Rental property can often be a lucrative investment. However, the payoff for owning this type of property hinges on the location of the rental, local zoning laws and more. If you are considering purchasing short-term rental property, you will benefit from first carefully evaluating the potential benefits and drawbacks of this decision. There are various factors that could affect the success of your investment.
Short-term rentals are popular in high-traffic areas, such as metro areas, neighborhoods near colleges and universities, and tourist areas. When short-term rentals are successful, it can be quite a payoff for the property owner. However, there are definitely some risks involved, and you will benefit from an evaluation of the benefits and drawbacks before you make any important financial decisions.
The pros and cons
Purchasing a residential property for the purpose of having a short-term rental or using your own home as a short-term rental is a major decision that can impact you for years to come. This decision is worth taking the time to evaluate both the pros and cons of moving forward with this choice. Some of the benefits of owning short-term rental property include:
- With short-term rentals, you have more control over the number of days a person can rent, giving you flexibility.
- You can often bring in more money than you would with a long-term rental, and there are tax benefits available to you.
- There could be less wear on the property with short-term rentals, saving you time and money long-term.
While there are many benefits to owning short-term rental property, there could be some drawbacks as well. These may include:
- There may be less consistency in the payments you are receiving when not renting the property.
- You are responsible for utilities and other expenses associated with the property, even if no one is occupying the property.
- It will require more effort on your part, and there could be more risk for you with a short-term rental.
One of the most important considerations for individuals who plan to own and operate short-term rentals is the HOA and local zoning designations. Before you buy or list your property as available to rent, you may benefit from speaking with a legal professional regarding how these things could impact your goals for the property. Understanding your Pennsylvania property rights and limitations may help you make beneficial and practical decisions.