So you want to buy a short-term rental property?

Real Estate Agent with COMPASS RE See Skills

Short-term rentals, such as vacation homes and Airbnb properties, are a great way to invest in real estate. They have become increasingly popular in recent years as travelers seek more unique and personalized accommodations, compared to the big brand hotels. However, buying a short-term rental is not the same as buying a traditional long-term rental or primary residence. In this blog post, we will discuss some important things to consider when buying a short-term rental property.



Location is one of the most important factors to consider when buying any type of real estate, and short-term rentals are no exception. You will want to choose a location that is popular with tourists and offers a variety of attractions and amenities. Consider factors such as proximity to beaches, hiking trails, skiing, and theme parks, to name a few. Like any real estate, access to restaurants, bars, and shopping areas will also be important.



Before buying a short-term rental, it is important to research the local regulations regarding short-term rentals. Some cities and states have strict regulations regarding short-term rentals, such as the requirement to obtain a permit or limit on the number of days a property can be rented out each year. This issue can be further complicated by homeowner’s or condominium associations, so checking with all regulatory bodies is important. Failure to comply with these regulations can result in fines or legal action.


Property management

Managing a short-term rental property can be time-consuming and require specialized skills. Short-term rentals require more involvement than a long-term traditional rental. You will need to consider whether you want to manage the property yourself or hire a property management company. A property management company can handle tasks such as advertising, booking, cleaning, and maintenance, but will charge a fee for their services.



Standard homeowners insurance may not provide adequate coverage for a short-term rental property. You will need to purchase special insurance policies that cover short-term rentals, such as vacation rental insurance or landlord insurance. These policies typically cover liability, property damage, and loss of rental income.


Property condition

The condition of the property is important when buying any type of rental property, but it is especially important for short-term rentals. Travelers expect a high level of cleanliness and comfort when staying in a short-term rental property. Make sure the property is in good condition and has all the necessary amenities, such as Wi-Fi, air conditioning, and kitchen appliances. If the property isn’t already turn key, then you’ll need to consider how you will make improvements. Think about managing contractors, budgets, and timelines. This becomes increasingly challenging if the property isn’t located close to home.


Market demand

Before buying a short-term rental property, it is important to research the local market demand. Look at occupancy rates, average nightly rates, and seasonal fluctuations in demand. You will want to choose a property that has a high occupancy rate and can generate enough income to cover expenses and provide a profit.



The amenities that are important to short-term rentals can vary depending on the type of rental, location, and target audience. However, some common amenities that are often sought after by short-term renters include:

Fully-equipped kitchen: Short-term renters often prefer to cook their own meals, so a fully-equipped kitchen with appliances, cookware, and utensils is essential.

Wi-Fi: Most travelers need access to the internet for work or leisure, so a fast and reliable Wi-Fi connection is important.

TV and entertainment: A TV with cable or streaming services like Netflix or Amazon Prime can make a stay more enjoyable.

Comfortable furniture: A comfortable bed, sofa, and chairs can make a short-term rental feel more like home.

Laundry facilities: Access to a washer and dryer can be a major convenience for travelers who need to do laundry during their stay.

Parking: If the short-term rental is in a city or urban area, access to parking can be a major selling point. Think about properties with wider driveways, garages, or buying in a neighborhood that allows street parking and has ample access.

Air conditioning and heating: Depending on the location and season, access to air conditioning or heating can be important for guest comfort.

Safety and security: Short-term renters want to feel safe and secure in their accommodations, so features like a secure building entrance or a locked safe for valuables can be important. Also consider properties in gated communities, or installing a security system that's easy to use.

Outdoor space: A balcony, patio, or garden can provide an enjoyable outdoor space for short-term renters to relax.

Pet-friendly: If the short-term rental allows pets, this can be a major selling point for travelers with furry companions. You'll want to balance this with the inevitable extra wear and tear that comes with pets.

Recreational gear: If the property is in a beach area, you may want to provide beach gear like chairs, umbrellas, and a beach cart. If it's by a lake, consider providing canoes, paddleboards, or fishing gear.  


In conclusion, buying a short-term rental property can be a profitable investment, but it requires careful consideration and research. By considering factors such as location, regulations, property management, insurance, property condition, market demand and amenities, you can make an informed decision and maximize your returns. As always, it’s important to work with a REALTOR who understands the difference between buying a primary residence and an investment property, and has experience in this area. As real estate investors ourselves, we understand the unique challenges and opportunities that come with buying an investment property. Get in touch with us and let’s talk about your goals!

Comments (1)

Kristin Johnston - REALTOR®
RE/MAX Platinum - Waukesha, WI
Giving Back With Each Home Sold!

Great post!  Thanks for sharing and enjoy your weekend!

Mar 31, 2023 07:35 AM