In Hensley v. Gadd, 560 S.W.3d 516 (2018), the Kentucky Supreme Court found that use of real estate as a short-term rental through a platform such as Airbnb or VRBO is “commercial” and not “residential” in nature and barred the property owner’s short-term rental business. The case therefore has important implications for real estate professionals of all stripes – including real estate brokers, real estate agents, investors, and property managers – with any short-term rental business in Kentucky.

The conventional wisdom is that real property is a solid investment – after all, they aren’t making any more of it, and it’s often billed as “one of a kind.” Of course, just because the wisdom is conventional doesn’t mean it’s correct. In reality, there are a multitude of considerations that potential real property purchasers should take into account, and a careful review of these will generally result in sounder investment decisions. The condition of any buildings, access to the property and environmental assessments all should be factors in the purchase decision, but there are additional issues from a land use planning perspective that will impact whether an investment in real estate will pay off in the long run.

Investment in real estate, whether residential or commercial, is a great vehicle for building wealth. For many people, however, the most difficult part of building a portfolio of real estate investment is knowing just where to begin. There are more options and moving parts than may be evident at first blush, so new investors might be either hesitant to enter the field or far too brash in diving into an investment without a definitive road map. Both paths are fraught with difficulty and failure.