What to Look for in a Short-Term Rental in Vermont

Did you know that tourism is one of Vermont’s largest industries? We see over 13 million visitors per year, which amounts to about $3 billion dollars spent annually on things like lodging, food, and goods and services. 

That’s a lot of people visiting Vermont and they all need a place to stay. If you’ve been thinking about investing in a short-term rental, Vermont is a great place to put your money to work. 

There’s a lot to think about when looking for a short-term rental. 

First, it’s all about location. The location of the property is one of the most important factors to consider when investing in a short-term rental. You want to choose a location that is popular with tourists and has a high demand for short-term rentals. Some factors to consider include the proximity to tourist attractions, the availability of amenities, and the weather. Another important thing to note is whether the town or city has any regulations about short-term rentals. A good real estate agent will know about any restrictions and where to point you to find more information. 

Second, the type of property you choose will also affect your success as a short-term rental investor. Some popular types of properties for short-term rentals include condos, apartments, houses, and cabins. In Vermont, lake houses and ski condos do very well. You'll need to decide what type of property is right for you based on your budget, your target market, and your personal preferences.

Third, make sure you research typical occupancy rates and average daily rates which go hand in hand. Occupancy rate is the percentage of time the property is rented out. A high occupancy rate is essential for profitability in the short-term rental market. You can estimate the occupancy rate for a property by considering the demand for short-term rentals in the area, the competition, and the price of the property.

In addition to occupancy rate, you’ll also have to look at average daily rate (ADR). The ADR is the average amount of money you charge per night for the property. The ADR will vary depending on the location, the property type, and the time of year. You can estimate the ADR for a property by considering the average ADR for similar properties in the area. You can use popular short-term rental sites to research prices in the area you’re interested in. 

And fourth, it’s important to calculate your expenses from the start. There are a number of expenses associated with owning a short-term rental, including property management fees, cleaning fees, utilities, and taxes. You'll need to factor these expenses into your analysis to determine if the property is profitable.

If you spend a lot of time in Vermont already visiting family or vacationing, purchasing a property that you could use part of the time and rent out on a short- or medium-term basis could be a great option. 

If you’re curious about where to start, what types of properties rent the best, or which areas are most popular with tourists, I’m always happy to answer questions!