If you're considering purchasing a property to use for short-term rentals, like on Airbnb, there are a few things you should keep in mind to set realistic expectations. Here are four tips to help you navigate the process:
Tip #1: Understand the Financing Rules
If you're planning to finance the purchase of your property, be aware that condos that allow for short-term rentals may have different financing rules and may not qualify for traditional conventional loans. It's important to speak with a lender before you start looking at properties and to have a clear understanding of the financing options available to you.
Tip #2: Know about Condo-Hotels
Condo-hotels, also known as "condotels," are a great option for short-term rentals because the buildings are designed and operated specifically for this purpose. However, these types of properties are very difficult to finance and most buyers end up purchasing in cash. Additionally, there may be specific rules in place if you want to self-manage your unit instead of using the hotel's management program.
Tip #3: Know about New Construction
Many new developers are now building condos that allow short-term rentals as part of the amenities of the building. Buying pre-construction can be a good option, as it allows you to get in early at developer "early-bird" pricing and to pick exactly which unit and floor you want.
Tip #4: Be aware of Zoning Restrictions
In many areas, zoning laws may not be favorable for short-term rentals. Be sure to check the zoning laws in the area where you're considering buying a property and be aware of any restrictions that may be in place. Some condos and homeowners associations may also have their own restrictions on how you can rent out your property.
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Joseph James Biscaha P.A is a Licensed Florida Real Estate Salesperson with Compass