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Understanding the Costs of Running a Short-Term Rental in Puerto Rico

Understanding the Costs of Running a Short-Term Rental in Puerto Rico


Puerto Rico's stunning landscapes and vibrant culture make it a sought-after destination for tourists, and consequently, a lucrative market for short-term rental properties. Prospective investors eyeing this opportunity should be well aware of the varied expenses involved in running a vacation rental. Here we aim to outline these costs comprehensively, aiding you in formulating a detailed business plan for your investment.

Key Costs to Consider

1. WiFi and Technology

Providing high-speed WiFi is essential for guests who need to stay connected. The costs vary based on the provider and the plan you choose. Additionally, incorporating smart technology like Smart TVs, smart lighting, and security cameras can enhance guest satisfaction and streamline property management.

2. Taxes

Operating a short-term rental in Puerto Rico involves dealing with:

  • Property Taxes: Generally lower than many U.S. jurisdictions but variable.

  • Tourism Tax: A levy on short-term rentals that must be collected from guests and remitted properly. Proper tax management is crucial for legal compliance and profitability.

3. Insurance

Ensure your property with both property and liability insurance to cover potential damages and accidents. This is not just a legal necessity but a wise business decision to protect your investment.

4. Maintenance

Regular maintenance prevents small issues from becoming expensive problems and includes repairs, painting, and checking structural integrity.

5. Lawn Care and Pool/Hot Tub Maintenance

Regular maintenance of lawns, gardens, pools, and hot tubs is essential for keeping these amenities in top condition, enhancing guest experience, and ensuring safety.

6. Household Supplies

Stocking the rental with necessary supplies such as toiletries, cleaning products, and basic kitchen essentials is expected by guests and needs regular replenishment.

7. Refunds

A clear cancellation policy is important to manage refunds effectively. Although unpleasant, handling refunds with good communication can mitigate the negative impact on your business.

8. Utilities

Consider the costs of water, electricity, and gas, which are essential for the daily operations of your rental. These costs are generally higher in Puerto Rico and should be factored into your pricing strategy.

9. Trash Removal

In some areas, you may need to hire a private service for trash removal if municipal services are not available, adding to the operating expenses.

10. Furniture Replacement

Invest in durable, high-quality furniture to avoid frequent replacements. Quality furnishings contribute significantly to the rental’s appeal and guest satisfaction.

11. Property Management

If you're not local or prefer not to manage daily operations, hiring a property manager is advisable. They may handle everything from bookings to maintenance and guest relations.

12. Reservation Processing

Deciding whether to use platforms like Airbnb or VRBO or your own website affects your operational costs. Platform fees vary but offer valuable exposure and ease of booking management.

13. Pest Control

Regular extermination services are crucial to avoid pests like insects and rodents, which can severely affect guest experience and your property’s reputation. Scheduled pest control not only keeps the property safe but also reassures guests about hygiene and cleanliness standards.

Investing in a short-term rental in Puerto Rico can be highly rewarding if handled correctly. Understanding and budgeting for the above costs will equip you to set up a profitable and efficient rental business. Meticulous planning and proactive management are key to leveraging the full potential of your investment in this vibrant market.

If you think we have missed any costs in running a short-term rental, please let us know in the comment section below.

If you are in the market to buy a property that would be ideal for generating Short Term Rental income, at Paraiso Realty we have a number of suitable listings. Below are three options that served as rentals in the past. Click on an image to find out the details of the property. Or you can click here to see all of our current listings.

Vista Lina, Vieques

Casa Vieques, Vieques

Pilcan House, Vieques