Are you looking for tips and things to consider before buying a property that you intend to list as a short term vacation rental? You're in the right place.
Investing in property can be the best thing you've ever done if you take the time to learn how to do it properly. If you're thinking of entering this lucrative market, we've put together a series of things to think about to help you get started on the right foot.
Learn the Rules of the Game First
There is money to be made in the STVRmarket but there is also money to be lost if you're not careful. On top of learning the rules of real estate investing, you have to put extra effort into learning more about the STVR real estate market.
There are many factors to consider when purchasing a home to be used as a short-term vacation rental “STVRâ€. Recently Chatham County has incorporated certain restrictions when applying for STVR in our area, as well as certain private HOA covenants. It's important to do your research before purchasing a property to use as an STVR!
Understand the Legal and State Requirements
The local regulations governing the listing of your house or property as a STVR differs from city to city and state to state. You need to take time to understand the legal implications, ramifications, responsibilities and your state's requirements. You'll need to answer questions such as:
- Do you have to be physically present to manage the property?
- What will the tax obligations look like?
- What length of time do you intend to rent the property for?
It gets even more complex if you're not the sole proprietor of the property and are co-sharing it with others. An approval process is required by Chatham County before marketing a home as a short-term vacation rental. If not approved by the county beforehand, fines will be imposed on the property!
The Total Expenses Involved to Run the Place
It's one thing to purchase a property with the intent of listing it as a STVR. However, you need to take time to really think through and process each of the expenses that might be encountered. For example, what will you do if you fail to get guests for a considerable length of time?
Have you factored in servicing, utility bills, and other maintenance requirements into your rental fees? Are you aware of the fact that Airbnb receives a commission fee of 3% for every reservation made? And what of insurance? What will you do if someone gets hurt while staying in your rental? Each of these factors needs to be seriously considered and taken into account.
How Many STVR Rentals Are in Your Area?
Before heading out to list your property or to purchase rental in a particular city, do your due diligence and study the rental market in that area. Is there a potential to grow? Is there a gap in the market that you can capitalize on? Or the market is already over-saturated?
Learn the Art of Marketing Your Rental
Business is all about marketing. Achieving success with Airbnb & other sites depends on the number and quality of reviews you get from the people who've stayed in your home. This means that you have to go above and beyond to give them a quality experience.
You have to ensure that the home is well-maintained, clean, and provides the necessary amenities that guests will be looking for. Two areas of your rental which people will judge you by are your bathrooms and kitchen. You may need to renovate these two areas before opening your home to guests. Forewarned is forearmed!
Considering investing in a property for Airbnb? Contact us today! As your local real estate experts, we are here to help you navigate every step of this process.
