Recently I purchased a rental home and after posting was contacted by Loftium. From what I could research Loftium is a start up that states it will help with a down payment on a house in exchange for the new home owner guaranteeing Loftium the opportunity to Airbnb a bedroom of yours out for one to three years. If it rents they collect a majority of the airbnb income and if not it is a loss to them. I'm interested in getting input as to how this could affect a niche market and legalities of the situation in various states. Also I'm a little perplexed as I have already purchased the home.
Thank you BP members in advance for your input.
Hey Sean! I'm the CEO of Loftium - great to meet you. To help clarify, Loftium has both our down payment program available in Washington state, and our Loftium Lease program where we offer landlords above-market rent and place long-term tenants who manage Airbnb guests in part of your rental property. Loftium signs a lease directly with you so you get higher rent payments guaranteed every month without the work of managing an Airbnb.
Would love to get your feedback or help answer any other questions.
Thank you so much @Yifan Zhang for contacting me. I was trying to find out information about your company after my wife notified me we were contacted. I would love to learn more about this process, such as do these homes need to be primary residences, vacation homes, strict rental properties. How do you gauge how much you are willing to sign for a lease. For instance do you pay the entirety of the rental price and after rely on your marketing to fill the space with short term rentals? Thank you in advance. I think this is a great idea and just want to learn as much as I can. Also do you have minimum and maximum rental/airbnb stays?
Good questions! To answer your questions:
- We have an algorithm so we can run addresses and offer a certain amount above your listed rent every month, guaranteed.
- We have a waitlist of long-term tenants who want to rent with us and get guaranteed discounted rent for managing the Airbnb.
- We can work with any type of property for the Loftium Lease, and we always combine a long-term tenant with Airbnb guests so there's always an onsite host.
- We allow you to set rules as the landlord - you tell us if you're open to pets, have house rules, etc.
Thank you for taking the time to answer my questions. I have a few more questions
Do you have any specifics on a landlords right to entry for specified inspections? For example I have inspections of my properties but I also wouldn't want to interfere with any Airbnb guests.
Is there any type of insurance backing?
As a landlord I know I am responsible for when plumbing goes or replacing a large item such as a stove. If something were to happen to an appliance would I be penalized for the day or two it takes to replace them?
How long are your contracts? I think I read one to three years but wasn't sure if this was specific to the Washington down payment program.
Thank you again. I don't mean to bombard you with questions I am only trying to learn in the event that I would offer up one of my homes to your company.
@Sean Monahan You can still inspect your properties as normal - you'll just give your standard notice and communicate that to Airbnb guests.
Loftium requires long-term tenants to hold renters insurance, and Airbnb provides $1M of damage protection and a separate $1M primary liability insurance for every booking.
Most repairs don't get in the way of Airbnb hosting - i.e. if the stove is out, that can be communicated to guests - and as long as repairs are made on a timely basis, there's no penalty.
We sign a standard 1-year lease for the first year, and can sign a longer lease after that if both sides are happy with the process.
Feel free to check out my profile and the Loftium company profile on BiggerPockets for our website with more info. I tried to post it here but I don't think it's allowed in messages.
Thank you so much!
Loftium is interested in renting out my property in Portland, Oregon. So far they have been easy to work with, are offering competitive rent, and the sample lease they shared looks reasonable (I am not an attorney).
Where I am stuck is in finding insurance coverage for a situation where the tenant plans to have short-term sub-tenants. USAA, who I have umbrella coverage with and love working with, said they may be able to put something like this through their underwriting once I am up for renewal in March but I don't want to wait to fill the property or go without coverage in the meantime. I tried Proper Insurance, as they seem to have some specialty in short term coverage, but they will not write a policy that includes shared spaces between the tenant and the short term sub-tenants.
Anyone have a suggestion on how to get insurance coverage for this scenario? Thanks in advance.
Can the on-site host be the actual owner, rather than a long-time tenant?
@Ruth Bayang I came across this post while researching Loftium and thought I might chime in on your question. For the scenario of the on-site host being the owner, I'd say that you're better off finding a short-term rental management company to co-host the property with you. I'm sure some other local investors could help find someone in your area if you're not able to find any. I'm pretty sure that Zeona McIntyre (BP Podcast ep. 229, https://www.zeonamcintyre.com/) will manage properties regardless of location. Good luck!
@Peter Cornell, did you ever determine what to do about the insurance or were you able to get USAA to underwrite? We have been contacted by Loftium as well and we too have USAA both for the houses and our Umbrella.
How does Loftium comply with Seattle short term rental laws? I am a landlord that is interested in signing however it looks like Seattle rental law requires home owners to operate airbnb and restrict it to 2 units with one being as primary. Does it allow tenant who sublease to operate airbnb? Thanks.
I am also curious about this as I have an inquiry for one of our rentals. Will explore and see what the outcome is.
I’m in Tampa Florida.
Please PM info, thanks.