Leased SFH vs. AirBnB?

Question

We're considering changing our investment strategy. We have a handful of properties in TN and MS, mostly older homes and maintenance is starting to dig into our profits. We also have two newer houses that are fairly trouble free. So, we're thinking of selling the older houses and buying a newer house in Las Vegas (within 5 to 10 miles from Fremont/Strip area). I know nothing about Airbnb's so considering an Airbnb compared to a lease on a SFH. The Airbnb's I've seen are mostly condos and apartments, so can a sfh be an Airbnb? Lease the house would bring in about $2200 per month (minus tax, ins.) and so what would an Airbnb bring in? Can you keep it rented on a regular basis?

Thanks for any advice and knowledge.

Gregory Schwartz · Answer

Does the idea of owning a small hotel excite you? Do you enjoy hosting out-of-town guests in your home? If you are anything like me, the answer is "no." Then I would stick to long-term rent or try out midterm renting.

If you are the "hosting" type then yes converting to a STR can be a great idea. Keep in mind STR are a job, a side hustle, they are work. So if you're looking to increase passive cashflow you're probably looking in the wrong place.

Bob Beach · Answer

I believe Stephen pointed me in the right direction. I didn't know why I would need a license and for what. A bit of research and finding the LV .gov page and I see all the rules. And I don't fit into any of the requirements.

Gregory, you're right. I don't want to own a hotel. I pictured a management company that handled rent collection, cleaning service, etc.. I think, for now, I will focus on a long-term lease if this idea turns into reality.  Here's a bit from the Las Vegas website on short term rentals. Thanks for the responses:

A short-term residential rental is a unit such as a house or condominium that is rented out to guests for less than 31 days in a row. To operate in the city of Las Vegas, this requires a business license. To be eligible for a license, the home must:

• Be ‘owner-occupied’ throughout the rental period. This means the homeowner must reside on site during the guests’ entire stay. You would need to make this clear to your potential guests when you advertise the rental.

• Have no more than three bedrooms at the property, which would include the homeowner’s bedroom.

• Be located at least 660 feet from any other short-term residential rental, as well as 2,500 feet from a resort hotel.

• Be in a zoning area that allows short-term residential rentals.

• Have written permission from your Homeowners Association (HOA), if applicable.

Stephen DeThample · Answer

Read up on Las Vegas Short term rental rules. Not impossible, but not likely to get a license. I would focus on a midterm rental. If you have specific questions, let me know.

Good luck 🍀