11 Things to Consider Before Buying a Vacation Home to Rent in Kerala

Posted By hilife_admin On Mon, Feb 27, 2017

Vacation homes are high in demand for the past few years. And as a great vacation destination, India is making it huge to the global market. Foreign tourists and investors are choosing India for their vacation home. Even many of the Indians are switching to buying a vacation homes to rent in some of the most popular tourism destinations of the country such as Kerala, Goa etc.

Spending some time amidst the beautiful nature as well as trekking, fishing and other fun activities are some of the essentials for a vacation. That is the reason why tourists and travellers, who frequently visit these places of India, prefer to have their own vacation homes in Kerala.

Vacation Homes for Rent:

But, what is even more important in this regard is that the real estate market of India also offers the vacation homes for rent. Those, who have a limited budget, or those, who do not want to stick to only one place as their vacation destination, often choose the vacation homes for rent. This saves them money and also reduces the headache of maintenance. Since the vacation homes are not what you will use throughout the year but only for a particular season, it is certainly a good idea that you rent your vacation homes.

Along with that, there is yet another factor that the investors can make out of the vacation homes and that is a good return. Since the vacation homes are so much in demand, if you own a property that you want to rent out during the vacation season, you will certainly fetch great returns. This is because; the luxurious vacation homes come for an expensive rent. Hence, if you manage to make your vacation home one that the potential tenants would want to rent, then you will certainly make great profits buying vacation homes to rent.

Before Buying  Vacation Home to Rent, Consider these Things :

If you are thinking of buying a home that you would be renting out to potential tenants during the vacation season, there are a few things that you need to be careful about. Considering these factors while buying the vacation home or property, will only contribute into the profit margin.

While talking about the vacation homes, the name that would always come first to your mind is Kerala. The God’s Own Country has always attracted thousands of travellers and tourists and during the vacation season, there is immense demand of vacation homes. Foreign tourists as well as domestic travellers, all are ready to pay lump sum amount of money as rent.

  • Find the Right Location:

find the location

The first thing that you need to consider, while deciding on which property or vacation home you should be buying to rent out is the location. Since the vacation homes are meant for those, who are ready to pay huge for a luxurious and relaxed vacation, they would certainly pay attention to its location. It must be close to the major attractions of the state or city. In a state like Kerala, Kovalam, Kochi, Alappuzha and Munar are some of the most popular locations for vacations. Buying a vacation home in these places will help you to find tenants easily.

  • Facilities and amenities:

One of the most important factors that must be kept in mind while buying vacation rental property is that the vacation homes are chosen over the luxury hotels with the hope of having a feel of home during the stay. Hence, the tenants, who rent your vacation home, would be looking for a home and not a small hotel room. If you are going to put your home for rent, you need to keep in mind these things.

But of course, you need to provide other amenities like a lawn, terrace, open air roof or balcony that open out to the beach etc. If these are not present, what is the use of choosing your property for renting?

  • Easy communication:

Though rented cars are very easily available in any of the tourism destinations of Kerala, it is important that the vacation home is situated in a close proximity to the surrounding tourism spots. Even local modes of conveyance should be abundant and easy to access.

  • Matching the lifestyle:

Since the tenants would be tourists and not anyone, who will be hiring the vacation home for a permanent stay, the amenities must match the lifestyle of the tourists. Jacuzzi, swimming pool, a gaming area, a place to barbeque etc. are some of the amenities and facilities that are a must for any of the vacation homes in Kerala. They go really well with the climate and feel of the state that is almost surrounded by the sea.Here  is a checklist for buying luxury homes in Kerala.

  • Enough space for the family:

Reports have shown that the vacation homes are usually the retreats for families, rather than for couples or corporate executives. Hence, when your potential tenants will be travelling with the family or visiting your vacation home for their vacation stay, they would be looking for enough space to accommodate their family. Therefore, there should be enough number of rooms, so that they can stay comfortably and even entertain their guests.

  • Think of the finance options:


Now that the other factors are already talked about, it is important that you think of the more realistic factors that are a must for buying a vacation home to rent. The vacation homes that you are planning to rent out are meant for investments. Hence, there is no meaning of spending your savings on that. It is always a good idea that you take loans. There are many banks and financers, who offer easy loan options for the investors of real estate industry. With the reduced interest rates for the bank loans after demonetization and Union Budget 2017, it is even easier for the investors to seek for loans.

  • You can try mortgage:

If you want to reduce the interest rates further, it is quite easier to go for the mortgage loans. You can mortgage any of your existing properties and getting finances for your vacation homes will be absolutely easy.

  • Spend according to your income:

Though you are planning to rent out your vacation home for rent and expect great returns, you need to understand that the investment should be as per your income. Do not be carried away with the project or property and admit to the price. Plan accordingly and consider the Return of Investment and then only proceed towards the payment.

  • Understand the Tax Implications:

As you buy vacation home and rent it out, you have to pay the taxes accordingly. So, understand the tax implications of Kerala before you decide on the rent. You are buying and renting out your vacation home for a return or profit. Hence, there is no meaning in paying huge taxes and getting small rent for that. Also here is a step by step guide to Kerala land registration.

If you are a resident of Kerala and the vacation home is your second home, you might have to pay higher taxes. Hence, it is always a better idea that you hire a tax consultant, who will be able to guide you regarding the taxes and the ways that will help you to save taxes. Probably buying the home outside the city limits or less expensive places will be a better idea to save taxes.

  • Expect realistically:

Though you are investing in vacation rentals for great returns, it is important that you are realistic with your expectations. You are actually buying a vacation home and not just “any” property. Hence, it is quite obvious that your vacation home will be in demand only during the vacation seasons. Ask a real estate agent of the area, who will help you out in getting tenants for your vacation home. He will guide you about the best times. Do not be too optimistic about the rent. There can be seasons, when there will be fewer tourists and less demand and quite obviously, low rents.

  • Use it when there is no demand:

When there is no booking or demand for the property, use the vacation home yourself; after all it is your property. Sometimes, it is more satisfying to enjoy the vacation yourself than to make the vacation of others’ interesting and comfortable.

Now that you have understood the factors that you need to consider while buying a vacation home to rent, it will be easier to make your decision. Just make sure that you find a property that you will love to spend some time in and it will be easier for you to make the right investment.


Vacation property investment is a newer trend that is very much in vogue and with the right decisions, the returns would be huge. In a state like Kerala, where there are so many tourist destinations, it is the best idea for you to choose a property for purchase and rent. You can always take the help of the best real estate agents. They will guide you regarding the new projects or existing properties that you can purchase for an affordable price.

Hi-Life Builders, one of the top builders in Kerala offering premium residential apartments & flats in Thrissur. If you are looking for luxury thrissur apartment, Call us at +91 999 599 0000. 

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