What to look for When buying a Vacation Rental.
Every short-term rental market has unique factors that bring in the masses. Knowing why people are coming to town before buying a vacation rental property is essential. In this case, I'll be focusing on buying here in Nashville.
So why are people coming to Nashville? This isn't a complicated question, but it's important to remember the answer when searching for the best property.
I ain't here for a long time
I'm here for a good time
So bring on the sunshine
To hell with the red wine
Pour me some moonshine
– George Strait
This may be an oversimplification of the questions, and you can dive into countless niches for your specific property, all of which have marot. For example, you could be located on the doorstep of Vanderbilt Hospital. Consider a niche target market for people with loved ones currently in the hospital. However, the vast majority of people who come to Nashville are here to have a good time exploring the honkey tonks on Broadway, eating some BBQ, and listing to the next George Strait at that singer-songwriter night. Even all those corporate retreats and conventions are not picking Nashville because of our cheap but sophisticated large rental spaces without outside distractions. So what are some key factors…
Location, Location, Location: It's probably the most commonly stated fact when deciding to buy real estate, but the fact remains. Location is one of the most important factors when buying a short-term rental. Your property doesn't need to be within walking distance of the bar (bonus points if it is, though). It must be quick and cheap to get to their desired location. Another factor to consider is whether your guest feels safe. There are endless arguments for buying property that will appreciate over the long term, but this is Short Term. If your guests don't feel safe, they won't book, they won't stay, they won't leave a good review, and you won't have money to pay the mortgage. Safety is one of the most commonly asked questions from potential guests!
Bedroom to Bathroom Ratio: Heads in Beds = CASH in the bank (Don't disregard Max Occupancy laws, though). The bigger the property, the higher the nightly rate. The ADRs per bedroom are as follows:
1 Bed = $154 2 Bed= $237 3 Bedroom = $292 4 Bedroom = $427
Make sure you have sufficient bathrooms per bed, though. Sometimes, maxing out the space can translate to lower reviews and long-term worse results. For example, putting 10 people in a 3 bedroom 1 bath (legally allowed) can cause many bachelorettes backup. If you want to avoid the constant "I think the hot water tank is broken" message, remember this.