How to Find the Right Short-Term Rental Space

Identify What Kind of Rental You Want to Offer

Before you get started scoping out different rental properties, it’s important to understand what kind of rental you want to offer first. In this industry, decisiveness and determination are key to the success of any property owner.

Short-term rentals can range from bed and breakfasts to weekend-long retreats, and establishing a point of focus will ensure that both you and your potential clientele are clear on the services you provide. Knowing how you’ll want to market your short-term rental property before you’ve committed to it will give you an edge when it comes time to finally spread the word on it.

Find an Appropriate Location for Your Rental Vision

Once you’ve decided what kind of rental you want to provide, the first step to finding the perfect property is finding the right location for your goals. For example, in the case of beachside rentals, there is a wide range of options that allow property owners to attract a variety of renters. Understanding your target market and finding a property that fits their needs will, in turn, allow you to become the most effective property owner you can be.

Know Your Limits

Enthusiasm is crucial in real estate investment, but it’s also just as important to keep a level head about your short-term rental goals.

If you want to provide a short-term rental in a bustling city, but your home is almost an hour outside of the nearest city, maybe a more local property would be appropriate. Property ownership can also be a massive financial commitment for newcomers, so it’s best to seek out properties that work with your budget. Becoming a property owner is a daunting enough task on its own, and prospective owners shouldn’t jeopardize their dreams due to unnecessary stress.

Research the Market

The real estate industry can seem complex to an outsider, but dedicating time to comprehensive research allows you to better understand the market.

Learn About Your Local Economy and Real Estate Essentials

The real estate market in one city or state won’t always be the same as the market in another, so learning about your local economy and market standing can allow you to make smarter investment decisions. If you know of any local real estate experts that are willing to dedicate time to mentor you, seeking them out can be a great way to learn the essentials of the industry and give you an edge. You can’t build a house without the right tools, and you can’t build a successful short-term rental without the proper knowledge of what you’re getting into.

Identify Potential Competitors

Real estate investment can be a competitive game, with many property owners taking whatever advantage they can get to bring more renters into their building. Getting a sense of who you might be up against can allow you to figure out why other property owners are successful, why some might be faltering, and take advantage of any opportunities you can find along the way.

If a local property doesn’t provide laundry services, for example, making a point to include a washer and dryer in your rental could be a deciding factor for renters that gets them into your building and keeps them away from competitors. Being a short-term rental owner is all about filling a need, and if you can fill more needs than the competition, then you’ll have a serious advantage in the long run.

Capitalize on a Good Investment Opportunity

Sometimes, there can be so many short-term rental investment opportunities that it becomes difficult to decide which one is best for your specific needs. There will hardly ever be a perfect investment opportunity, but picking the one that most comprehensively suits your goals is the best way to get started.

Time is Money

Patience is key in any real estate investing, but what’s just as important is the ability to make a decisive decision and commit to it. If you find a short-term rental space that fits the majority of your needs, it’s better to jump on that opportunity instead of hesitating for fear that something even better might come along.

Be Prepared to Make Some Sacrifices

Just as you should be prepared to make firm decisions when looking for a short-term rental, you should also be prepared to make sacrifices about some of your goals as a property manager. If there’s a property that fits all of your needs but is way out of your budget, you can either look into short-term rental specific financing or find something more reasonably priced that has one or two shortcomings. While things like location can’t always be controlled, if a property doesn’t have all of the necessary amenities immediately, you can upgrade it over time.

Get Ready to Be a Rental Host

Finding and buying the right short-term rental property may seem like the most daunting part of the investment, but in reality, it’s only half the battle. Being a rental host is the most crucial part of making people feel like they should choose your property, as it puts a face and a name to the place that they will be temporarily staying in. Making yourself available to your tenants shows them that the place they’ll be staying in has received the care and attention of someone committed to their satisfaction, and it’s a great way to build a regular clientele.

Make Sure You Are Properly Protected Legally and Financially Secure

In addition to being available for your tenants, it’s essential to ensure there won’t be any legal or financial issues while renting out a short-term space. Consult with a lawyer to gain an understanding of your region’s regulations and restrictions, as well as your rights as an owner and the rights of your tenants.

Another item to keep in mind is that with so many guests cycling through your rental, you want to ensure that you are adequately protected if an issue were to arise regarding guest liability or property damage. Obtaining short-term rental insurance is a must when operating a business like this due to the increased risks. There is a common misconception that owners can rely on their homeowner’s policy for coverage, but typically ‘business activity’ is listed as an exclusion, leaving you without coverage. It’s important to check with your current insurer to see if you’re covered against injuries, theft, or damage caused by paying guests. Proper Insurance understands the risks associated with short-term renting and that’s why we’ve custom-written a commercial general liability policy specific to short-term rentals.

Protect Your Investment and Your Business

After all of the time you’ve spent looking for the perfect property, it’s only fitting that you have the best coverage to protect your investment. Proper Insurance provides vacation rental hosts with a policy that’ll protect you and your business from liability and damage claims. They lead the Nation in short-term rental insurance, with over 100,000 policies written in all 50 states. Backed by Lloyd’s of London and exclusive endorsements from short-term rental leaders such as Vrbo, Proper Insurance is built on world-class insurance coverage that meets and exceeds both city and lender requirements.

Guest post written and provided courtesy of Roni Davis, a writer, commercial real estate investing blogger, and legal assistant operating out of the greater Philadelphia area.