Short Term Rentals / Vacation Homes - What Is Most Important For You?

Question

For those owners or folks who are looking to purchase a Vacation Rental, what is the most important part of owning this investment for you?  Most of my clients over the years have cited the ability to use the home for friends and family members and have it cover some or all of the costs of ownership.  When you think about this purchase, what stands out the most?

Zach Edelman · Answer

Cash on cash return, multiple exit strategies are two great ones. I'd also say the probability/likelihood of future regulations. Although you can't predict this, it is certainly worth considering. For example, true vacation markets offer a lot less risk of future regulations than urban markets do. So if numbers pencil similarly for a deal in a vacation market as for an urban market, and potentially even slightly worse, it could still be worth investing in said vacation market instead of said urban market.

Collin Hays · Answer

Return On Investment, primarily from price appreciation.  A vacation rental should at least be able to mostly pay for itself.

The ability to use it doesn't make my top ten.  I can rent a nice place for a week most anywhere.

Huy N. · Answer

these are all great answer above. I would add in the ability to add an ADU later in the property to boost the income

Sarah Kensinger · Answer

Multiple exit strategies and COC return are top of the list! It may cross our minds if the area is a place we would visit, but more often than not the cash-flow is a higher priority.

Andrew Steffens · Answer

1 - ROI

2 - Area Regulation Climate

3 - Economics of the area

4 - Appreciation

5 - If it is a place I could see myself using that is a bonus but not essential.

Nathan M kiefer · Answer

1. No str restrictions, many on this forum will tell you it's like finding a unicorn but those areas do exist and for good reason.

2. Cash flow, we don't buy any properties less than 50% of what they're worth, all our properties we own make positive cash flow in a modest way and these tow items are deal breakers if they don't pass that's test for us on str.

V.G Jason · Answer

It's ability to also be a long term rental if need be. I'm very rarely leveraged on STR, so more then often it can be a LTR.  Otherwise, uniqueness of property and area, but also limited to no accessibility constraints and limited to no hotel presence.

Short Term Rentals / Vacation Homes - What Is Most Important For You?

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