Owning a short-term rental property is such a sexy idea. Television and the Internet put visions in our heads of guests flocking to book our farm house or beach themed get-a-ways while we kick back at an even better luxury resort and laugh all the way to the bank. Seems like the perfect side hustle and will lead you to early retirement, but is it really all it’s cracked up to be? Here’s a behind the scenes look at what no one is telling you about the life of being a landlord.
The first rule of thumb in any type of real estate transaction no matter what type of property you are buying: house, condo, cabin, etc. is location. Don’t assume just because you build it, they will come. Make sure your rental property is in an area that’s desirable in terms of vacationing. Renters generally don’t want to come sit and do nothing; they book for the experience your property has to offer.
If the location of your property has little to offer, budget for creating a space that gives guests direct access to all the desirable amenities. Pools, hot tubs, saunas, game/rec rooms, fire pits will all help attract guests to book year-round in a town with little to do or a remote location.
Don’t assume you’ll make friends. Sure, you love hosting and entertaining but most guests want their privacy they aren’t looking to make connections. In addition, don’t assume your guests will be as clean or respectful of the property as you might be. It’s not realistic to think you won’t ever have to clean a mess, tend to a stain, repair a wall, replace broken décor and so on. Which also reminds us, you may not be able to afford a property management or cleaning service right out of the gate and you’ll need to be close enough to travel to the property to attend to any issues that occur while your guests are there. (Broken toilet/pipe/window and so on.)
You’ll also want to factor into your budget, everyday use products. Replacing kitchen items and keeping up on freshly laundered towels along with items like paper products, soap, trash bags and the like will all add up over time. In fact, make sure you go over and over and over your budget until you are sure you can afford the property even if it goes weeks, months or longer without being rented. *Remember to factor in the cost to market property whether you build your own website or use an app.
Our final piece of advice to get some pretty thick skin. If you hate confrontation this may not be the investment path for you. No matter how hard you try, some Goldilocks will leave a review that your bed was too hard or too small and the shower to cold. There will be last minute cancelations and times when you have to discern how much you’re willing to budge from your own policies and rules to be accommodating. After all, this is the hospitality business and remember, the customer is always right! These are just some of the realities but don't let it defeat you, owning a rental property can be the financially freeing adventure!