Weekly Rental Apartment Building
Does anyone have experience with owning and/or managing small multi-family complexes that allow short term (1 week) rentals? Thanks!
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Around here they're called boarding houses or rooming houses. They can be a good cash flow business if you are willing to provide super-active management.
The up sides:
- Weekly cash payments
- A lot of the time payments and tenants are provided by third parties such as halfway houses and homeless charities. So you're guaranteed to get paid.
- Sometimes you get surprisingly good tenants, like construction workers in town for a few months who are trying to live cheap and save all their money
- Super high cap rates, cheap to buy
- Can be in locations where regular tenants would not want to rent, like above shady bars or in shady parts of town.
The down sides:
- Many tenants have psychiatric and/or substance abuse problems. 3am calls are pretty regular.
- Some cities try to put you out of business by cracking down on code compliance issues and nuisance calls
- Not many people want to deal with the hassle, hence the high cap rates.
- Can be hard to find good management when you want to grow or move on.