Momentum - Business to Business Online Magazine MOMENTUM January 2020 | Page 14

INDUSTRY SPOTLIGHT - REAL ESTATE
MICHELLE HATMAKER, ePro, ALHMS, TRLP
Broker/Owner
Real Living The Hatmaker Group | Beach Time Vacation Rentals
[phone] | www.HatmakerGroup.com
Does a SHORT TERM RENTAL
(STR) Fit In Your Financial Plan?
S
o, the short-term rental bug has bitten you and
visions of a beachside getaway or maybe a
quaint cabin hideaway in the Hill Country are
dancing in your head? What may really appeal
to you is the idea of having someone else help
pay for your vacation “happy place.” Not surprisingly, the
demand for STR has grown increasingly popular around
the world. With an estimated projected revenue in 2019
of over $57 Billion (yes, billion with a capital B) and over
297 million users worldwide the industry anticipates a
growth rate of 7%+ over the next year...a much greater
return than your average savings account and an asset
you can personally enjoy, if you so choose.
The U.S. accounts for 20% of all vacation rental
properties. The Galveston Bay area is one of Texas’ most
popular destinations for travelers and offers hundreds of
vacation rentals to those seeking the coastal experience.
Local hosts from Kemah to Galveston offer visitors
comfortable homes, condos, and beachside cottages of
all sizes and price ranges.
Due to the increase in
popularity of vacation
rentals, communities find
themselves dealing with
a fast-growing industry and
the need to address potential
issues posed by these types
of properties. Legislation
and ordinances are being
implemented at all levels in
an effort to respect property
owners on both sides of the
fence...landlords and the
surrounding neighbors. So,
what’s a community to do?
STR’s can generate additional
tax revenue for tourism in
the form of the local Hotel
Occupancy Tax, can increase
local small business with ancillary services provided to
landlords such as laundry, cleaning services, pest control,
etc., and can increase traffic to local attractions. Yet, HOA
restrictions often prevent homeowners from renting for
less than 6 months. Texas has always been strong on
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local property rights, so the future of STR’s will definitely
be an interesting topic to follow.
If you’ve already decided purchasing a vacation rental
is in your financial plan, where do you start? What are the
pros and cons of ownership? Do you manage your own
property, or hire a professional experienced in vacation
rentals? Do you purchase as an individual, LLC, or let
your self-directed IRA own the property? How do you
market? What Online Travel Agent (OTA) do you use?
Who do you hire to clean the property? (Hint: It’s not
your typical housekeeper.). Today, guests are looking
for more than just a place to “lay their head.” First and
foremost, guests demand CLEAN properties with five-
star ratings, the best beds and pillows, fully stocked
kitchens (Keurigs, please!), and locations that offer a great
experience. Think like a guest. What would you want if
you were staying at a vacation rental? Resources abound
online and with local management companies. Research,
research, research!
How do you
report and pay
the HOT taxes?
Information in
adhering to local
laws is key. Finding the
perfect property to own as
a vacation rental is just the
beginning of an amazing
journey. The personal
enjoyment and financial
potential are only part of
the positive aspects of STR
ownership. As an owner
and professional vacation
rental manager, I’ve had
the opportunity to meet
wonderful guests from all
over the world, made new
friends, assisted in creating family vacation memories,
and even helped pull off a surprise marriage proposal!
If the combination of hospitality and real estate appeal
to you, vacation rental ownership may be the perfect
combination for personal AND financial fulfillment. It has
been for me!