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5 Reasons Why Investing in Vacation Rental Properties in Guam Can Boost Your Income

Are you looking for an intelligent way to invest your money and generate passive income? Consider buying a vacation rental property in Guam.

According to a report by the Guam Visitors Bureau, its tourism industry is continually booming, with visitor arrivals to a 32.8% increase in 2023, and expected to continue. This translates to increased demand for vacation rentals, creating a prime opportunity for investors like you! 

But why Guam? Let me share the reasons and insights to make you invest wisely.

1. Strong Vacation Rental Yields

One of the primary reasons why investing in vacation rental homes in Guam might increase your income is the high rental yields available from your property. 

Rental yield is the annual income you receive from renting out your property, divided by the property’s purchase price. It is a measure of how profitable your investment is.

Several factors, such as the increasing demand for vacation rentals, the limited supply of available properties, the low vacancy rates, and the attractive rental prices, drive the high rental yields in Guam. 

Unlike hotel chains with abundant rooms, Guam’s unique vacation rentals are in high demand due to their personalized experiences and limited availability. This translates to higher occupancy rates and consistent income for you.

Moreover, many travelers want to feel more at home and explore the local culture when they visit Guam. That’s why they prefer vacation rentals over hotels. Vacation rentals offer more benefits, such as:

‘Home Away from Home’ Comfort

Vacation rentals offer a “home away from home” experience with fully equipped kitchens, separate living areas, and private outdoor spaces. This appeals to families and groups looking for ample space and the convenience of self-catering.

Families on vacation can enjoy a home-cooked meal together in the fully equipped kitchen, just like they would at home. The separate living areas in these rentals offer a space where everyone can gather, play games, watch movies, or simply relax. The private outdoor spaces, like patios or garden areas, are perfect for children to play or for adults to unwind with a book or a cup of coffee. 

Better Value for Money

For longer stays, vacation rentals often provide better value for money compared to hotels. Renting an entire apartment or house with multiple bedrooms can be cost-effective, especially when sharing the expenses among a group.

Unlike traditional hotel accommodations, vacation rentals provide a greater degree of freedom and control to the guests. This includes the freedom to choose the location of the stay, the type of property, and the amenities available. This level of flexibility allows travelers to tailor their accommodations to their unique preferences and travel styles. 

2. Year-Round Tourism

Guam saw a positive growth in visitor arrivals in 2023 according to the Guam Visitors Bureau – for tourists from Japan, Korea, and China, who enjoy its diverse appeal – from pristine beaches and lush jungles to rich Chamorro culture and beautiful coral reefs. 

While other vacation properties sit idle in the off-season, yours in Guam thrives due to a continuous stream of travelers year-round. That’s the beauty of investing in Guam’s vacation rental market. Here, tropical sunshine and adventure are always in season.

Flexibility and Unique Experiences

Vacation rentals come in various types and styles, allowing travelers to choose a property that suits their preferences. From beachfront villas to city-center apartments, they offer flexibility and the chance to live like a local in residential neighborhoods.

Each vacation rental is distinct, reflecting the owner’s personality or the area’s local culture. This diversity in properties offers guests a wide variety of styles, ranging from large homes for the entire family, beautiful oceanview homes or condos, or budget-friendly options for the world traveler!

Personalized and Localized Hospitality

Many vacation rentals are managed by individual property owners who take pride in providing personalized hospitality. Guests can benefit from the local knowledge and recommendations of the hosts, enhancing their overall experience.

The growing preference for vacation rentals reflects a desire for more intimate and authentic travel experiences. Many properties are managed by local owners who pridefully welcome guests like family. This translates to insider tips, recommendations on hidden gems, and a genuine connection to the island’s culture. 

A 2023 study found that many travelers globally prefer vacation rentals for their local experiences, highlighting this growing trend. As Guam’s tourism industry adapts to these changing preferences, the vacation rental market is expected to continue its upward trajectory.

3. Favorable Tax Laws

Unlike the mainland US, Guam operates under a separate tax system with some sweet perks for investors like you. Here’s how Guam’s tax code can put more money in your pocket:

  • Guam has a territorial tax system, meaning only income from Guam is subject to Guam tax. This means that if you are a non-resident of Guam, you can avoid paying taxes on your income from other sources, such as your home country or other investments
  • Guam has lower tax rates than the United States for certain types of income, such as capital gains and dividends. 
  • Gumanynacted legislation to regulate and tax short-term vacation rentals, defined as accommodations for transient guests for less than 30 days. These rentals are subject to an 11% hotel occupancy tax and a 5% business privilege tax, comparable to the taxes imposed on hotels and other lodging facilities. By complying with these tax laws, you can enjoy the benefits of owning a vacation rental property in Guam without worrying about excessive tax burdens.

Guam’s tax system constantly evolves, so staying informed and consulting with a qualified tax professional is crucial. They can help you navigate the specifics and maximize the benefits of Guam’s investor-friendly tax laws.

4. Growing Economy

Guam’s economy depends mainly on US military spending and tourism, which together account for more than 80% of its GDP. In 2019, Guam’s GDP grew by 5.6%, the highest growth rate in the Pacific region. 

The growth was driven by increased military construction, visitor arrivals, and consumer spending. Guam is also expected to benefit from the planned relocation of about 5,000 US Marines from Japan to Guam, creating more jobs and demand for housing and services. 

Guam’s strategic location in the Asia-Pacific region and its growing infrastructure position it for continued economic expansion. This means your investment has the potential to appreciate over time, offering not just rental income but also long-term wealth creation. 

Investing in a vacation rental property in Guam allows you to take advantage of the island’s economic opportunities and stability. 

5. Diversify Your Portfolio

Unlike cash, stocks, or bonds, vacation rentals are tangible assets, not just numbers on a screen. This means they’re less susceptible to market fluctuations or hedge against inflation, offering a safety net for your overall portfolio. Plus, the potential for high rental yields in Guam can boost your returns. 

Real estate, in general, has historically offered stable returns and potential for appreciation. Guam’s vacation rentals take this further by providing rental income on top of potential value growth. It’s like having two engines powering your investment, potentially boosting your overall returns significantly.

Maximize Your Investment with Ellen’s Realty Guam Experts

Investing in vacation rental properties in Guam isn’t just about financial gain — it’s about owning a slice of paradise. 

This stunning island, a magnet for millions with its natural beauty, rich culture, and tax breaks, beckons investors with a lucrative market fueled by high demand and low supply of rental properties.

But here’s the thing — real estate markets can be very tricky. That’s why you need Ellen’s Realty Guam, the leading real estate agency on the island. We have the experience, the knowledge, and the passion to help you find and buy your dream property in Guam.

Let’s explore the possibilities of investing in Guam’s vacation rental market, contact us today.