Short Term Rentals
Are You Considering Short Term Rentals in Your Investment Portfolio?
In today’s world, short term rentals, like Airbnb, are extremely popular. Many people start their search for lodging when traveling on Airbnb or similar websites. Since you typically spend more on lodging while on vacation or business travel than you would rent, these short term rentals have the potential to be profitable investments. But is it a good decision for your personal portfolio?
As with most real estate investments, costs such as utilities, maintenance, and repairs must be factored into the mortgage payments. But there’s also regular cleaning costs, taking the time to act as concierge or paying someone to perform the job for you, and keeping the furnishings and textiles in tip top shape to keep up with the neighborhood competition. After all, the popularity of your property will be dependent on how your guests rate their stay. And don’t forget to account for the 3% service fee charged for each reservation.
Since this type of investment is still relatively new, many city councils have set up rules and regulations but are making adjustments as the effect on the local economy is realized. That means you may have restrictions such as how long you can rent the property out. Do you, as the owner, have to be present? How will this affect your property taxes and homeowner’s insurance? What if a guest is injured in your home? What will your Homeowner’s Association say? What happens if the rules change after you purchase your property and have gained some momentum?
Join us on November 15th for NOREIA’s main monthy meeting to learn the answers to these questions and more! Our guest speaker will be Eric Bay, President of Alliance for Neighborhood Prosperity, and he will discuss the ins and outs of Airbnb in our local market. Hearing success stories as well as learning from other’s mistakes can give you knowledge and wisdom that might be invaluable in your future endeavors. As a smart investor, you will want to minimize your risk and maximize your income, which requires research and networking with people currently using this strategy. This meeting is the perfect opportunity!