You have been coming up to Stowe, Waterbury or Morristown for years for recreation and now you are thinking about buying a vacation home in the area, and renting it out for a profit?
This could be a fantastic idea, a great source of income, and give you one more reason to visit Vermont on a regular basis! More than likely at some point in this process you’re going to asking yourself…
What Do I Need to Know Before Buying a Vermont vacation rental?
1. Work With a Realtor Who Knows the State and Local laws.
Rules and regulations that govern the short-term rental market can vary widely depending on where you are. Is the property is part of an association? The by-laws may restrict your ability to rent the home on a short-term basis even though the town and state law state otherwise. Can the system handle the extra volume and is it still in compliance with the wastewater permit? Most homes will be on a private septic system.
Is the Price Too Good to be True?
When you are online looking at properties it may be confusing to why the prices for similar-sized homes vary so much within a small geographic area. The reason for this could be due to things like proximity to the main road, major defects, age, HOA fees. Remember, there is always a reason why a property is listed at a particular price. Looking at a home online can be like online dating, everyone looks great until you meet for lunch!
3. Get to Know the Potential Property & Property Manager Options.
There’s a lot that you can learn from talking to a neighbor, current renters or service providers, and a good realtor will do this work for you. You’ll want to know how well has the house been taken care of-has the owner been proactive or reactionary towards maintenance, what are the aggregate costs of plowing, lawn, trash, etc, if the HOA or condo rules allow for short term rentals, how do neighboring property owners feel about short term rentals if there’s been any talk about the building not allowing short term rentals if there’s any deferred maintenance on the building, and more.
4. Account for Vermont 9% Meals and Room Tax When Estimating Potential Income.
The tax department will assign short-term rental hosts meals and rooms tax number. You are personally responsible for collecting and remitting the 9% meals and rooms tax to the Department of Taxes. One exception to you collecting and remitting the tax is if Airbnb or other platform is doing so on your behalf. Hosts must comply with general health and safety standards and register with the Department of Taxes. If you rent your room or other types of lodging to the same person for thirty (30) or more consecutive days, the person is then considered to be a permanent resident, and different rules apply.
Want to Know More?
Whether you are new to investment properties or have experience with short term rentals Vermont operates differently than most other states. Getting help from an industry expert is the best way to go to make sure you make the most informed choice.
