If you’re a real estate investor who’s having a tough time filling a property, should you look at the short term rental market? here’s what you need to know.
Are Short-Term Rentals Profitable?
Short term rentals can be profitable, but they’re not a permanent solution for many investors. However, in some areas, it does make sense to use a property for short term rentals only. For example, if the property is in an exciting vacation destination, a metropolitan area, or near a big attraction, it may make sense to rent it out one week (or one weekend) at a time.
Related: Are there downsides to hard money loans?
What About Local Rules?
Some cities have regulations on short term rentals. In fact, some don’t allow rentals for fewer than 30 days. You need to check local rules and regulations to ensure that you aren’t running afoul of the law by renting out a property for a short period.
Additionally, you need to make sure that you don’t violate fair housing or anti-discrimination laws in renting your property. You may need to speak to an attorney to stay on the safe side.
Related: When is it a good idea to get a hard money loan?
Cleaning and Other Costs Associated With Short-Term Rentals
If you rent a property out for the short term, you’ll need to pay a cleaning company to come in after each rental. You’ll also need to collect security deposits, or be prepared to pay out of pocket for any damage that short term renters do to the property.
Should You Use a Short-Term Rental Site?
If you choose to open your property for short term rentals, the best way to reach the biggest audience is through a rental site. However, be aware that it costs money to list your property on those sites, and you may have to pay a portion of your proceeds from a rental for the listing.
Related: What are the down payment requirements on a hard money loan?
Do You Need a Hard Money Loan?
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