How to Choose a Vacation Rental Property: A Broker’s Guide

Let’s face it—helping clients invest in vacation rentals isn’t just about finding a pretty house. It’s about spotting properties that perform. As a broker, you’re not just closing deals; you’re building your clients’ wealth. Whether they’re eyeing a beachfront condo or a mountain cabin, your guidance can turn a “meh” investment into a cash-flow machine.

In this guide, we’ll break down what to look for in a vacation rental and how to position your clients for success. Plus, we’ll share insider tips on financing these gems with RCN Capital’s tailored solutions. Let’s dive in!

1. Location, Location, Location: The #1 Rule for Vacation Rental Income

You’ve heard it a million times, but it’s worth repeating: location drives demand. A mediocre house in a great area will outperform a stunning property in a ghost town. Here’s how to nail location for your clients:

• Follow the Crowds: Target areas with proven tourist traffic. Think:
  • Coastal towns (average 65% occupancy rate, per AirDNA).
  • Mountain retreats (ski resorts see 80%+ occupancy in peak season).
  • Near major attractions (Disney-area rentals book 300+ nights/year).
• Seasonal Balance: Look for spots with year-round appeal. For example:
  • Beach towns with off-season festivals or golf.
  • Mountain areas with summer hiking trails.
• Regulations Matter: Some cities restrict short-term rentals (looking at you, NYC and SF). Always check local laws!

Broker Tip: Use tools like AirDNA or Mashvisor to analyze rental demand and competition in target areas.

2. Curb Appeal & Aesthetics: Why Looks = $$$

Vacation renters shop with their eyes. A property’s photos can make or break its vacation rental income. Here’s how to help clients stand out:

• Invest in Professional Photos: Listings with pro photos earn 40% more bookings (VRBO data).
• Stage for Instagram: Quirky decor, cozy nooks, and vibrant colors get shared online—free marketing!
• Prioritize Outdoor Spaces: Renters pay up to 30% more for homes with pools, hot tubs, or fire pits.

3. Amenities That Boost Bookings (and Revenue)

Renters today expect more than a bed and a roof. What to seek in a vacation rental:

• Must-Haves:
  • High-speed Wi-Fi (#1 amenity for remote workers).
  • Fully equipped kitchens (families hate eating out every meal).
  • Laundry facilities (critical for longer stays).
• Revenue Boosters:
  • Hot tubs (add 50-100/night).
  • Pet-friendly policies (20% more bookings).
  • Smart home tech (keyless entry, thermostats).

Broker Hack: Utilize comps to demonstrate to clients how amenities affect pricing. Example: "Scottsdale homes with pools have $50K more annual income."

4. Crunching Numbers: How to Calculate ROI Like a Pro

Your clients are interested in profits, not merely scenic views. Educate them to estimate vacation rental income potential:

1. Estimate Annual Revenue:
   • Use platforms like AirDNA for occupancy and rate data.
   • Example: A 3-bed cabin in Gatlinburg, TN, averages $45K/year.
2. Factor in Costs:
   • Mortgage, property management (20–30% of revenue), maintenance, insurance.
3. Calculate ROI:

(Annual Revenue - Annual Costs) / Total Investment = ROI. Aim for 8–12%+ ROI to outperform traditional rentals.

Tool Alert: Share free ROI calculators (like BiggerPockets) with clients to simplify the math.

5. Financing Vacation Rentals: Why RCN Capital is Your Secret Weapon

Conventional lenders tend to shy away from vacation rentals. That's where you (and RCN) enter the picture.

Why Brokers Love RCN Capital:

• Flexible Terms: Loans for fix-and-flips, long-term rentals, and vacation properties.
• Fast Closings: Fund deals in 10–14 days—perfect for snagging off-market gems.
• Competitive Rates: Beat competitors with rates starting at 5.24%.

3 Actionable Tips to Impress Your Clients

1. Highlight Tax Benefits:
   • Mortgage interest, property taxes, and depreciation can slash taxable income.
2. Warn About Hidden Costs:
   • Cleaning fees, turnover costs, and seasonal maintenance add up.
3. Partner with Local Pros:
   • Connect clients with property managers, photographers, and contractors.

Why Vacation Rentals Are Worth the Hype

• Higher Returns: Vacation rentals yield 30–50% more income than long-term leases.
• Appreciation Potential: Hot markets like Park City, UT, saw 20%+ price jumps in 2023.
• Diversification: Adds a recession-resistant asset to your clients’ portfolios.

Ready to unlock vacation rental success? Connect with RCN Capital today to discuss our real estate financing solutions and how we can help you grow your business.