Most homeowners finance their Big White real estate investment by renting out their property to visitors when they're not using it personally.
That's no secret, but the WAY in which they do it AND build an equitable business, is!
Tip #1 - Buy a Big White property with rental equity or high potential for it.
Rental equity is the established business value, customer list and goodwill attached to the property AND it can be transferred to new property owners.
A property with it means that:
you get the names and contact information of previous guests who stayed in the property, and
you have the right to contact them and rent to them directly.
You're not just purchasing a vacation rental home; you're getting established customers who are likely to re-book your home instead of having to start from scratch and find new customers.
This increases your property's value and competitive positioning in the Big White real estate market.
If you can't buy a property with rental equity, buy one with high potential for it; this type of property will give you complete control over the rental method, operators, terms and services used.
Tip #2 - Need help managing your property? Avoid traditional rental managers.
You'll pay them 40-60% of your gross annual rental income. You'll pay all the bills and assume the risks, while they get rich by skimming the creamy annual revenues.
You'll have no access to your customer list and the right to contact and deal with guests directly; so if you change managers, you give up your guests too.
Thus, your property will never have rental equity; instead, it is being used to build your manager's business.
With no control over your Big White investment, it'll be cheaper and less hassle for you to just rent, not own, in the long run.
Tip #3 - The smart alternatives: direct management or rental equity management
Using one of these two management methods will allow you to increase your net annual revenue and build your Big White property's rental equity.
Direct Management
This is the do-it-yourself (DIY) approach. You take control and manage the reservations.
Use an online reservation system to handle your bookings; list your property on web sites that do the marketing and advertising to bring you bookings.
When you sell your vacation property, having an online rental business makes it simple for buyers to assess your guest list and easily take over.
You own the property's guest list and control the rules and rates.
Rental Equity Management (REM)
Someone else handles the reservations but you always own the business and your property's guest list, even if you change managers. You have control over every aspect of your investment.
Have an open system with your manager with which you can view your reservations, without the responsibility of handling them and the daily maintenance of your unit.
Although direct management gives you maximum return on a Big White investment, you may not have the time, interest, or confidence to do it. The next best thing is using REM. This type of management will build YOUR rental equity, instead of using it for their own business.
Cory Olsen-Miller is a writer for AlluraDirect.com, a vacation rental website offering powerful search and instant booking features for owners and guests. Visit their website for more Big White real estate tips, or check out their Big White ski resort lodging directory and save money by booking directly with homeowners.
Article Source: http://EzineArticles.com/?expert=Cory_Olsen-Miller
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