Before you begin investing in short-term rental properties in Park City, Utah, there are a few things you should consider, such as the supply and demand, city regulations, and the long-term management of these properties.
Consider Potential Investment Properties VS. Current Vacation Rentals
Park City has become internationally known as the ideal place for winter sporting events as well as high-profile events like the Sundance Film Festival. Due to the popularity of the area and the high volume of visitors, rental properties can be a great investment. However, before you jump in and look for the right properties to invest in, you should consider a few things.
The right location is key to attracting short-term renters. No matter how beautiful your vacation rental is, if it is in a bad location, you will have low traffic.
Look at the location of your potential rental and research the rental prices offered by surrounding rental properties. Compare rental pricing in the area you’re considering purchasing a rental property. What are hotels charging? What are Airbnb rentals charging? Are you able to rent your potential investment out at a competitive rate while still making a profit?
Research Park City Rental Regulations
Park City Rental Requirements – To maintain a rental property in Park City, you will need to obtain a business license. You will also need to have a yearly review of the property to make sure it is a safe environment, which will include the checking of safety measures like smoke alarms and CO2 detectors.
HOA Considerations – Some Park City HOAs have strict rules on how the properties can and cannot be used. Do a thorough investigation of any property which has an HOA to ensure your vacation rental property can be compliant with their regulations.
Once these considerations are taken care of, you may want to consider a 1031 exchange opportunity with the current owner of the property. As long as the real estate in question is not a primary residence, you may be able to pick up your new investment with few to no taxes being applied if you swap one of your investment properties with the current owner of the investment property you are interested in acquiring.
Commit To Managing Your Rental Properties
Beyond the initial investment, your vacation rental properties will need to be properly managed. Some options to consider:
- Take many high-resolution pictures of your properties and their various amenities, so potential guests can have a clear picture of what they will be renting.
- Have a cleaning crew to care for your property post-rental.
- Invest in resettable door locks with codes you can generate for a specific renter. This step will prevent you from needing to have a property manager let them in.
- Furnish the property with attractive furnishings which can withstand a continual rotation of guests.
You can also work with a vacation rental management company and allow them to take care of many of the day-to-day upkeep of your rental properties.
If you have more questions about real estate in Park City, contact Jensen and Company.