Second Home & Investment Property Essentials
So you’re thinking about buying a second home – congrats! Owning a second home, if managed correctly, can provide a great source of revenue, not to mention a nice place to visit when you need a family vacation. A purchase like this, however, is much different from purchasing a residential property. Think about it in two buckets – investment property essentials, like insurance, and nice-to-haves, like updated decor.
The biggest difference between a residential property and a second home is that you won’t be living in it full-time. In fact, other people will be occupying your second home more than you, and with a critical eye. If you’re looking to purchase a second home along Northwest Florida, where people travel near and far to experience the sugar white sand and emerald green waters of the Gulf of Mexico, you’re likely looking to purchase a vacation rental home or condo either on or in close proximity to the water. Owning a second home along or near the beach serves two purposes. You not only get to own a home where family memories and made and cherished for years to come, like watching endless sunsets on your balcony, teaching your kids to swim in the Gulf, and more, but you also enjoy the benefit of renting your vacation home to other families looking for the same experience.
So to best prepare yourself for handling a second home along the Gulf of Mexico, we put together these second home and investment property essentials. Whether required by law or just strongly recommended, to make the most of your second home, consider these essential items.
Homeowners insurance in Florida, due to the proximity to water and water-related weather, can be difficult to navigate. Throw in that your second home won’t fall under the definition of resident-occupied and is being rented on a short-term basis, and you’ve just made things a little more complicated.
The best way to go about securing the right dwelling insurance that protects your second home and your liability is to speak with a local insurance carrier that knows the market and the vacation rental industry. They’ve seen it all and should be able to guide you through so you have the correct insurance limits and endorsements. Make sure to read your policy and fill out your property questionnaire in its entirety so you ensure you receive accurate coverage. The last thing you want to hear when an issue arises at your second home and you go to file a claim is, ‘That isn’t covered.’
In addition to insuring your second home, make sure to review the loss of rental income portion of your insurance policy. Some policies include it, while others don’t. Make sure you know how much is allotted in loss of rental income and consider increasing the amount or obtaining additional loss of rental income insurance if needed.
2.) Safety Considerations
There’s a reason safety comes right after the base of Maslow’s hierarchy of needs – it’s an essential need in everyone’s life. This also applies to guests, and how you go about it can make the difference between a safe experience and a Big Brother experience.
Owner-operated or installed cameras, as well as other systems that track how your guests are using the property while residing in it, run the risk of guest discomfort or, even worse, refusing to choose your property from the get-go. By enlisting the help of a professional property management company, you create a safe environment where rules and conditions are to be expected, and they can provide solutions for any home security or automation desires to ensure both you and the guest are comfortable.
Ensuring the safety and security of your guests should be a top priority, and a few safeguards can make all the difference:
- Make sure your entry is well-lit, secure, and accessible, and consider incorporating technology.
- Test the stove, oven, and appliances to ensure they are safe and in working order, and make sure filters are clean.
- Fire extinguishers, carbon monoxide detectors, and smoke alarms should be accessible and functioning properly.
- Pay attention to slippery floor mats, accessibility to hazardous cleaning products, and stability and positioning of furnishings.
- Child and pet-proof areas as needed, and provide a first aid kit with all the essentials for minor cuts and burns.
- Include emergency numbers and the location of the nearest hospital should an emergency occur during their stay.
3.) Cleaning Protocol
A proper cleaning protocol has never been more critical for a guest. In fact, cleanliness reviews are one of the most significant items a guest takes into consideration when booking a property. Make sure you have a plan in place so your guests feel confident in the sanitization of your second home. Some things to consider when building a cleaning protocol:
- Whether you’re cleaning it yourself or outsourcing the work, use a cleaning checklist and update it as needed.
- Pay close attention to bathrooms and kitchens as they are high-trafficked areas.
- Dirty floors, sinks, tubs, and showers can give the guest the ‘ick,’ so ensure those areas are properly cleaned and double-checked.
- Guests notice the small things, so don’t overlook dusting ceiling fans, checking remote controls, and cleaning under appliances and beneath the couch cushions.
- Before guests arrive, wash all linens, including hand and bath towels and bed linens, and sanitize as needed.
- Start at the furthest point from the front door when cleaning rooms and work your way back to the room entrance.
- Turn off the lights when exiting the room to eliminate backtracking.
In full transparency, preparing a vacation rental for guests is more intensive than the process used in your primary home, so we recommend selecting a trusted property management company that has high cleanliness ratings and an iron-clad plan in place.
A small detail often overlooked is proper signage outside your second home so guests can easily find it. This is particularly important if your property address is hard to identify from the street or you have a long driveway leading up to the home. When it comes to single-family homes, you may want to give it a cheeky name applicable to the area and the aesthetic of the home, so including that on your signage will help guests spot your property.
Speak with your property management company about any regulations by the municipalities or property associations regarding rental signage. A good property management company will have a sign company they work with that can meet those needs and comply with any restrictions.
5.) Existing and Future Repairs
Maintenance is an ongoing process that starts even before renting your second home, and it’s important to continue to maintain the property throughout the lifecycle of a vacation rental. When identifying existing and future repairs, consider the following:
- If your property is a single-family home, make sure you understand your maintenance responsibilities outside the home, such as sprinkler systems, landscaping, pool areas, deck areas, parking, exterior lighting, and more.
- Wear and tear will happen, often at a faster rate than in your primary home. It’s the cost of doing business and, therefore, will not be charged to the guest.
- From time to time, damages and missing items may also arise. Check with your property management company to see if they have a damage program to help you with this expense.
6.) Great Property Management
If the above items seem out of scope for you to manage, especially if you do not reside in the area, probably the greatest second home and investment property essential is selecting an experienced property management company known for “leaving no stone unturned” when caring for your second home. Owning a second home is likely one of the larger investments you have, so don’t skimp on the quality of your property management company. When the right property management company is on your side, they come equipped with checklists, well-vetted vendors, policies and procedures, and anything else needed to make sure your investment property stays in tip-top shape while providing a 5-star experience for your guests. Not to mention, they’ll market your property, manage rates to ensure the highest yield and work with the guest from booking to departure.
Thankfully, we got you covered. Scenic Stays property management is a trusted, locally owned and operated full-service property care company, delivering on all the second home and investment property essentials and then some. So lock in your property investment by talking with a Scenic Real Estate associate today, and be on your way to becoming an investment property pro.