Source: Kaycee Miller
There’s more to location than you think. Obviously, you can make more money from a vacation rental that’s in a popular tourism destination. Beach houses, areas with nightlife and cultural events, holiday destinations or places close to outdoor activities are all good bets. Rural and suburban locations typically are less appealing to the traveler. Even the property’s location within a popular destination influences decision-making. For example, a city property that is close to theaters, landmarks and public transportation will command a higher rent than one in an outlying area where it’s harder to access the city’s attractions and transportation.
But location concerns are bigger than this. Many municipalities have put restrictions on Airbnb rentals or banned them altogether. Neighborhoods and multiunit buildings may also have stringent rules around length of stay, so there may be multiple sets of rules and regulations to navigate in your area.
Property management can be intense. While short-term rental platforms like Airbnb and VRBO can streamline property management, they can’t do it all. Someone has to interact with guests, arrange the details and clean and maintain the property. It takes much more time to manage a short-term rental versus a long-term rental property.
The stress and time pressures of a short-term rental should be considered up front; perhaps you will decide to invest in another type of property with all things considered. Or maybe you love the idea of a fast-paced income opportunity where you can interact with different types of people from all over the world!
Profit potential is high, but occupancy is unpredictable. As with any investment, a short-term rental must be able to prove ROI (return on investment). On average, it is recommended to aim for an ROI above 15%.
However, with a short-term vacation rental, occupancy can fluctuate wildly, so it is hard to say what the exact income would be. Generally, short-term vacation rentals have a higher profit margin. The potential is there for high ROI, but it is a higher risk and dependent on a variety of external factors.
Curious about the possibilities for your own rental home?
Call 518-734-6700 to speak with Liz about exploring them, or book your free Q+A call below:
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