If you’re an experienced host, you may be thinking about adding to your portfolio. While some take it one property at a time, there are benefits to buying more than one investment property at once. This blog post walks you through how to buy multiple rental properties at once for your short-term rental business.
Host Tools provides an automated, unified calendar for short-term rental hosts, allowing you to seamlessly list on all major channels. Start your free trial today!
The benefits of buying multiple properties at once
Buying more than one rental property at once may sound overwhelming. However, there are some distinct advantages to doing so:
- If you’re buying from the same seller or developer, there could be an opportunity for some discounts. If the seller is looking to offload multiple properties, they may be willing to enter into a special deal.
- More properties means more opportunities to earn money. The sooner you start renting more homes, the sooner you may start filling your wallet.
- Starting the day-to-day operations of more than one property at one time can help you streamline your daily operations from the first day. This way, you don’t have to make adjustments down the road when you start adding more rentals into your portfolio.
- Diversification helps mitigate your risk. Meaning, if one location isn’t performing as well, you still have help from the other property.
Understanding the market and data
Success in short-term rental investments starts with choosing the right markets. Here’s how to identify high-potential markets for multiple property ventures:
- Research Tourism Trends: Look for areas with growing tourism or business travel markets. Cities with strong drawcards, like national parks, theme parks, or cultural hotspots, could be goldmines for short-term rentals.
- Evaluate Occupancy Rates: Use platforms like AirDNA or Mashvisor to analyze historical data for average occupancy rates and income in your target markets.
- Investigate Market Regulations: Some cities have strict regulations for short-term rentals. Research local laws to ensure your investment won’t face unexpected restrictions.
- Stay Ahead of Emerging Trends: Travelers increasingly seek rural, remote, or environmentally conscious rental options. Keep your finger on the pulse of shifting renter preferences to invest strategically.
How to finance multiple properties
Buying more than one home at one day is a big financial commitment. Here are some suggestions and tips to help fund it:
- Portfolio loans are a great option. They allow you to finance multiple homes under the umbrella of a single loan. This can be particularly helpful with interest rates.
- Commercial real estate loans are great options for those with a larger portfolio of properties or who are renting out multifamily complexes. They typically require a higher down payment, but lenders typically focus more on your potential for profit than personal finances.
- If you are having trouble qualifying for traditional financing options, private lenders can quickly provide funds. Of course, these typically come with much higher interest rates.
- Seller financing allows you to pay in installments directly to the seller instead of through a bank.
- Lastly, leverage your equity. If you already own properties, you can use this equity to your advantage.
Legal items to consider
As with any business, there are important legal things to keep in mind. Always be sure that you’re operating in a zone where short-term rentals are allowed. Many popular tourist cities have limited where short-term rentals can operate. Additionally, get up-to-date on your taxes. You’ll need to familiarize yourself with tax deductions. Lastly, check in on the community-specific rental regulations you need to follow. This could be permits or licenses, for example.
How to choose what properties to invest in
Choosing the right properties can make or break your strategy. Let’s look at a few items to consider.
- Location, location, location. Is your home in a popular tourist area? Is it maybe a business center? Or are you a bit more out in the boonies? Consider the year-round demand.
- Consider the layout of the home. How many bedrooms does it have? Are there cool Insta-worthy aesthetics that would attract guests with good photos? Perhaps you’ve got a super cool amenity like an outdoor sauna.
- What is the potential ROI? Consider how much you’re going to be spending and earning, and if it’s worth it.
- Check out the local competition. Does this area have a lot of other short-term rentals? If so, what are they doing well? Or not so well.
How to manage multiple properties at once
Managing multiple rental properties at once comes with its own set of nuances. Here are a few actionable tips for getting yourself in order:
- Host Tools can save you up to 80% of your time, as it can automate many tasks. Automate things like guest communications, cleaning crews, and calendar syncing with our tools.
- Create standardized cleaning, maintenance, and communication protocols. Have a plan in place that you can rinse and repeat every week and between every guest.
- Always pay attention to how your property is performing financially. QuickBooks is an easy and effective way to get started.
- Focus on a quality guest experience. From self-check-ins to cute welcome baskets, always go above and beyond to provide your guests with the 5-star experience they deserve.
As you can see from this post, learning how to manage multiple rental properties at once for your short-term rental business can be a big win. By doing some thoughtful research, securing the right type of financing, and choosing the right property for your goals, you can set yourself up for some serious long-term success.
Host Tools provides an automated, unified calendar for short-term rental hosts, allowing you to seamlessly list on all major channels. Start your free trial today!
