What Buyers Should Know About Short-Term Rentals – Texas REALTORS®-2021十大正规彩票app

August 01, 2022

Check Local Rules and Regulations

Read local zoning rules, municipal ordinances, and restrictive covenants concerning STRs. These can determine which properties can be used as short-term rentals. Some local governments do not regulate STRs in any way, while others do not allow STRs at all. Many local governments require certain conditions be met and may require a permit. Ordinances and restrictive covenants related to parking, noise, occupancy limits, the total number of STRs allowed, and other rules vary, sometimes even from one neighborhood to the next.

Not Every Property Will Be Profitable

Consider location, amenities, and appeal before purchasing a short-term rental. Vacation spots with nearby attractions are always a plus, as well as properties that can welcome several types of clientele, including families, business people, and tourists. Also, determine if the area has an oversupply of existing STRs, making it harder to rent out yours.

Inconsiderate Guests Can Create Issues

Disruptive behavior by tenants can lead to complaints and possible revocation of your right to rent your property on a short-term basis. Clearly communicate noise, parking, and other rules, and deal with any problems swiftly. Some owners require a large security deposit to discourage rowdy tenant behavior.

Be Aware of Taxes

Know that only your primary residence is eligible for certain property-tax protections, such as a homestead exemption and the 10% appraisal-value cap. You might also want to consult a tax professional to determine how your short-term rental will affect your federal income taxes.

Focus on Durability and Efficiency

Furnishing a short-term rental is not like outfitting your own residence. Use furniture and fixtures that can withstand rough treatment. Also consider installing Wi-Fi thermostats and smart lighting—and leave instructions on how to use any uncommon devices. Don’t assume everyone is familiar with the latest technology.

Is it Safe and Secure?

Pay careful attention to the safety and security measures of your STR. Be aware that local governments and restrictive covenants may have additional requirements for short-term rental properties, including inspection requirements. In addition to meeting requirements to install smoke and carbon monoxide detectors, you may want to use a front-door lock that allows you to remotely change lock codes between occupants. Post signage for potentially hazardous areas of the house, inside and out.

The Loan Process Works Differently

Many lenders will not finance short-term rentals or have different requirements to approve a loan. It’s important to inform the lender upfront that the property will be utilized as an STR.

Are You Covered?

A regular homeowners policy may not cover you for the risks associated with a short-term rental. STR listing platforms like Airbnb and Vrbo provide some insurance coverage, but speak with an insurance professional to determine if you have the coverage you want.

Give Guests What They Expect

You would save money by not providing Wi-Fi or a TV or towels, but skimping on expected items could disappoint people and lead to critical reviews. If your property does have obvious limitations, be upfront about it.

Get the Highest Return with a 5-Star Experience

The income from your short-term rental is tied to how often you rent it out and how much you can charge—and those factors depend in large part on good reviews. You’ll get top marks by keeping your property clean, staying on top of maintenance and repairs, responding quickly to requests, and providing extra touches, such as coffee and tea supplies, information about nearby attractions, and extra phone chargers.

Consult an Attorney for Legal Advice and Documentation

If you are not using a listing platform like Airbnb or Vrbo, it is best to hire an attorney to prepare the necessary paperwork and advise on other matters. An attorney can also advise you on what protections listing platforms provide STR owners. REALTORS® are prohibited from providing legal opinions or advice.

Hire REALTORS® to Help You Purchase and Manage the Property

All REALTORS® pledge to abide by a Code of Ethics that goes beyond what is required by law, so you can rest assured you are working with a professional who has your best interests at heart. Some REALTORS® may be able to help you find and manage a short-term rental, while others specialize in just one of those areas. A REALTOR® can reduce hassles, relieve your stress, and help you reach your real estate goals.

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