Here are a few things to consider when looking at vacation homes:
Know all the rules: Not all homes can be used as rental property here in Southern Utah. Homeowner or condo associations may set rules for rentals, as do most cities. Some resorts may require you to use their programs, which set standards for interior furnishings and amenities, but the property handles the logistics for a percentage of the rent. If you plan to rent out your property, it is especially important to research all these rules before you buy. Lance Clifford & Associates can help you make an informed decision.
Calculate ALL of your costs: The actual purchase price is only part of what you will need to spend. You will also have to pay utilities, HOA or condo fees, property taxes, insurance and the cost of furnishing a new home down to the spoons and forks. Don't forget taxes on your rental income as well!
Be realistic: Renting out a vacation home comes with expenses. You will need to pay for cleaning between tenants, advertising and perhaps property management. If you're part of a resort rental program, it will take a percentage.
Have a rental business plan: Will you go into a rental program, hire a management company or do it yourself via services such as Airbnb or VRBO? If you are handling your own advertising, you will need great photos. You also need to be able to take payments from tenants (services like PayPal can work well) and have a way for them to get in (such as a keyless entry system with programable codes). A reliable cleaning service is essential, especially when you may only have a few hours between tenants.
Have a plan for emergencies: If you don't visit the house often, make sure someone does. For example, a water leak can be devastating. If you're renting, repairs need to be made quickly, so get to know a good handyman or property manager.
Calculate your ROI: If you think owning a vacation home should be part of your overall investment strategy, make sure it's a good move. Estimate returns and weigh them against other uses of the same money.
Expect to pay taxes: Rental income is taxable on state and federal returns, though most vacation homeowners won't earn enough after expenses to face a significant tax liability. If you are doing short-term rentals, the state of Utah, Washington county and local municipalities consider you an innkeeper and expect you to collect the same lodging taxes that hotels collect and pay. If you're renting a home, an apartment, a room, you're basically running a mini-hotel. In St. George, for example, a tax of 5.25 percent is due, 4.25 percent to Washington County and 1 percent to the city.
While there is a lot to consider when buying a vacation rental here in Southern Utah, we still feel that it is a great way to enjoy a second home here and help cover some of the costs of ownership. If you would like more information on vacation rentals, give us a call at 435-200-5508 or contact us via email.
Here is a list of several of the areas zoned for vacation rentals. This list is always changing, so please be sure to contact us to verify that a particular property is in a vacation rental approved area.
Below is a list of many of the vacation rentals currently on the market. Please note that there are parts of some subdivisions that do not allow vacation rentals, so please verify with us that the home is vacation rental approved.