Five Factors to Consider Before You Start a Short Term Rentals Business
Are you thinking of starting a short term rentals business? If yes, then that will be one of the best decisions you will make this year. The demand for vacation rentals has been increasing in recent years, making them an ideal investment opportunity. However, whether you are planning on making this your main job or part of your retirement plan, don’t invest in it blindly. Ensure that you consider the factors below.
Familiarize Yourself With the Laws
Some local governments have laws that prohibit homeowners from offering rooms or floors of their homes for short-term rentals. These laws might seem unfair because, after all, it is your home, and you should be free to do what you want with it. Still, you must follow the laws. In respect to that, make sure you find out what the local laws say about offering vacation rentals before you take any other step. Doing so is essential if the last thing you want is to end up being apprehended.
The Type of Rental Allowed
Most people envision vacation rentals to be a fully-furnished, spacious apartment in the heart of the city or on the beach. However, there is more to it than you may know, and the definition changes depending on the local laws.
For instance, in Chicago, a short-term rental property is any dwelling with six or fewer sleeping rooms for rent. Therefore, if the local laws allow, make sure you also find out the type of rentals that the local government expects from anyone with the idea to start.
The Competition
The goal of starting any business is to make profits. Therefore, don’t just venture into this business because everyone is doing it. Take a plunge only if it will be fruitful. Concerning that, take the time to research your competition. Find out how many hotels, motels, and other rentals are around you. If the competition is high, then it will be ideal to find another location with less competition.
If the competition is low, don’t be too happy about it as this might mean the demand for rentals in this area isn’t that high. Therefore, also take time to find whether your competitors get clients. If competitors rarely get rented out, it would not be meaningful to start your rentals in such an area.
Time Commitment
A short term rentals business might be more flexible, but it is still an investment. That means it requires someone to run it. You need to ensure that it is always clean. You also need to ensure that there is someone to handle the booking process. It is also advisable to be there or have someone to help your guests with the check-in and check-out process.
Additionally, it would help if you also were easily accessible in case your renters need to inquire about anything. In a nutshell, you need to be present or hire a property manager. Therefore, it’s wise to consider this factor because if you can’t be available and can’t afford a property manager, your venture won’t be successful.
Landlord Relations
If you own the space in which you plan on starting the business, then you don’t need to worry. However, if you’re planning on renting out the area, you and the landlord must agree. Some people often start short term rentals business without informing their landlords.
While it works out at first, it brings a lot of unnecessary conflicts in the end. Therefore, ensure that you let your landlord know your intentions before anything. That way, you can have peace of mind knowing that your guests won’t be disturbed by an angry landlord.
The vacation rentals industry is growing fast. It is a profitable area to venture in, but ensure that you keep the above tips in mind so that you can set everything smooth sailing.