It has always been my dream to own a vacation rental property. It combines two of my favorite things: going on vacation and making money.
Unfortunately, a few drawbacks to owning a short-term rental property have kept me from fulfilling that dream. Two of the biggest ones are the cost of buying a property and the hassles of dealing with short-term renters.
However, I recently came across a new real estate investment opportunity on Republic that enables anyone to get into the vacation rental market for as little as $250. Here’s a closer look.
Digging into the deal
Republic is a marketplace that allows non-accredited investors (i.e., those without a high income or a high net worth) to invest in highly vetted opportunities in start-ups, real estate, video games, and cryptocurrency. Republic’s real estate platform routinely offers the chance to invest in different types of real estate deals, including fix-and-flips, nontraded real estate investment trusts (REITs), and condos. I’ve participated in several deals, which have delivered decent returns overall.
One of its latest offerings is a North Carolina Beach Rental Portfolio. The fund will focus exclusively on owning single-family beach vacation rentals in North Carolina. It enables anyone to own a piece of North Carolina beach real estate, no matter where they live, for as little as $250. Investors also don’t need to worry about managing the properties, since an experienced management team takes care of everything.
Investors in the fund can earn passive income from vacation rentals. They could also gain from home price appreciation upon an eventual sale of the portfolio. The fund expects to acquire and manage properties for three to five years and then liquidate the portfolio. It’s targeting to generate an internal rate of return in the 12% to 18% range. As a bonus, those who invest more than $10,000 into the fund can get free lodging at one of the properties.
The pros and cons of short-term vacation rental investing
The North Carolina Beach Rental Portfolio offering has many benefits over traditional short-term rental property investing, the biggest being the cost. The $250 minimum is a fraction of what it would cost to purchase a vacation rental on a North Carolina beach.
For example, the cost of the …….