Simpsonville, SC · Member since 2017 · 4 posts · 1 vote
Everyone,
Does anyone have experience renting houses on yearly leases and then turning around and using them as an AirBNB? I know that you would have to get the owners consent written into the lease and you would have to secure short term rental insurance. My other question is would the landlord have to acquire the insurance since the titled property is not in your name or can you still obtain short term rental insurance if you do not own the property. Any insight would be greatly appreciated to see if this strategy is a viable option. Thanks!
As long as you understand that you are going into partnership with your landlord and he is receiving compensation above the standard rent then anything can be worked out. If you believe you can do it without directly involving th elandlord with financial compensation better hope you find a real dumb landlord.
Rental Property Investor · Jersey City, NJ · Member since 2011 · 1k+ posts · 876 votes
7y
How much over market will you pay the landlord? I had a couple of guys come and look at one of my apartments, they didn't disclose this was what they were up to beforehand. And they didn't even offer a rent premium, though I still would have said no. I don't like this business plan, you go into business with low capital, take all the upside and leave the landlord with all the downside of pissing off neighbors and high wear and tear. I dont know about NC but in NJ I cannot take more than 1.5 mo security total, so I cannot protect myself. And assuming you're an LLC or such, you can walk away leaving me holding the bag if it really gets bad.
Investor · Fort Collins, CO · Member since 2015 · 56 posts · 30 votes
7y
As an independent insurance agent and active investor I woulnd't recommend this business model regardless of which hat I'm wearing. As an investor I wouldn't allow my property to be sub-leased by people who I haven't run background checks, have zero recourse against, and have the issues mentioned above as well. As an insurance agent the liability is extremely high and I can't imagine finding any policies that would make it financially feasible.
Local municipalities also have regulations regarding short term rentals so that could be another hurdle depending on your city/state/HOA/etc.
To answer your question directly, since you have no insurable interest in the property you wouldn't be able to purchase the necessary landlord insurance policy to cover the property for short term rentals.
Best of luck and I like that you're thinking outside the box
Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
7y
ou could do all the work to turn some one else property into an STR and then they could decide to sell or just take over listing on Airbnb. Better to buy a property and hope they don't change the laws to stop allowing STR's like they have in other areas.
Rental Property Investor · Sacramento, CA · Member since 2011 · 2k+ posts · 1k+ votes
7y
Yes I do exactly what you're asking about. There are many ways to get coverage. If all the obvious ideas don't work, then you simply form a joint venture with your landlord to get coverage.
As long as you understand that you are going into partnership with your landlord and he is receiving compensation above the standard rent then anything can be worked out. If you believe you can do it without directly involving th elandlord with financial compensation better hope you find a real dumb landlord.