HOW TO OWN AND RUN A VACATION RENTAL PROPERTY IN PARK CITY
First things first - I am not a short term vacation rental specialist so PLEASE contact one of the many we have servicing the Park City market to get the full run-down. But… since over 80% of the properties in Park City are second homes, and I’ve owned and operated multiple short term rentals, I do have some good leads on how to get started.
So you want to buy real estate in Park City, rent it out and then use it when it’s not rented? First comes a great idea, then comes the implementation. I usually like to suggest buyers get prequalified for a loan with a local lender here in Park City. These local lenders know the market, they know how long appraisers take, they know which products are warrantable, etc. Out of town lenders who don’t know our complex market sometimes need more time to close, which can hurt your ability to negotiate a good price on the purchase of your vacation home. Second homes and Park City vacation homes often require more down payment than you’d need when buying your primary home and rates can be different, so get started with a great local Park City lender.
Choosing the Property - Next step in owning a Park City vacation rental is making sure the property you choose is in the right location. Certain areas have zoning laws that may prohibit your ability to operate your nightly rental. Using a trusted Park City Realtor is highly recommend as he or she should know the ins and outs of the zoning regulations.
Once you are clear and nightly rentals are allowed, you have to find a location that renters will actually want to show up to and continue to rent year after year. Park City has an incredible bus system that takes you directly to Main Street, Deer Valley, base of Park City Mountain and to the base of the Canyons Village. Being on or near these bus stops is valuable, unless you can walk directly to any of the locations listed above. Location reins supreme when choosing your vacation home as your ability to generate revenue is closely tied to being somewhere people want to visit. Having an up-to-date home or townhome is also really important. Renters often pay top dollar for newer vacation rentals but location will almost always outweigh the finishes and countertops inside a home.
How to Make the Numbers Work - Our Park City market has dozens of good property management companies that will provide either Actual Rental Numbers from previous years, or Rental Pro Formas that give you an estimate of what you can generate if you use their services. They provide these free of cost, and you can enter the estimates into your business plan to see if it makes sense for you. Don’t forget to include costs like Repair and Maintenance, Business License Fees, Marketing Fees, Snow Removal, Local and State Taxes, and anything else unlisted here that a professional management company will help you with.
Next - Buy your Park City Vacation Home. Congrats, you did it!
Rent It - Sites like Airbnb and HomeAway/VRBO have made the Park City vacation rental process very easy. There can be some startup fees such as photography, listing costs, and bringing your home to code to secure your rental permit with the city. But again, a local property manager can help you with that. Ask them if they cover any of these costs as their service to you, and see what else is included in their management. They should be taking inventory of all your personal property which may or may not have come with the home. Know which dates are the prime rental dates and try to resist the temptation of using your home during those dates.
Protect Yourself - Having a good rental agreement for your guests is important when you are renting to people who will be recreating in snowy, icy areas. Often homes in Park City have hot tubs and making sure your home is safe, up to local building code and you are properly insured is really important. Contact an insurance specialist to make sure you have the right coverage. Airbnb and VRBO sometimes offer personal property insurance, paid by the renters, to protect your belongings. But make sure your property is properly maintained and insured to give you and your guest the best piece of mind.
Enjoy Your Park City Vacation Rental When It’s Not Rented - This is the most important of them all!!!