Buy the RIGHT Short Term Rental - 6 tips that will save time & money

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So you want to buy a short term rental. It is fun to go out and look at property but first there is some homework to do that will save both you and I time, and a purchase you may end up regretting later. Stay tuned for my 5 tips for what you need to look for when purchasing a short term rental! Hi, I’m Mindy Nicol, short term rental host and realtor, here to talk help you make the right next purchase!

1. TIP #1 - Criteria: Does it fit the city’s STR criteria? Not every home should be a STR and even it if previously was, it is still your job to see if the potential is there – or what is allowable within the city you are looking. Look at the property listing and answer these questions
2. Number of off street parking spots
3. Location – is it somewhere visitors will want to stay?
4. Flood zone – here in Florida, also flood history
5. Curb appeal
6. Any amenities or possible room for some. St you apart on platforms
7. Property zoning – is STR allowed and what are the restrictions?
8. TIP #2: What would it need to be a STR? Does it need furniture, updates, or décor changes, and if so what would that cost? $5-$15K sq ft.
9. TIP #3: What can you afford? Take a step back! This is where we see how much cash you have to put down and handle the start-up of the business (furnishings, supplies, updates etc). Then we need to look at occupancy rates, your nightly rate, seasonality then project out what it would cost and if it would cover all expenses. We can then fine tune the search to a list price that makes sense for you. Start with a property you like online and create a spreadsheet from there.
10. TIP #4: Estimating all ongoing operating expenses to see if it would cash flow. Remember with a short-term rental all expenses are yours to pay, i.e: pest control, lawn care, power, water, trash, internet and cable.
11. TIP #5: Know your location’s seasonality. Identify the slow months. You may need a few months costs covered in your reserve account to cover these lulls in bookings, whether seasonal, or weather event related.
12. TIP #6: Putting cash aside for your fully funded reserve account. Things can go wrong and if the AC breaks it can make or break your business. Ensure you have enough funds to get you through emergencies and slow months. Estimate this cash aside from what you plan to put down and then look at your budget for the purchase again.

Now you are ready to:

1. 1. Talk to a lender about what you qualify for based on your personal financial situation
2. 2. Talk to me or your realtor about a showing schedule based on your criteria. Let’s pull together a short list of available homes within your criteria. If we are not working together make sure you choose a good realtor who understands investment properties!

Do your homework and save time and money. Reduce the potential of buying something that does not work for the business you want to build.  See my video on this topic below!