In this article, you will learn that there are multiple short-term rental property types.
Real estate for short-term rentals has grown rapidly over the past ten years, which is not surprising given how lucrative a business it can be. These properties have the potential to bring in a lot more money than the typical rental property if they are managed properly.
However, if you don't know what you're doing, you will most likely fail, just as you would in any business.
One of the most important considerations when starting to think about a short-term rental business is the type of property you will choose to market to clients.
It's crucial to understand that tenants prefer specific kinds of short-term rentals. Therefore, it would be wise to include one of these in your plan. We'll discuss the many kinds of short-term rentals in this post to assist you in selecting one for your future investment.
The “Waterfront” House
Due to their disparate geographic locations, beach houses and lake houses may initially appear to be two distinct forms of real estate.
However, when it comes to short-term rentals, they are very similar. Both will be in higher demand during the spring and summer. Conversely, you may see lower demand for them during the fall and winter.
Due to the nature of the rental, which is a warm destination with access to water for most people, you'll also discover that these homes function better in warmer climes. If you're looking to purchase one of these homes, bear in mind that demand will be higher the closer it is to the water.
Properties near lakes and beaches will undoubtedly command higher purchase prices.
Think about features that go well with the type of home you are renting out to maximize your profit.
This may include:
- kayaks
- surfboards
- canoes
- paddleboards
- pool floats
- fishing rods & reels
- Balls
You may also consider making jet skis or even boats available to guests, either as part of their rental or as an add-on service you can provide for a fee.
The “Ski Lodge”
Winter getaways, sometimes known as “ski cabins,” are another type of short-term rental that you will frequently see.
These homes are typically located in colder regions, and if they are near a ski resort or have a beautiful view, their value will increase.
Additionally, because these rentals are seasonal, the demand for them increases throughout the winter.
It's crucial to keep in mind, though, that just because a property is seasonal doesn't imply it won't have visitors during the off-season. Even in the summer, certain people might be looking for a weekend trip, and if your property is priced reasonably, it might be their top pick.
When it comes to increasing your revenue from this kind of property, you should pay attention to the décor. You want to create a genuine cabin retreat atmosphere.
That essentially means that you should seek out a home with an inside fireplace. You might also spend money on seasonal accents like lights, mistletoe, and other things, but if at all feasible, try to keep the decorations neutral.
On your list of amenities, include sleds, tubes, extra blankets, and board games for indoor activities.
Last but not least, a hot tub is a much-desired amenity in these homes, and investing in one might yield excellent returns.
The “Urban Rental”
Short-term rental homes close to cities and areas with a lot of people can also be a great choice for temporary housing.
But there are many things that affect how much these properties cost to buy and how much they could make in rent.
To start, the location of the property in relation to the city center (or other busy regions of the city) can have a significant impact on costs and revenue (i.e., profit).
Since space is scarce in crowded cities, the size of the unit is also a significant factor.
To get the most profit out of these properties, you have to rent out new or tastefully remodeled apartments for more money.
It's important to keep in mind that these kinds of homes can be rented out for lengthy periods of time, which can provide a sizable profit. For instance, a person can be seeking a place to stay when relocating to a new city for their home or employment.
In this case, you’re no longer the owner of a short-term rental. You are a “mid-term rental” or even “long-term rental” property owner.
The Residential Residence
The last form of short-term rental we'll discuss is a home in a residential or suburban neighborhood, which is becoming more and more common in the short-term rental space.
These properties are fantastic since they are so plentiful. Select one that matches your requirements and budget objectives.
A current trend in the sector is to buy homes near hospitals or other businesses that need temporary or contract workers. In fact, short-term rental business owners who only rent their homes to traveling nurses have created a thriving niche market.
However, residential homes can be better for mid- and long-term rentals, just like apartments are in cities.
As interest rates rise, prospective homebuyers may find the long-term rental market more appealing because their monthly payments may be lower renting rather than buying.
In any of the above cases, if you don’t already own a property for short-term rentals, you will need to acquire at least one property. Doing so will require arranging financing for the purchase of a residence. Contact one of our dedicated short-term rental consultants to begin the loan approval process.