How to Buy a Short Term Rental Ready Home in 6 Steps
Short Term Rental Ready Real Estate Purchase
Are you ready to enter the lucrative short term rental market? Studies show that peer-to-peer businesses are becoming the model for the next decade. Companies like Uber, Lyft and VRBO have seen the volume of transactions jump in the past few years. As more and more consumers realize the advantage of working directly with the property owner to arrange travel plans, the need for short term rental properties only increase. As you begin your real estate property search, here are some important steps and considerations to address first.
1. Get Lender Qualified – First and foremost, find a quality lender to get qualified with BEFORE you head out to search for a property. A short term rental whether a primary residence or a rental, is an investment property for your future and it each will be financed accordingly. If you are buying primary residence you may only be required to put 3-5% down for an FHA government home loan or up to 20% down for a conventional home loan. (You can call my favorite Loan officer Nicole Rueth at Fairway who can put you in touch with any Fairway lender in the USA to work with.) An investment property, which is not your primary, may require you bring anywhere from 20%-50% down, so it’s best to prepare for this up front. If you are just starting out and don’t have this down payment, you might need to get creative, find a co-signer, liquidate other assets or create a investor portfolio with a local bank instead of a lender to be able to put less down. Your lender can also discuss ways to boost your credit score to maximize your buying power. LexingtonLaw firm is a great team of experts who may be able to help you clear up or improve your credit within 6-12 months.
2. Realtor – Once you have your financing in place, it’s time to identify possible short term rental ready properties with a great realtor who understands your vision to purchase a short term rental ready property which is different from long term rentals. You may need to educate your real estate broker on the Airbnb or VRBO, platforms since many brokers are more informed on what long term term rental properties look like. Also, make sure your broker is not steering you away from your dream and goals by clarifying what you require to purchase.Your real estate broker ought to be helping you find properties that encompass your specific short term rental needs.
3. Location, Location, Location! A short term rental investment property can be different from a primary residence you call home. Either way you will want to consider the location of your property. What are the surrounding area attractions to draw in your potential guests? Can they easily access restaurants, shopping and amenities by foot, bike or car?
4. Layout – Look for homes with a good sleeping layout. Often short term rental properties are attractive to guests traveling with multiple families, friends and children, so having bedrooms that are spread out and multiple bathrooms is ideal. That way each couple can have their own space. Children might be comfortable in a basement bunk room or loft.
5. Amenities – Once you have worked through sleeping arrangements, the next big draw will be the living/entertainment spaces. One of the main reasons families like to find short term rental properties is the privacy and relaxed environment. Homes with pools, large yards, BBQ areas, pool tables are always popular. Kitchens fully stocked with modern appliances become essential so look for homes that offer these instead of having to invest in new ones. Living rooms and gathering spaces allow your guests to convene comfortably. Should you charge for extra guests in your short term rental, you’ll likely want to add an extra sofa bed or futon in these extra spaces. Parents always appreciate when there is a fenced in yard for the children or a playroom. If you will allow dogs you may want to look for dog doors that are already installed, fenced in yards or dog runs.
6. Finally, read through any home owner’s association rules carefully before you buy. Some associations and neighborhood covenants restrict or even deny the use of homes as short term rentals. It’s important to check city regulations as well. Some also restrict the use of properties as short term rentals if they are you’re your primary residence and/or charge a lodger’s tax on the home. Knowing the rules ahead of time can help you avoid owning a property that is unusable as a short term rental.
Short term rentals are a trend in vacationing and it will only grow in the coming decade. Owning a real estate property is a great investment and owning a short term rental property is an even greater one. Owners with short term rentals net more monthly income than the traditional long term rental and can offset entire mortgages however it’s critical to do your homework up front so you find the right short term rental ready investment.
Heya, Im Rachel and I teach people how to LIVE FOR FREE, GET PAID TO TRAVEL, MEET AMAZING PEOPLE. Home owners can now join the short term rental revolution and start earning passive income on their home rental business. Rent your home or rooms in your home on Airbnb using short term rentals. Learn more on my website at: http://rentalpreneur.com
airbnb.comairbnb; property; household; guests; offering; circumstances; damage; place; concerned; stays; individuals; short term stays; buying real estate; real estate; home purchase; sell home; refinance; investment;