Buying an Investment Property
Investing in Vacation Rental Property in Fredericksburg
One of our great strengths as a real estate firm in Fredericksburg, TX is matching buyers and sellers of investment property. Fredericksburg is a thriving business community and opportunity abounds. One of the areas receiving the most attention from investors is our B&B or Vacation Rental Cottage market. Fredericksburg is known as the B&B Capital of the World! Well, around here at least! Per capita, the statistics are quite amazing with a reported 900 vacation rental properties in a town of only 10,000 residents! It is also interesting to consider that 47% of homes in town are not homestead. meaning they are typically investment properties.
Our sister company, Absolute Charm B&B and Vacation Rentals, is a reservation service representing over 200 rental cottages and suites. Accordingly, our access to real, factual data concerning Fredericksburg’s rental market is unprecedented. We don’t need to guess what would make a good rental. We have the data to prove it. We are also in the unique position of having relationships with so many owners of properties; so we know which ones are considering selling.
There is so much to consider when purchasing a vacation rental or any investment property. Here’s a quick run-down of some of the pitfalls we see buyers fall into most often:
3 Mistakes to Avoid when Buying a B&B or Vacation Rental
Purchasing an investment property, such as a B&B or vacation rental, is a big decision and we understand that it’s important to get it right. Let’s start by avoiding these common mistakes we see over and over:
- Ignoring Zoning– Few things are as commonly misunderstood in our business as zoning. It is critical that we insure that a potential property has the correct and LEGAL zoning for your purposes. For example, R1 zoning in Fredericksburg indicates residential, single family zoning. Generally speaking, R1 properties are allowed to have one B&B unit. R2 zoning is highly prized and allows multi-family or mixed use. In R2 areas, you may have several rental units on the property, depending on the size/density of the lot and the type of units. Zoning can be VERY complicated and hard to navigate even for those who have been on the Fredericksburg real estate scene for a while. This is our specialty. Give us a call to be sure the property you are looking at is legally zoned for your intended use.
- Confusing Your Goals– All clients are NOT the same. All clients’ goals for owning an investment property are not the same. One client is purely interested in earning the maximum possible return on investment. Another client hopes to spend several weekends and even holidays each year in their new property. Some clients want to maximize occupancy at all times while others prefer a higher priced property with lower occupancy to reduce wear and tear on what may end up being their retirement home. Which property is best for YOU depends on what YOUR goals are. That fact is easy to lose in the exciting shuffle of looking at charming properties.
- Focusing on What YOU Like– Seems reasonable, right? Yes, if you are one of those clients above who is really looking for a property to buy as a part-time rental, part-time family getaway. If, however, you are looking to purchase as a business investment you need to ask, “What would my paying GUESTS want?” Since we also own Absolute Charm B&B and Vacation Rentals, we are in the fortunate position of knowing EXACTLY what guests are looking for and what they will or will not pay extra for. If you don’t really care for hot tubs, but guests rate a private hot tub as their #1 desired amenity, does it really make sense to refuse to install a hot tub? Not if you are looking for maximum return.
There is no cookie cutter answer for each client. Everyone’s goals as well as their likes and dislikes are different. We understand that fact and are ready and able to find the right property that meets your unique needs. Doing a little homework now can avoid sitting in detention later! Give us a call today, and let’s begin your journey!