Key Takeaways:
- Turning extra space or a second home into a vacation rental can be financially fruitful.
- You’ll need to have systems or management in place to run the property as a business.
- Renters’ expectations are higher than ever so rental owners need nearby attractions, amenities and high-quality photos to stand out.
Vacation rentals exploded after the pandemic, with U.S. listings increasing 46% from 2020 to 2023. According to short-term rental data provider AirDNA, it’s estimated there are now 1.75 million vacation properties across the country.
Yet many homeowners hoping for financial gains aren’t prepared for the realities of what it takes to run a successful short-term rental today. Owning a vacation home is a business. To be successful, you need certain structures and tools in place, from being able to accept credit cards as payment to paying lodging taxes to getting the home cleaned quickly and completely between guests.
It helps to have realistic expectations. Here are the top things you need to do before renting out a vacation property.
1. Check Local Regulations
The first thing you need to do before turning a property into a vacation rental is look up your local regulations regarding short-term rentals – what many people refer to in shorthand as STRs. “Regulation is the largest challenge short-term rental operators will face,” says Bram Gallagher, an economist with AirDNA who is based in Atlanta.
Many cities, New York City included, have changed their laws…
