Ilyce Glink

When it comes to buying vacation rental property, Christine Hrib Karpinski practices what she preaches.

Karpinski, owner of several rental properties, director of owner community for HomeAway, Inc., and author of "How to Rent Vacation Properties by Owner," says she has several hard and fast rules when it comes to identifying an ideal rental property.

She says each property must meet her high standards or she moves on to the next. The good news: There are plenty of ideal rental properties for sale, if you know where to look.

Here are the four things she looks for in an ideal rental property:

1. Location, location, location.

Real estate is always about the specific location, but when it comes to vacation rental properties, Karpinski says you have to think first not about the school district but about why someone wants to travel to a specific location.

"How close is the property to the beach, to the main tourist attraction or mountains?" Karpinski asks. "What kind of accessibility does the property have to whatever is in that area that attracts travelers?"

The property doesn't have to be beachfront to make it a great vacation rental. "A lot of times, buying a property across the street from the beach will be much more affordable, and that opens you up to larger pool of prospective renters," Karpinski explains, noting that if you buy on the beach, a property might cost $1 million but if you buy the condo across the street from the beach, you might only pay $200,000.

But accessibility is key. "I wouldn't buy a vacation rental five blocks off the beach, but across the street or even one block away might be fine," she adds.

2. Rentability of the vacation rental property.

Karpinski says the property has to be in an area and in a development that supports nightly and weekly rentals. "The homeowners association has to allow nightly and weekly rentals," she says. "Many homeowners associations say you can't rent on a nightly or weekly basis, but you have to rent for 30 days at a time. Who goes on vacation for 30 days at a time? Inherently, that's a huge hurdle and you should never buy a vacation rental property in a place like that."

Should you choose a single-family home over a condo? Karpinski says she has bought both, and it depends on how much you feel like managing the property, the price you'll have to pay, amenities offered by each, and the most popular type of rental property in the immediate area.

Karpinski wouldn't buy a single-family home in an area where most people are looking for a two-bedroom condominium.

3. Amenities.

While you might be able to afford a condo or a single family house in the same area, you have to look at the amenities each property would offer a prospective vacation property renter, Karpinski says.

A condo building will likely have a pool, tennis courts and workout room in the complex where a single-family home might not.

"It's one big circle. You have to find out what people want out of an area and then buy that type of property," Karpinski explains. "For example, I'd never buy a condo in Gatlinburg, Tenn. or Branson, Mo. -- only a single-family home, because that's what people want who vacation there."

How do you find out what people want? Research. "Spend time at VRBO.com and at HomeAwayRealEstate.com," Karpinski suggests.

4. Cash flow.

Karpinski has developed a formula she sticks with when buying vacation rental properties. "I base everything off of a 17-week rental potential, even though my properties might rent out for nearly 26 weeks," Karpinski says. She adds up all of her expenses including the mortgage, property taxes, insurance, phone, power, cable and homeowners association dues. If she can meet all of those expenses with the income generated from 17 weeks of renting out the property, she will buy it.

"If I rent out the property for 20 weeks, then I'll have extra cash to do maintenance or put cash in my pocket," she explains.

Karpinski believes buyers can always find properties that meet these four requirements, if they look hard enough. In today's real estate market, as opposed to the market of three years ago, you don't even have to look that hard.

"I don't waver from my formula, and that's why I survived last year. In fact, last year was my best rental year ever," she says.

What about taxes and depreciation? Karpinski says that's gravy. "I don't work from a tax perspective because it always sounds great on paper. What I really care about is how much cash is going into and out of my pocket."

For more information, check out "How to Rent Vacation Properties by Owner," 2nd ed., by Christine Hrib Karpinski (Kinney Pollack Press, $26). Order online at Amazon.com - How to Rent Vacation Properties by Owner. Also available Breaking All the Rules: How to Rent Your Vacation Home Plus Free Welcome Book