It is an enticing prospect: buy Cape Cod real estate, rent it out to vacationing families, build equity while the home appreciates, and make a profit.
The consistently high level of Cape Cod tourism has encouraged more and more people to devote time and money to buying and maintaining Cape Cod vacation rentals.
Whether you’re renting to year-rounders, seasonal tenants or weekend warriors, there is currently an excellent opportunity to profit from a real estate investment here.
Planning and carefully researching this type of investment is of the utmost importance. Below is a short buyers’ guide to hot Cape Cod vacation rentals and a few tips on what to look for when investing in real estate here.
Choose a Home with Plenty of Amenities to Offer
Many renters are highly influenced by amenities such as the view from the home, modern décor and furniture, updated kitchens and bathrooms, natural lighting, scenic outdoor seating areas, a convenient location on or near the beach, and other desirable amenities.
Often with just two weeks of vacation per year, they want to make sure they’re getting the very best. Does it have a view of the water, and if not, how about the surrounding scenery? Can they picture themselves sipping a glass of wine on the balcony and taking in the views while watching the sun go down?
With plentiful amenities, you won’t have to work as hard to sell your rental. It will keep the place booked as much as possible throughout the year. Choosing a home that already has a lot of what your potential guests are seeking will also help you minimize renovation costs.
Narrow Down the Neighborhood Options
There are many towns and villages in Cape Cod that are worth investing in, including Brewster, Dennis, Yarmouth, and Harwich, among others.
Don’t stretch yourself too thin to save time on the process – choose a town you like, narrow down a few neighborhoods and stick to them during your home search.
There are multiple benefits and some disadvantages to each town/neighborhood to consider for a vacation rental – it’s wise to take all of them into account before you commit to any purchase.
We have an intricate understanding of the neighborhoods on Cape Cod and can help you determine which of them would best meet your goals for a vacation rental investment.
Do the Math
As enticing as it may be to invest in that vacation escape in the sand, make sure you do the math before you lay your money down.
HomeAway has reported that the average rental price for a Cape Cod summer home is $1,700 a week. However, recent data shows that the median sales price of a Cape Cod home is around $398,000.
You’ll want to do detailed research to find out your potential annual revenue to at least break even while you establish equity or a positive cash flow. Be sure to tack on expenses, such as insurance, taxes, and property maintenance.
While many neighborhoods in Cape Cod offer an excellent investment and steady interest throughout the year, be sure that you have cash reserves for vacancies, repairs or unexpected expenses.
Location is Key
If you buy a large, multi-bedroom property near some of the best family-friendly Cape Cod attractions and beaches, you are probably going to get lots of families with kids keeping the home booked.
They want a big home located near fun outdoor attractions, family restaurants, events and more. With this in mind, you will want to prioritize proximity to beaches, hiking trails, and parks that cater to their interests.
If you are buying a small cottage in an Outer Cape neighborhood, you are probably going to attract a more mature crowd or couples without children who want to visit art galleries, eat at good restaurants, and absorb the quaint culture of Cape Cod.
Learn your target market and carefully choose a location that will appeal to them to keep your home occupied.
Ready to make the leap and start looking for the perfect investment property on Cape Cod? With our extensive knowledge of the region and experience in Cape Cod real estate, we can help you find the right kind of home near local activities and attractions. For more information, contact our team today at (508) 619-7658.