The Ever-Growing World of Vacation Home Investments

Michael Eckerman
Jul 8 · 3 min read
Michael Eckerman on the Ever-Growing World of Vacation Home Investments

The list of sources for investment grows every year. GIC’s, index funds, stocks, foreign exchange, cryptocurrencies. Some are active, requiring constant monitoring and adjusting. Some are passive allowing for long term gains without too much fussing about. Many investments persuade people into one of these two models. You can either actively trade daily, or you can passively trade. But a less common, and more practical, option allowing the higher yields of active investments, but without the daily work of trading is rental homes.

Michael Eckerman from Phoenix, Arizona has been working in real estate investment and financing which has led him to some important observations and tips about the world of real estate investment. He explains what you should know to help you decide if it is right for you and how to begin to navigate the world of vacation home investment.

How much can I make off this investment?

Of course, it all depends on your property location and the lengths of rentals that you offer but can range between $20,000 a year to $100,000 a year. A good rule of thumb is about $10,000 — $15,000 for every $100,000 of property value at purchase.

How much do I need to get started?

Again, it all depends on the property. It’s recommended that you have a down payment of at least 20%, or more if possible. A higher down payment, while costly at the start, will allow for lower interest payments, and will make your property profitable faster. Also having a contingency fund for any necessary repairs or renovations is also recommended.

How long will it take me to start earning a profit?

If you put down a large down payment in a popular area, you could be earning money quickly. But if you put a small down payment in a less popular area, it could take longer to make a profit. This is a topic that Michael Eckerman’s experience with locations and financing can help you determine.

What does the process look like? And what do I need to get started?

When investing in vacation homes, the large purchases and possible locations can be confusing and overwhelming for a newcomer. When starting out, there are a few things to keep in mind:

  • Location is everything. Proper research into other rentals in your purchasing area ensures that your property receives the demand that creates profit.
  • The larger the down payment on the property reduces the mortgage payment with a lower interest rate and faster rate of return. Making you profitable more quickly.
  • Screening your renter’s ahead of time is an important step to make sure that your property remains safe and protected. Credit history can provide important details into whether they can afford the monthly payments of your rental.

Like all investments, there are no certainty. But with good research and some planning ahead, rental homes can provide an effective mixture of proactive investment and passive earning. Mike Eckerman has helped thousands of clients with finance investments, developing investment strategies, and guiding individuals through the sometimes-confusing process. With his extensive knowledge, Mike Eckerman can help anyone plan for their specific long-term goals.

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Michael Eckerman

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Michael Eckerman is the CEO of The Eckerman Group in Phoenix, AZ. He is an expert in real estate finance and investments.

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