2.1 Different Types of Vacation Rentals

Knowing what works as a short-term rental in your area is key to helping an investor succeed. And if it works for them the first time, they will come back again and again to find more properties.

Your research into what is successful and what is less so can make the difference between full occupancy and a delighted owner, and disappointment and no referrals.

Single Family Homes – Villas, Cottages, Houses, Cabins.

  • Popular in traditional vacation destinations and in beach locations homes that can accommodate larger groups are appealing.
  • May be located in gated communities with HOA’s (more likelihood of restrictions)
  • Exposure of sunlight (sunset/sunrise) can play a role in value, and in rentability
  • Best options for multi-generational families
  • Higher maintenance costs due to swimming pools, yards, etc
  • Owners pay insurance policy, not included in HOA
  • Less competition from hotels and resorts
  • Luxury homes are highly desirable
  • Attractive for those who don’t enjoy shared amenities

Town-houses – Terraced House

  • Almost always located in some type of community unless in a city or urban environment
  • Offers more of a single-family vibe but without maintenance
  • Some have additional amenities – private splash pools and yards
  • There is often an HOA involved with townhouses
  • Luxury townhouses offer high-end and more affordable feature
  • Usually a better option for those that can’t afford a single-family home
  • Condos – Apartments, ApartHotels, Flats

Traditional condo communities vs Condo hotel communities

  • There may be fees above & beyond association fees
  • Many offer five-star amenities similar to high-end resort
  • Can face competition from local timeshare & hotels
  • Potential of STR restrictions imposed by condo associations

Everything else

There’s been growth in all types of accommodation since Airbnb began and just about anything that can be classed as overnight accommodation can have rental potential.

This makes vacant land attractive to investors who may have limited funds, so make sure they are aware of restrictions on operating a STR to avoid unpleasant surprises later on.

  • Campers, tents, yurts, treehouses, Airstreams are all listed on Airbnb
  • Tiny houses might be an option in your market.
  • Commercial and multi-family properties are of interest to some investors but this is a specific niche. Plenty of thought needs to go into the development of these types of businesses particularly if there is no on-site management