The document provides guidance on navigating the vacation rental contract process, including the critical inspection and due diligence period, which allows buyers to inspect the property. It also discusses the option period specific to certain states, the handling of seller's future bookings, and the nuances of appraising vacation rental properties. Buyers are advised to make decisions based on financial viability rather than emotions or competition.

1. How to Navigate the
Vacation Rental
Contract Process

2. The Inspection and Due Diligence Period
● This is the period after
signing the contract, when
the buyer has the opportunity
to get the house inspected
and decide whether they’d
like to move forward with the
purchase
● Don’t ever skip inspections!
● Get all of the inspections that
are typical for the area

3. Inspections to Consider
● General home inspection
● Pest inspection
● Radon inspection
● Septic inspection
● Well inspection
● Mold inspection
● Foundation inspection
● Chimney inspection
● Wood damage inspection
● Electrical inspection
● Lead-based paint inspection
● HVAC inspection
● Pool and spa inspection
● Roof inspection
● Soil stability inspection
● Landscaping inspection
● Water systems inspection
● Asbestos inspection
● Document inspection
● Disaster inspection

4. The Option Period
● This is a period of time when
the buyer can terminate the
contract for any reason
whatsoever without any
recourse from the seller
● Most states do not have this
● The term “option period” is
specific to Texas, but
Georgia, Massachusetts, and
Florida have similar periods

5. Valid Vs. Invalid Reasons for Contract Termination

6. Furnished Property Contracts
● In vacation markets, you’ll find
lots of properties that were
previously run as vacation
rentals and come fully
furnished
● Furniture is not real estate, it is
personal property; it can’t be a
part of the real estate contract
● Most sellers negotiate a higher
price and note in a separate
document that the furniture is
included at no additional cost

7. Handling the Seller’s Future Bookings: Potential Scenarios
● You want to take over the existing
listings → This is not a good choice;
previous good reviews don’t equal good
management, and the accounts are
linked to personal info.
● The seller wants you to honor their
future bookings → Asking guests to
cancel and rebook their trip starts the
interaction on the wrong foot.
● You want the seller to stop booking the
property after the contract is signed →
This isn’t fair to the seller; what if you
end up backing out of the contract?

8. Handling the Seller’s Future Bookings: Potential Scenarios
● The seller wants to continue
managing the property → This is
never a good idea!
● The seller wants to transfer their
bookings and retain a procurement
fee → This usually ends badly for the
buyer, and you shouldn’t agree to it.
● The seller wants you to stay with
their current management company
→ If you’re competing with other
offers for the property, this might be
worth it; you could also try
negotiating a higher purchase price
to get out of working with the
company.

9. Vacation Rental Property Appraisals
● Vacation rentals are appraised
as residential properties, not
commercial properties
● Earning potential doesn’t play a
part in appraisals
● Appraisals are based on market
trends and similar properties
that were recently sold
● Sellers and real estate agents
may try to inflate price based on
earning potential, but this isn’t
valid

10. Making the Investment Worth It
● Focus on making the
investment work for you
financially
● Don’t get caught up in who
“won” the negotiation
● Avoid making decisions
based on ego, principle, and
competitiveness
● Stick to the numbers and
facts

11. Thanks for watching!
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