into being around the world, people cancelled their vacation rental reservations en masse. Some vacation management companies, wishing to placate vacation rental owners, refused refund requests until pressed by outraged customers and ultimately, the media. But those bad refund experiences of the non-vacationers will likely remain ingrained in their memories; at least long enough for them to choose elsewhere for their vacation needs when the pandemic is over. If you’re looking to own property, a turnkey rental will give you a more peaceful life. Following are more reasons why you should own a turnkey rental over a vacation rental:
Turnkey Rentals Are Passive Income
You’ll have very little to worry about with your turnkey rental. Once a month, your property manager will deposit your tenant’s rent money into your designated bank account. Other than that, you can basically not think about your turnkey rental. Every once in a while, you may get a repair request that runs through your property manager. You won’t have to do any actual work; the property manager handles that end. But aside from that, owning a turnkey rental is entirely passive. The only thing you need to know about is the money side; money automatically deposited into your bank account each month, and occasional repair expenses. Not a bad way to live, right?
Turnkey Rentals Offer High ROI
You’re going to see a high return on investment with your turnkey rental from MartelTurnkey. Typically, you’ll get between 12-17% after fixed costs (including property management) and assuming a 20% down payment. If you doubt that, just check out our fully transparent online listings, like this one in Cleveland, Ohio. You can easily see that the ROI is 15% on this single-family turnkey rental. It’s hard to get those kinds of consistent returns with other investment assets, including vacation rentals. Remember, when you own a turnkey rental, you’re getting a paying tenant for a minimum of a year, while they live out their lease terms. With a vacation rental, you’re usually only guaranteed income for a week or two. After that, you need to market for a new vacationer, which is nearly impossible in today’s COVID-19 situation.
Your Tenants Are Vested and Vetted
In a turnkey rental, your tenants have a vested interest in keeping the property in good condition. After all, it’s their home. They’ll want to keep it clean and tidy for their family members to enjoy. This usually extends to the garage and/or yard if there is one. With a vacation rental, tenants have less reason to care about the condition of the property. They’ll be there only a week or two, so why should they bother tidying up? Also, they’re on vacation and won’t want to spend time dusting or cleaning floors. They may be partying, possibly tracking in sand and water, and maybe even inviting all their friends over for even more partying. Then they’ll take off, leaving you and your cleaning and repair crew to deal with the remnants of their vacationing. Too often, this includes serious damage like holes in the wall or nicks in the wood finishes. On the other hand, in the case of your turnkey property, the property management company conducts background checks to ensure your tenant has the ways and means to pay the rent, they conduct criminal background checks, and they collect a security deposit to cover any damage found upon leaving.
Vacation Rentals End Up Costing You More
Every time your vacation tenant moves out, you have to pay for a cleaning crew to get in there and make it nice for the next renter. If you’re lucky and you rent out your vacation property 40 weeks out of the year, that’s 40 times you have to pay a cleaning crew. That doesn’t sound very lucky, does it? With a turnkey rental property in your portfolio, you only need to worry about cleaning once a year at the most. And then, the property manager takes care of it, so you still don’t have to worry about it. Vacation rentals typically get damaged more than turnkey rentals, too. Vacationers aren’t going to go out of their way to inform you about little problems that can escalate into expensive repairs. Will they let you know about the missing shingles that lead to the roof leak that leads to the black mold behind the drywall? Nope. By the time you find out about it, your $20 shingle replacement has turned into a $5,000 new roof expense.
Pay More Taxes With Vacation Rentals
Here’s the real kicker about vacation rentals that no one tells you about beforehand. Did you know that many towns and cities charge vacation rental owners short-term occupancy tax? Sometimes they’re referred to as “tourism tax,”’ but the final result is the same; vacation rental owners pay more taxes than turnkey rental owners. It’s not a small amount, either. Some municipalities charge six or seven percent or even more. That’s not very appealing is it? In fact, for most smart real estate investors, that’s the final straw in a long list of reasons not to own vacation rentals. If you agree, then head on over to our turnkey rentals for sale page and find a turnkey rental that pays you money, not the other way around.
During this pandemic, vacation rental owners are suffering more than usual, with a cascade of cancellations, mortgage payments to make and a lot of bad press. Why put yourself through that when you can enjoy the enjoyable, passive income that comes with a turnkey rental? Interest rates are at their lowest point and you can lock in that rate for the life of your loan. Now’s the time to get in on the best real estate investing model that exists. Choose your turnkey rental today.