As of December 2021, Summit County reported that 21.5% of all housing units are short-term rentals, demonstrating the popularity of this investment opportunity. A number of Park City neighborhoods allow nightly rentals, and it’s important to note that a number also prohibit them, so be sure to verify that it’s an allowed use before acquiring an investment property with short-term rentals as a goal.
The best way to explore this allowed use is by checking the Covenants, Conditions and Restrictions and doing a word search for “nightly rental” or “rental.” If contemplating a property within the City limits, Park City Municipal has a handy map which provides a quick reference tool, just click on any address within the map to see if nightly rental is allowed.
Once you’ve verified that the use is allowed, you should also check to see what type of business license may be required. Within the Park City Municipality, a license is required and there’s code specifically addressing requirements here.
You’ll need to complete this application.
For properties in the Basin, Summit County requires a Nightly Rental License which is contingent upon first passing an inspection with the Park City Fire Department. You can find the Inspection Request Form from the Park City Fire District here, and the application for the Nightly Rental License here.
Once licensing has been handled, the question of how to market and manage your nightly rental property arises. Here are some thoughts and questions to contemplate when evaluating this weighty decision.
DIY NIGHTLY LODGING MANAGEMENT
According to HomeAway, owners spend an average of 8.4 hours per week tending to a property! Assign a reasonable value to an hour of your time and do the math. What is the opportunity cost of dedicating this much of your time to the task?
While on the surface it may seem that doing everything required to maximize income potential yourself is a winning strategy, please ask yourself these questions before making that decision:
Yes, these are loaded questions, but they are also real considerations. If you have taken all these considerations into account and still plan to go it alone, you still might want to strongly consider utilizing one of the two most popular sites for this, airbnb.com or vrbo.com. There are fees to the property owner, however, the benefits far outweigh those fees, in my opinion. Also, the DIY program logify.com offers a nice bundle of options for vacation property owners supported by tutorials and webinars.
I DON’T HAVE THE TIME, WHAT PROPERTY MANAGEMENT COMPANY SHALL I HIRE?
If you have determined that self-managing is not your preference, the good news is there are numerous very qualified, seasoned property management companies in Park City. You will find that there is no straightforward way to do an apples-to-apples comparison on services versus fees. While in today’s market in Park City you can generally expect to receive approximately 60% of gross revenue, with 40% being earned by the property management firm, how you get there varies from company to company. Here are a few pointers to help you evaluate the companies before making your decision.
First, if you are buying from a seller who had had their property professionally managed, talk to them to gauge their satisfaction. The benefit of staying with that company could result in significant repeat business.
Next, if the condominium is in a building with a front desk, unless fees or reviews are horrible, it might behoove you to stay with the onsite management firm. Think about your guests and how they will feel if they call or drop by the front desk to request more towels or amenities and are told they need to call their own property manager. It just doesn’t make for a good guest experience.
I know there is a lot of “meat” in this post, but it is important “meat”! Owning a vacation rental property can be the best of both worlds – the chance to have a vacation property you, your family, and friends can enjoy, along with the opportunity to offset many of your ownership costs by offering nightly rentals. It truly can be a win-win if you rigorously evaluate which approach will best serve you. However, if you don’t do your homework, you might end up quite unhappy and disillusioned. Please feel free to reach out with any questions.