Stories of people making big money from short-term rentals has fueled a mad rush among investors to buy such properties. Who wouldn’t like to have a property that can generate 3 or 4 times the average monthly rent compared to a property that is rented annually? We would all like to have at least one. However, in order not to risk an investment in short incomes, as in any investment, one must also be very cautious and, before making the decision, it is advisable to consider, among other aspects, the following:
1. Hire the services of a real estate agent who understands the short rental market.
Only a very small percentage of real estate agents understand the dynamics of this market; Therefore, it is important to hire an agent who has enough experience in this field. The agent specialized in this rental model not only knows the average percentage of tourists who demand accommodation in the area, but also knows the regulations and tax system that applies; tools that allow you to correctly guide the investor.
2. Invest in properties with a proven rental record .
It can be tempting to invest in newly built properties that are offered for lower prices. However, what is recommended for short rentals is to invest in condominiums that are located in good areas, where the vacancy rate is low, which guarantees solid returns on the investment. Of course, these properties are more expensive but the benefits will offset that higher price.
3. Know the regulations for short-term rentals clearly.
There are very few housing markets across the country that have not imposed rental restrictions on landlords. Therefore, start by investigating whether the building regulations allow it and then it is advisable to do extensive research on the current regulations and proposed laws in the specific city or area where the property is located.
4. Location is the most important factor.
No matter what type of property you buy, it is very important to consider its location. Most tourists prefer to stay near markets, restaurants, beaches, tourist attractions and, of course, close to access to public transportation. The location and type of property to buy varies depending on the nature of the area and its demographics, which is why it is a topic that must be studied very well before investing.
