The allure of short term vacation rentals
Considerations for short term vacation rentals
If you are looking to invest in real estate, vacation rental properties can be a good choice. Over the years, investors have been enjoying considerable returns by investing away from the orthodox, long-term rental route. But what exactly does one have to take into account before entering such a market?
Borrowing from their years of experience in the property market and industry knowledge, the team from Sapphire Capital LLC offers some advice to potential property investors.
Rules, taxes and local regulations
Seeing the drift towards vacation rentals, local municipalities are putting in place regulations aimed at short-term renting. These laws will provide for the ability and manner in which short-term renting in the area will operate.
Short-term rentals are not exempt from tax and licensing rules. You could say that the level of scrutiny across the country compared to hotels and lodgings is stricter. Your rental needs to be registered with the relevant city, county or State agency. In addition, tax payments need to be done, either monthly or quarterly.
However, even if the city allows you to operate a vacation rental, one will still have to adhere to the terms of the Homeowners Association (HOA). Awareness and compliance to these provisions will keep you on the better side of the law.
Attention to detail
With numerous options at their disposal, your guests will be looking to choose a quality space that stands out from the competition. This starts off with high-resolution photos that bring out the strengths and qualities of the property. Owners will be required to upgrade the fittings and amenities of their spaces to meet the expectations of the market.
Some of the expected amenities in vacation rentals include a fully stocked pantry/ kitchen, Wi-Fi and other tech comforts, full cable support and quality linens and towels. Depending on the atmosphere you are going with, owners can also provide lounge chairs, gaming systems and more.
It is also important to add in a personal touch. After all, vacation rentals are the substitute to hotels. You can choose to place a welcome note on the kitchen counter or have a backed of freshly baked goodies. This will make their stay more memorable and give you that five star rating.
This is one of the biggest decisions you will have to make. As the business and property owner, you have two options, to manage it yourself of hire a professional property/ vacation rental manager.
Managing the premises yourself saves on management fees, allows you to keep a close eye on things and ensure a personal touch. But the work can be taxing on you as you have to manage bookings, check guests in, deal with any issues, schedule cleaning and maintain the property.
Hiring a professional might come quite in handy, especially where you feel you are out of your depth. You might have to pay management fees but you will be relieved from the stress and frustration that can come with dealing with guests. As the owner, you can always decide to take over once you have gained some experience and confidence.
Most of the short-term rental bookings are handled on online platforms such as Airbnb, Expedia or Booking.com. Since each space is unique in its own sense, guests will be relying on the experience of past visitors to your unit. Having a positive guest review will give your credibility and give you good business.
If you are considering jumping on the bandwagon of short term/ vacation rentals, you will need local market information to get started and calculate the viability of your investment. Such information includes the effective demand for property, rental asking prices, local tax requirements and property maintenance tips.
Call upon the premier real estate investment company in Tucson, Sapphire Capital Investment LLC. With our extensive knowledge in all things real estate and large network, we have been able to provide sound and professional advice to hundreds of investors in the past.
Reach out today and benefit from our years of practical real estate experience.