Saturday, April 4, 2015

Get Away From the Tourist Horde and Still Earn on Your Second Home

Get Away From the Tourist Horde and Still Earn on Your Second Home
By Margaret Summerfield
If you're thinking of buying a second home that you want to use yourself and also rent out to generate some income, you may have felt conflicted about where to buy.
Common sense tells you to buy in a place that's a tourist hotspot. That way, you've got a big pool of potential renters. But suppose you're not a party animal. You don't like crowds or noise or hustle and bustle. You want a second home in a tranquil spot where you can escape and unwind. The tricky question is, in a place like this, can you still make good rental income?
The short answer is yes. In some secluded hideaways, your second home can do more than cover its costs. It can earn a handsome income. Here are my top three picks where you can do that:
Location #1
As this country emerges from the shadow of its better-known neighbor to the south, it's beginning to gain a reputation as the hottest tourist destination in the region. It's got a lot to offer: steamy volcanoes, island-sprinkled lakes, wildlife-packed rainforest, and charming colonial towns.
But my focus is on the country's southern Pacific coast, where jagged cliffs plunge down to pristine beaches.
On this section of coast, pounding surf crashes up on rocky crags...and unspoiled beaches meander for miles. The beaches are free from crowds and from development. It's quickly gaining ground as a getaway destination for the jet set. A new resort here charges guests upwards of $500 a night. Their residential villas, at $750,000 a pop, are sold out.
But just 10 minutes from the resort, you can live in luxury without breaking the bank. Set in 2,700 acres of rolling hills and forest, this community boasts five beaches, one with pink sand. It's got an equestrian center, tennis court, restaurant, clubhouses, and a newly opened boutique inn. It's an established community with a slew of amenities—yet you can buy an ocean-view lot here for as low as $86,000. The icing on the cake? Homeowners report strong rental income of up to $350 a night.
Location #2
This Caribbean island is a magnet for tourists. More than 5 million came for some fun in the sun in 2014. But it's easy to escape the crowds. That's because most visitors stay in one of the all-inclusive hotels on the country's eastern seashore. They rarely venture outside their resort. They don't know what they're missing.
What they're missing is this quiet peninsula where palm-covered hills tumble down to the ocean. There's mile after mile of soft-sand beaches. One small town in particular grabbed my attention.
There's nothing cookie-cutter about this beach town. It's an appealing mix of friendly locals, good food and a slow and sleepy pace of life. Everything is on a small scale in this beach town. You can walk to stores, walk to eateries, walk to the beach...stopping to chat with friends and neighbors on the way.
This beach town feels upscale. But it's much more affordable than other island getaways. You can buy a condo in town for as little as $72,000. With the lack of competition from big hotels, you can generate strong rental income, too, of up to 10% a year.
Location #3
The last three times I visited this destination, I hit a glitch. I couldn't find a decent hotel room. That's not surprising. The biggest hotel in this area only has 30 rooms.
On my last trip, I ended up staying at a hotel that was, quite frankly, tired and shabby. But it was the only hotel I could find with availability. This throws up an opportunity for folks that own a home in the area. Thing is, most want to keep their homes to themselves—a secret bolt-hole where they can get away from it all.
This is the perfect place to do that. It's like living on the doorstep of a national park. The landscape is amazing. Just five miles from the unspoiled beaches, there's a 6,000-foot-high mountain. The forests are rich with wildlife. Sip coffee on your terrace in the morning and you'll likely see monkeys, coatis, toucans, hummingbirds, and bright-colored tropical frogs.
It's not a mainstream tourist destination. For years, poor access kept tourists away. A new road has started to open this region up. But it's still a hidden gem. And, thanks to growing demand and a shortage of accommodation, your home can do more than earn its keep. It can also earn you a profit. You can charge up to $2,000 a week in rent on a three-bedroom house in this location.