I have a friend who is interested in buying an inexpensive property in a different state to list as STR on Airbnb, VRBO etc. He asked my advice and I started making a list of things I learned or would ask from my own remote hosting experience. Thought it might be valuable to share and definitely want the perspective of others who have done this. I can only speak to my experience as a US citizen in the contiguous USA, but we are such an international community I would love to hear from those who have purchased property abroad too. So chime in!
Things to consider:
1. My number one item in considering if I am purchasing a place remotely is: can I find reliable cleaning? Do you know someone in the area who is a good, deep, affordable, reliable cleaner if you can't do it yourself? Many services will do basic dusting and vacuuming, but won't do COVID protocol, fridges, ovens, laundry etc except for an extra fee. Find out how many people your cleaning crew needs for a reasonable turnover time and be aware of the quality of work. You need to inspect this BEFORE guests call you out in your early reviews. It may sound like putting the cart before the horse but this is super important to me.
2. Distance. Are you okay with not being able to be at your property easily and quickly if there is an emergency? I read an online metric that said any home over 3 hours away decreases the frequency of visits. We are a little controlling about our property, which is only 35 or so minutes from our primary home. We check on it frequently. Other hosts may not be as attached and be more comfortable with leaving the place alone for longer periods. If this is your first hosting experience, you may want to get your feet wet with a closer property out of the gate, and then "expand your empire" to others further afield.
3. Taxes. Buying in different state or countries can have serious tax implications/complications. Talk to an accountant before finalizing any purchases.
4. Landscaping. Will you need seasonal or year round outdoor maintenance? Leaf or snow removal? Grass cut? Are there ordinances where you are purchasing that require a certain type or level of maintenance? How much does it cost? Do you have that built into your budget?
5. Loans. If you need a mortgage to purchase, an investment loan has a higher interest rate than a primary residence mortgage loan. If you are more than 50 miles away, you can attempt to get a 2nd home loan but you may have to prove that you occupy the space yourself for a certain period each year (6Mos is standard in the US). Second home loans usually have a lower interest rate than investment but its still not as low as a regular old primary residence mortgage.
6. Weather. Is the weather in your STR location weather that you are used to and know how to deal with? Will snow/hurricane/temperature fluctuations impede your ability to rent? Do you have the proper people on site to prepare your home for these changes? Have you built this into your budget?
7. Size. Many hosts go for big properties which can fit a lot of guests. Certainly that can be profitable. Our own preference is for a modestly size place with a limited guest count as it makes cleaning and maintenance easier. Bigger places can also attract parties and if you aren't ready to clean up after those, chose wisely. Likewise a BIG kitchen will attract lots of amateur chef and cleaning after a messy one can be onerous.
8. Condition. You may be able to get a fixer cheap, but do you want to do the work to rehab it so its safe and attractive for guests? Do you know the right people locally to ensure work is done well if you can't be there to check it out? Do you have the budget for this? Even something simple like painting a remote property can be tricky if you aren't there to see colors in person.
9. Local laws and rules. Are there restrictions on STRs in the location you are looking? Do you need a license? How friendly is the community to this? The neighbors? Can you attend any city council meetings to ask questions about what you are thinking about doing? Do you know an attorney who understands the area?
10. Furnishings. Can you get furniture delivered to your location if you aren't there? Is it safe to leave Amazon packages on the porch? If you have big items that need to be set up or installed, do you have someone reliable who can let them in?
11. Experience in customer service/personality for human interaction. STR is different than landlording. It is all about emotional labor. Are you patient? Are you willing to listen to complaints you don't agree with? Can you spot when someone is being dishonest or difficult and still maintain positive but professional communication and boundaries with that person? Are you willing to let small things (a missing bath mat, unfair feedback) go? Are you willing to give up the control you might have if you are not able to be in the same space with guests? Are you willing and able to do this over and over again?
12. Personal use. Will you want to use this property yourself? How much is it worth to you to take it off the market during your own use time? How does that cut into your margins? How do you feel about strangers using your things and possibly not caring for your space as you would prefer?
And finally LOCATION location location. Will you be able to attract guests to the area with things to do? Is there a lot of competition from other STRs? What is the average nightly price in the market? How often do you expect to be booked in this area?
