GMAC Real Estate – Rental Properties as a Real Estate Investment: Short-Term Vacation Property Investment
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Short-Term Vacation Property Investment

Takeaways

  • Short-term renters have different needs and interests than long term renters.
  • If you wish to make a profit on short term renters, be sure to buy in a location with a steady stream of year round visitors, or very high demand during peak season.

Did you know?

  • If your investment home is not close to your personal residence hire a property management company to look after the home.
Many short-term rental investment homes are in resort areas. If your rental property is a vacation home, your priorities will be somewhat different than if you are investing in long-term property rentals.

The key is finding a vacation property that is desirable to you as a personal vacation getaway and potential retirement home and one that is in a location that will draw a steady stream of short-term renters.

  • When you're buying, seek a real estate agent who specializes in second home and vacation rental properties and knows the market.
  • After you have purchased your vacation rental, take advantage of every possible source for marketing your vacation property: the Internet, a listing agency, and print publications. For instance if your vacation rental condo is in Florida, attract the winter visitor (snowbird) market by advertising in publications in the Northeast and Canada. If your property is a luxury home, you should consider advertising in magazines that attract an upscale readership. Search engine internet advertising is also a possibility, and probably easier than you think.
  • Make your rental stand out from the masses with special touches. Short-term renters say some of their favorite touches include information on local attractions and activities, restaurant recommendations and menus and local discount coupons, a treat basket of snacks, coffee and teas, and a DVD or CD player with movies and music selections.
  • Word of mouth fills many vacation rental properties. Encourage repeat rentals and referrals. Offer incentives like discounts, referral fees and off-season specials.

If you do not live near your rental property, you’ll need a local contact – preferably a property management company to handle rentals, clean-up and ongoing maintenance. Depending on their services, they may also be able to refer potential renters, for a fee. A local real estate professional can help refer you to a reputable firm.

Short term vacation rentals offer many opportunities, but they do create special tax considerations. Consult with a tax accountant about tax implications of short-term rentals.

Learn More About Investing in Rental Properties

To learn more, explore the advice on Rental Properties in this section of our site. You can also learn more about Rental Properties in our expanded section on Second Homes. To find properties in your area, please contact a local GMAC Real Estate office, and talk with a Real Estate agent about opportunities for investment.