Staying in a vacation rental while visiting a new place can really enhance the trip! Having a kitchen and laundry facilities can help keep costs and packing to a minimum. Particularly if you have a family or group gathering, the cost is usually less than multiple hotel rooms, and you can enjoy a living room for movies, games and socializing. Often a nice outdoor space is provided for BBQ’s, perhaps even a hot tub or pool! Most areas now have a plethora of choices available on-line.
As a rental property manager and Realtor I’m often asked my opinion of furnishing a house for this purpose. A few years ago I would have said yes it’s worth it, but the popularity of vacation rentals promoted by a recent website has caused a glut on the Boise market. I can find 306 properties on that website today! When I began offering my townhouse as a furnished rental in 2007, it was one of two! The result of supply and demand has driven the price down to the point that I plan to return to using it as a traditional rental. Because rents have gone up quite a bit in the last couple years, and nightly rates have gone down, the potential for higher returns just isn’t worth the amount of extra work involved. At least not for me, in my opinion.
Vacation rentals require a tax permit. Since they compete with hotels the law requires the same taxes to be collected. All rentals require state sales tax (currently 6%) plus the Idaho travel and convention tax of 2%. If you are close to downtown and in the Greater Boise Auditorium district another 5% is required. Collecting and remitting these taxes is the responsibility of the owner and stiff fines are levied for non compliance. Trust me they watch the websites! Stays of more than 31 days are exempt.
Furnishing, decorating, equipping the kitchen with dishes, flatware, appliances, staples; linens and paper supplies for bathrooms and bedrooms; propane for BBQ’s, hot tub maintenance, etc. can be quite expensive initially and ongoing. Constantly booking, collecting, inspecting and returning damage deposits; scheduling cleaning between each booking and maintenance when needed; all take a lot of time! There are management options available that usually take about 20%. Probably worth it for all that work, but again cut into the bottom line. Insurance rates are higher for short term rentals, plus the owner has to pay all the utilities.
Traditional rentals in Boise are in high demand and owning one can be a great way to build wealth! I’m happy to answer any questions about rentals, as well as buying or selling any residential properties in the Boise area. Feel free to call me!
Jan Allen
208-841-4711
jallen@atova.com