Buying a Short-Term Rental?
Purchasing the Right Home for Short-Term Rentals
Approximately 70% of the homes in Summit County are second homes, and many of the second homeowners choose to short-term rent their homes when they aren’t using it.
When buying a home with short-term renting in mind, it’s important to purchase a home that meets a few essential considerations for long-term success with the rental.
We created a list of primary considerations when considering a home for short-term rentals and please contact us for additional information.
Is there a Rental History/Reviews?
If you plan to short-term rent your home, be sure it’s compliant with all regulations.
Let’s look at the usual regulations which need to be considered:
Localities – Does the town allow short-term rentals? In Summit and Park Counties, the towns generally allow short-term rentals. However, there are regulations in place in most towns for items such as the maximum number of people in a home and safety compliances.
HOA – If you have an interest in a home, be sure to check the HOA covenants and their approach to short-term rentals before you make an offer on the home. The HOA guidelines can vary.
Typically, HOA guidelines for short-term rentals will fall into the categories:
Short-term rentals are fine
Short-term rentals aren’t allowed
Short-term rentals are allowed, but only for periods of at least 30 days or longer
Short-term rentals are allowed, but only for a set number of rentals per year.
When your short-term rental is ready to be rented, be sure it’s registered with the town and meets all compliance and safety regulations.
Location is important for short-term rentals. Unless it’s intended to be a “retreat” type setting away from town, convenience is an important consideration.
With every property, there’s a compromise, but for most properties in Summit County, for a good short-term rental, it’s nice to have these nearby:
Restaurants and bars
Summer and Winter equipment rentals options
Near bus route
Near ski lifts (Breckenridge, Keystone, Copper Mountain)
Occupancy - Most town regulations will allow 2 people per bedroom, plus 2 – 4 additional people (depending on the town).
However, it’s a good idea to favor the rule of 4 people per bathroom for a couple of reasons.
First - some HOA Covenants will specify only 4 people per bathroom for rentals.
Second – If we have, for instance, a 2 bedroom, 1 bath home, town regulations will state that between 6 and 8 people can use the rental. However, that’s no fun for the renters; 4 people per bathroom makes for a better user experience.
Kitchen – be sure that that Kitchen is large enough to accommodate the occupancy level of the home.
Entertaining / Living area – Confirm that this is large enough for the occupancy level of the home. An open kitchen and living area combination is ideal.
Owner’s Closets/Storage – At least one closet that can be set aside for the owner’s clothes and other items is ideal.
Keyless Entry - A great way to not have to handle any keys; wireless keyless systems allow the homeowner to change passcodes.
Strong Internet – No skimping with the strength of the internet signal. For a solid guest experience, be sure to have a strong and capable internet set up that won’t lag when the guests are all trying to get online.
Grills – If the HOA allows grills, be sure to include a quality grill as part of the rental.
Condition - It’s not a requirement for the home to have the latest and greatest interior.
However, it does need to be in good shape and very clean.
Some homeowners don’t want to rent their homes because they’re afraid of the wear and tear on the home.
We’ve found that homes with frequent short-term usage are in often great condition; they’re well cleaned after every rental, and those renting the homes typically treat the home well.
Is there a Rental History or Reviews?
Often when a home has been short-term rented, there’s a rental history with the home.
A home with good online reviews is a positive for the home. It can take six months or so for a new short-term rental to build up its reviews, and they’re important for those considering whether to rent the home. The home will often have a following of renters who will return to the home the next year while also referring it to other short-term renters.
When considering purchasing a short-term rental, the rental history numbers can be misleading if they’re on the low side. Homes that have been used a fair amount by the owners will automatically have lower rental numbers.
Also, if the short-term rental company hasn’t been marketing to its full potential, this will lower the rental numbers too.
If you have any questions regarding short-term rentals or would like additional information about short-term rentals, please contact us.