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3 Tips For Navigating The Expanding Short-Term Rental Real Estate Niche

Uncategorized Mar 16, 2019

There is a movement across America in city governance, municipalities, townships, homeowners associations, condo associations — in fact, anywhere that can impose legislation and regulation — and it’s growing. This expansion impacts second-home buyers everywhere, and it’s something real estate professionals need to understand.

The short-term rental market is no longer the domain of popular vacation destinations. The growth of Airbnb has sparked interest by investors in cities and towns across the nation, and just about anywhere that attracts inbound travelers for any reason, is now a target for short-term rental potential.

This highlights a concern in many areas — that the expansion in this market is contributing to a housing shortage because there is the potential that units traditionally rented long term may be turned over to this more lucrative income stream.

It also generates arguments between residents who want to maintain a sense of community on one side and owners who want the right to create income from their properties on the other.

Cities such as New York, San Diego, and San Francisco have been entangled in legalities over short-term rentals for years, with new legislation being proposed every day in cities and municipalities everywhere.

As the industry continues to expand, this trend toward regulating will be felt in every area, so it’s worth acquiring a solid understanding of what’s happening where you sell.

So what does all this mean for Realtors?

1. There will be more investors coming into every real estate market who want to know about short-term rental potential.

They want information about expected occupancy, rates, guest expectations and property management options.


2. Your knowledge of current and pending rental legislation will be crucial to their buying decisions. 

This means knowing what areas permit rentals, any licensing and permit requirements, specific community restrictions, and zoning limitation that may be buried deep in bylaws (and could be applied at any time).  Where HOAs have control, you'll need in-depth knowledge of their governing policies.  Learning 


3. Investors in this type of property are typically multi-property purchasers...
 

...so landing a great deal on the first property purchase means they will come back to you for the next … and the next.  All the more reason to learn the vacation rental business thoroughly; know the questions they will ask, and have the answers to hand.  Build a website that demonstrates your knowledge of the short-term rental industry and how you can assist your investors to buy wisely and successfully. 

From an investor’s viewpoint, working with a Realtor who really knows the short-term rental market has huge benefits, so doing the research to understand this niche market is worthwhile.

 

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If you have these figures ready for your clients during your initial consultation, it will be the key to securing a contract.