The short-term rental market has exploded since the Covid-19

pandemic. As America’s workforce raced home, people realized that they

could work from anywhere. Coupled with the desire to isolate oneself

and family from other people during vacations, created a strong demand for

short-term rental properties. As the trend boomed, large and small investors jumped

into the stream and bought properties to market as short-term rentals.

Owning a short-term rental can be a great investment. In addition to the incremental

income, the home appreciates in value, and the owner may even find time

to use the property themselves. But owning this kind of rental isn’t as easy

as putting a lockbox on the door and washing the sheets. Before investing

in a short-term rental, consider these 5 things.

1. Local Zoning and HOA Rules – This may seem obvious, yet every

year people buy homes intending to use it as a short-term rental only to find

that the local authorities prohibit that kind of rental. Often, one must rent the

home for 30+ days as part of an HOA or local zoning law.

2. Property Management – The wrong property management company

can cost the homeowner time and money. Bad reviews, property damage,

and mismanaged funds are just a few of the problems caused by the wrong


3. Property Condition – While it’s important to buy a home the owner can

handle, simple cosmetic changes are easy to fix for a home in the right


4. Personal Taste – One of the biggest mistakes investors make is to buy

what they like, instead of the right property for a short-term rental. They

should consider why someone would come to a short-term rental in that area and find a

property that appeals to that.

5. Part-Time Manager – Regardless of how handy the owner is, owning a

vacation rental is a full-time job and should be managed by a professional

management company.

Renters of short-term rentals are choosing the privacy and intimacy that a

short-term rental offers, but they expect to have hotel-quality service. This is a high bar

and before buying a home to use as a short-term rental, investors need to carefully

consider all the aspects of this kind of ownership.