Getting involved in the vacation rental business.

Getting involved in the vacation rental business.

  • Posted: May 24, 2016
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Are you thinking about purchasing a short-term rental in a resort or vacation area? Are you thinking about purchasing a short-term rental in a resort or vacation area? Or otherwise getting involved in the short-term vacation rental business? Understand what you’re getting into before you buy. There are a number of specific considerations rental real estate investors should be aware of before purchasing these properties. Continue reading to learn about six of these considerations. 1. Enjoy the Property Yourself Considerations for those who want to purchase vacation rental properties For many people, the best way to own a vacation rental property is to enjoy it themselves. That is, purchase your own vacation home because you enjoy using it yourself.You can rent it out when you’re not using it to offset the expenses of ownership, but it’s very difficult to make a short-term vacation rental a cash-flow positive property in its own right. 2. You Need Additional Insurance Most landlords understand that a standard homeowners insurance policy isn’t sufficient if they plan to treat their property as a residential rental. That’s why they get special landlord insurance policies. But even your standard landlord insurance policy won’t provide adequate coverage if you own a short-term vacation rental. In these cases, you’ll need something closer to commercial liability insurance. Here’s why: your landlord or homeowners insurance doesn’t cover business activities conducted in the dwelling. But in a vacation rental, everything that happens on the property is commercial activity! Furthermore, in most cases, your personal umbrella insurance coverage won’t protect you against claims arising from your business. You’ll have to get this protection from a separate policy in addition to your personal liability plan as it isn’t designed or priced to provide commercial coverage. 3. Marketing Costs More Than You Might Think Marketing a vacation rental is a resource-consuming but necessary task. In most cases, vacation rentals have a lot of competition from local hotels, motels, bed and breakfasts and RV parks. Many of these businesses have professionally designed websites with excellent photography, so it’s necessary for vacation rental owners to do some marketing of their own to make their properties stand out. Well-produced video tours of vacation rentals can help book renters. While these videos aren’t free and usually aren’t cheap, remember that nothing is more expensive to a vacation rental owner than a cheap-looking website that doesn’t adequately sell their property!   http://sfpma.com/listing/fort-lauderdale-stays/  …

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