Five Questions to Ask Yourself Before Investing in a Vacation Rental

Outer banks nc real estate

Are you interested in Outer Banks homes for sale as a vacation home and to generate some income while you are in it? The beauty and atmosphere of North Carolina beach towns make it an appealing place to visit, for both you and potential renters. If you are looking at Outer Banks homes for sale though, it is important really consider the pros and cons to make sure it is a great investment. Before signing the dotted on any Outer Banks homes for sale (or any vacation condos for that matter), ask yourself the following questions:

  1. Can I afford to have my money tied up in Outer Banks homes for sale?
    Some investments — such as stocks or precious metals — are fairly liquid and simple to convert to cash if you needed it quickly. Real estate investments are not like this; when you decide to flip your vacation home, it might sit on the market for weeks or months. It is also hard to predict what the market will look like on a specific time frame, if you didn’t have time to sit on the property until it gains value.


    Investing in vacation properties is a great way to keep an asset in your portfolio that generates some income (or maybe just pays for itself) and gives you a free place to stay when you visit a place you love, but you need to make sure you aren’t biting off more than you can chew.
  2. Do I understand the rules of the property I am interested in?

    Not all Outer Banks homes for sale make good vacation properties. In fact, the area that the home is in sometimes bans renting the property out at all. It would be a giant bummer to invest in a vacation property, only to find out that the it can only be utilized as a permanent residence. This is a simple factor to look into, which can save you an enormous disappointment and hassle once you have the keys and mortgage payment.
  3. Have I considered all of the ongoing costs associated with the vacation investment?
    The mortgage will only be part of the cost of owning a vacation property. You might be subject to additional expenses like HOA fees, resort surcharges, grounds keeping and maintenance, and cleaning between guests. In addition to that, you will definitely have to pay for insurances an property taxes. These expenses are typically rolled into the rental fee that your tenants pay, but you need to consider the total cost of ownership when you don’t have tenants, to make sure you can cover the cost.

  4. Am I being realistic with my expectations for this investment property?

    If you purchase your vacation home in a location that is difficult to get to and you don’t manage to visit much, it might not really be worth the effort of owning it. Yes, it holds value and generates income, but that money might be better invested elsewhere if you aren’t able to enjoy it yourself. Not to mention, in the times you don’t have tenants, you really don’t want the property sitting vacant for long.


    While considering Outer Banks homes for sale, realistically consider how often you will be able to visit your beach property and make sure the work you are putting into owning an Outer Banks home is worthwhile for your needs and lifestyle.
  5. Do I have a game plan for what I’m going to do with my vacation property?
    The investment required for vacation rentals don’t lend themselves to “figure it out as you go” type of planning. Consider if you want your investment to be managed by a property management company or not. If you want it to be advertised on websites like VBRO, or another management system.


    Creating a strategy before you are knee-deep in vacation home logistics will help you with decision making and getting money out of it as soon as possible. You can always shift plans around down the road based on what is and isn’t working down the road.

Do you any advice on the subject of investing in a vacation home? Please share in the comment section below!

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