The short-term rental market has become a popular alternative for people wanting a more unique vacation experience, and that's led to some people investing in property for use as a short-term rental property. If you have been thinking about getting in on this real estate trend, there are a few things you should consider before making a real estate purchase. Here are a few things to think about before getting in on the short-term rental market.
Do You Have Time For A Second Job?
Unlike purchasing an apartment building that has long-term leases for residents, a short-term rental property listing operates more like a hotel room. You might have two or three different renters a week, and each time a person checks out, you'll need to turn over the property. This means having it cleaned, restocking any amenities you've decided to offer, and occasionally providing some concierge-type services. In addition, you'll also need to market the property and keep up with questions from potential renters. In short, purchasing a short-term real estate property can be like investing in a second job. Be sure you have the time and the patience to provide these services.
Where Will The Property Be Located?
While renters want a more authentic local experience when vacationing, they may not be keen on staying in a cul de sac in the suburbs. Your short-term real estate investment should be located somewhere that's exciting for tourists and that's located close to local attractions. Things to look for when shopping for short-term rental real estate might include proximity to the airport and public transportation. However, there are a few reasons that buying a property in a more remote location might work. For example, if you purchase a home located in the town where a classic movie was filmed or that has an iconic festival every year, you may be able to leverage the location to attract tenants year-round.
Can The Expenses Be Covered?
The costs and overhead associated with short-term rentals can be higher than those for traditional landlords. In addition to your mortgage, you'll want to consider extra insurance for the property to cover potential damages. Any brokerage service you use to book tenants will likely charge a fee, and some local municipalities may charge an occupancy tax to your tenants, which can eat into your profit margin. In addition to these costs, you'll also need to think about how often you'll need to replace mattresses, sofas, bedding, towels, and other items in the rental. You'll want to run the numbers to make sure you'll actually be able to make a profit off of the property.
Some people find short-term rental real estate to be a rewarding investment, and they even have a lot of fun operating their properties. If this sounds like a business venture you want to embark upon, talk to a real estate agency, like Found Realty, to begin your search for the perfect real estate property.
After thinking long and hard about what to do with my living situation, I finally made the decision that it was time to buy a house. I was tired of living paycheck to paycheck because of rent, so I began working with professionals to guide me in the right financial direction. I was able to find a great company that offered exactly what I wanted to learn, and they walked me through the financial aspects of home ownership. Within a few short months, I was living in a gorgeous new home that I absolutely loved. Check out this blog for great advice on home ownership.