Considering Buying an Investment Property? Vacation Rental Versus Long Term Rental

  • Wed Aug 21st, 2019 1:30am
  • Life

Submitted by Merri Ann Simonson

Now would be a good time to purchase property held for investment and due to market conditions, a rental home in the San Juans would be the best investment. We are not like the metropolitan areas nearby with multiple offers on most every property and robust appreciation; we remain in a buyer’s market in most categories of property.

Once you have made the decision of the type of investment property to purchase, then how you intend to use that property is the next process; vacation rental or long-term rental. To assist you with this process, I have compared the different aspects of each below.

Vacation Rental General Description

The most successful and thereby most desirable properties include waterfront or view homes, homes with docks, hot tubs, pools and those that offer gaming tables such as a ping pong or a pool table. Flat usable land and having good internet connectivity is a must; your tenants must stay connected while on holiday. Allowing at least small dogs will increase your occupancy numbers.

Buying a home with an existing permit, customer list, website and income history is the most efficient avenue. The permit for a vacation rental runs with the land. It is annually renewed automatically but can be voided by the County should the home not be used as a vacation rental within the last 12 months.

The cost to obtain a vacation rental permit can be up to $2300 plus the consultant that will process the application. The consultant will charge around $600-$1000 subject to complexity.

It is possible to process a vacation rental permit directly with the County but in the long run, it is more beneficial to work with a professional who does them on a regular basis.

The process requires the corners of the lot be well marked, which may require a survey if you are not able to locate them. The application requires a current water test, if on a private well and recent septic inspection. The owner must evidence adequate parking and access roads to allow for fire protection and emergency vehicles. Floor plans are required so a designer may be needed to create those.

The owner or manager must publish rules of conduct for the individual home as well as a telephone list of emergency and contact numbers. The owners must have an on-island person for the tenants to contact at all times. Providing details of operation is advisable, especially for appliances and systems.

Further, many homeowners have developed their own set of rules, such as being respectful of the neighbors, garbage, recycling and water use conservation suggestions. The County does restrict head count based on a maximum of three people per bedroom for occupancy and a total allowed for gatherings. Some homeowners have a pet restriction as well.