Make Money Vacation

Vacation rental by owner – make money on your property investment

Some interesting information for go today: how to make really money (instead of losing it) of your investment in a vacation rental home by owner. Today, we focus on the Caribbean resort city of Cartagena in Colombia for the simple reason that it is the city that we operate our business leave. However, I believe these simple rules applicable to any destination you choose to invest in.

Cartagena is an expensive place and some vacation rentals if not all, of the most expensive real estate in Colombia and possibly in South America. by location individual owner facing the ocean or on the beach and luxury homes in Cartagena can well exceed 450 000 USD for an apartment (not such great either). These houses costly and complex new station go up every day in a market is already saturated (at least for now). Surely person in their right mind would consider this type of real estate as an investment! These units can be beautiful, but how much higher prices can grow to such a worth while investment? The property prices are at record levels here and it is difficult to see the possibility of benefits from these heafty luxury vacation rentals in the near future. We must not forget the monthly costs of the administration building is, of up to more than 200 USD per month. By the way that is more than $ 2,000 a year! Surely that eats into your investment like a plague of ants killer. Of course, it is of no importance if you hold the unit by day, week or year round … you must pay your fixed costs on your home investment vacation ..

A question for you …

So we have already seen some of the negative aspects for these holiday homes and luxury homes from the beach in Cartagena, now try to answer this question: Would you buy a stock if you costs $ 2,000 a year just for the sake of possessing it? Of course you would not, so why would you buy a beach vacation rental, as an investment, with the top up to keep the costs? These costs mean that in a little over four years, you ate a piece of nearly $ 10,000 of your investment. Translated, this means if you wanted to sell for a profit after four years you would need to be looking at somewhere around $ 15 000 just to break even.

As I said, and I think I made the point quite clear, Cartagena is very expensive. However, if you are seeking investment in real estate can be found interesting … if you look hard enough.

My experience here has learned to keep things simple and work with fewer units than the price Colombians working hard can rent. Forget fancy condos, rentals and complex range of luxury apartments for foreign tourists. These properties usually rent for two months a year. I prefer to have my properties rented year round.

I want to tell you a personal experience that happened to us last month (July 2009). We managed find a small 3 bedroom apartment in a complex closed lower middle class which had a price of 40 million pesos ($ 20,000). After negotiations we were able to get the price down to 37 million pesos (18 500 USD) and placed a "For Rent" sign in the window. No ads in the local paper, just a simple sign of the kitchen window. We were getting an average of five calls a day from people wanting to just rent the apartment. Even after removing a sign that we were still getting a couple calls a day! We were able to rent the apartment for 450,000 pesos per month (225 USD) without no problems whatsoever. It's more than 1% return on investment.

We are currently negotiating a second apartment in the same complex are currently talking to an architect who is interested in renting it for a month 1 million (USD 500). Needless to say we are very interested. There are many gems like this available that does not eat into your savings and can give you a very healthy return. We are fortunate to have a handful of these properties and they give us very healthy returns. If you want to live in a luxury apartment, then by all means buy one, but do not buy one here as an investment. Holiday homes in Cartagena owner is on your budget, just do not stop looking. Of course, it takes time and effort but the thing important is that you do not need to follow some courses priced, hyped-up, ongoing real estate investing, you only need to dedicated and common sense.

About the Author

Nicholas Webb is a real estate investor in Colombia and Panama who has managed to make a healthy living where many others have failed before him. Be sure to visit his website Vacation Rentals by Owner to learn more about how you too can profit from your investments instead of just increasing your expenses.

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