Rental Property Investor · San Diego, CA · Member since 2017 · 66 posts · 66 votes
Hi bp community - I'm interested in your opinion on why you would or would NOT short-term rental your property. I talk to property owners almost everyday and while some are completely for the STR model because it brings in more cashflow, others are against it because of a "horror" story they've heard from a friend of a friend. If your property could generate more cashflow as an STR and there are no restrictions in your area (HOA, county etc...), is there anything else that would be holding you back?
Rental Property Investor · Member since 2019 · 41 posts · 53 votes
7y
Even if there were no HOA or local restrictions, I think it depends a lot on your personality. Operating a short term rental is much more like being in the hospitality industry than in real estate. Your short term guests expect more than your long term tenants, and your business can thrive or die based on reviews.
The constant turnover and the rush to get everything ready for the next group can also be exhausting. Some people love it; others prefer the stability of a long term lease.
I would never have a STR in a residential community. Home owners have the right to not have to put up with a hotel next door. If it started up in my community I would campaign to have them banned.
Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
7y
We are in the process of removing and airbnb that is in our neighborhood. The neighbors are highly upset about randon people coming ang going.
I have a VRBO/airbnb on the lake and it is in a more rural setting and no one complains about it. Several of my neighbors also have their lakehouse on VRBO since you can't be there all the time, may as well make some money on it when not in use.
Rental Property Investor · San Diego, CA · Member since 2017 · 66 posts · 66 votes
7y
@Thomas S. I'm curious to know if you've ever had a bad experience with an STR or if that's just where you stand on the subject? I haven't had any issue on the 19 that I'm currently running and we screen very well to make sure we get the right tenants. Thanks for your input!
Rental Property Investor · San Diego, CA · Member since 2017 · 66 posts · 66 votes
7y
@John Underwood Hey John - I agree, why not make some money on the property while you're not personally using it. We've noticed that the neighbors of our AirBnB's get along pretty well with our guests because they've all been respectful and are excited to visit the areas we run the STRs in. We also inform them before we get the property live of what our plan is and give them our contact info if they need to reach out. I believe that helps and takes away a lot of the concern because now they have a relationship and some trust with us.
Rental Property Investor · Member since 2019 · 41 posts · 53 votes
7y
Even if there were no HOA or local restrictions, I think it depends a lot on your personality. Operating a short term rental is much more like being in the hospitality industry than in real estate. Your short term guests expect more than your long term tenants, and your business can thrive or die based on reviews.
The constant turnover and the rush to get everything ready for the next group can also be exhausting. Some people love it; others prefer the stability of a long term lease.
Rental Property Investor · Salt Lake City, UT · Member since 2018 · 50 posts · 51 votes
7y
@Tom Donnelly I agree with you and agree that it is wise to look at restrictions. County, city, neighborhood, HOA and having an idea of your neighbors are generally all of the checks you'd need to make sure work for your strategy. In my experience short term guests are nicer to neighbors, keep the place cleaner and overall are awesome. Then again I don't have experience with "party properties" or "wedding properties" which I could see generating more noise and complaints.
I've run an STR for three years without a single complaint from the neighbors. Instead, they've actually wanted to rent it for their relatives when they come to town. I agree that they do tend to take better care of the house and are respectful of the neighbors. You have to rely on the numbers. If you can get more money with the STR (I did) then I can't see a reason not to in my experience.
It's where I stand on the subject. Motels do not belong in residential neighbourhoods. It does not matter how many investors have good experiences. Not in my community.
Rental Property Investor · San Diego, CA · Member since 2017 · 66 posts · 66 votes
7y
@Rachel Jacobson You are 100% correct. If you have a team in place that can provide an incredible experience and accommodation to blow your guests away, you're on the path to something great. Thanks for your input ;)
Rental Property Investor · San Diego, CA · Member since 2017 · 66 posts · 66 votes
7y
@Lauren Havens We're in the same shoes as you. We keep clear from the partyers and make sure we get people that the neighbors are going to enjoy. It's a job in itself to keep up with local jurisdiction in all of the places that we operate but it's a must and we will continue the good fight!
Rental Property Investor · San Diego, CA · Member since 2017 · 66 posts · 66 votes
7y
@Grant Rothenburger management is a big factor. Getting a property to STR is only one piece of the puzzle. We have a full team to take care of management to keep everyone happy and provide an incredible guest experience.
@Account Closed it's great speaking with investors that are on the same page : )
Hanford, CA · Member since 2013 · 5k+ posts · 1k+ votes
7y
@Tom Donnelly We have 4 airbnbs and it's the best thing that has ever happened to us. It's also an incredible amount of work. It's all about your goals. We use our current portfolio and it allows us to maximize how much each unit brings in. This way if something happens we are insulated as we would just turn it into a regular rental. Our airbnbs are cashflow and heaven and the reasons I have truly been able to propel myself. So.yes there awesome.
That being said they are 100% a business and not fo everyone. I have personally learned a long time ago that Real estate is not for everyone so I ignore the naysayers. I will say times do change. When we bought in 2011 everyone said we were crazy and now.... lol :)
The question is it good for YOU? Does your area work for you?
Property Manager · Eclectic, AL · Member since 2017 · 38 posts · 18 votes
7y
@John Underwood I’m a vacation rental manager on the lake here! 👋 and yes they do tend to be in more rural areas and more acceptable (in some neighborhoods). I do have a few STRs in a town close by that is more residential though. And I think it just depends on the neighbors really. Our neighbors in town don’t seem to be bothered at all. I think mostly because of who the “strangers” seem to be. The town and neighborhood frequently hold family type events, baseball games, conventions, etc. so the renters tend to be more of the family type folks, rather than bachelor parties or something bothersome.
But OP I am in a market that varies widely for STR but most places here aren't restricted....yet. I fear that they will be soon but until then I'm trying to do all I can to screen guests and set expectations with the guests before the commit, and I involve the neighbors. If they are aware of the situation and feel included in some choices of the neighborhood they seem to be less likely to be angry. Maybe because they feel more "in the loop" and aren't left wondering about strangers in and out.
Real Estate Agent · Souderton, PA · Member since 2016 · 591 posts · 414 votes
7y
Great discussion so far. I'm curious to know what kind or areas you are all talking about for these STR. I live about 50 minutes from Philadelphia, which in my opinion is the closest STR market I can think of. Am I wrong? Do people book short term rental outside of tourist areas? I'd like to venture into the space, albeit slowly, and try a unit or 2 to see how it goes. Like I said, the type of areas that are good, at least in my naive opinion, are where people are visiting, near attractions, or some sort of vacation destination. I've searched the areas near me, and outside of Philadelphia for other STR and while there are a few listings, when I try to schedule a stay, it appears to me their calendars are empty, leading me to believe they have a lot of vacancy. Any insight would be great.
Property Manager · Ridley, PA · Member since 2017 · 427 posts · 449 votes
7y
@Thomas S. Ironically, your opinion about a STR in your community is kind of the same opinion some homeowners have about having a long term rental in their community. Do you own rental properties?
Rental Property Investor · Charlotte, NC · Member since 2017 · 9 posts · 3 votes
7y
I would like to know if those of you who do have Air BnB properties, are those places in a residential area or in more of a recreational/vacation type spot? I have a SFH that I am working on that I am considering STR for. I just wonder if the STR model is still valid if a home isn't in a vacation destination type area. I am in a major metro.
@Grant Rothenburger management is a big factor. Getting a property to STR is only one piece of the puzzle. We have a full team to take care of management to keep everyone happy and provide an incredible guest experience.
@Account Closed it's great speaking with investors that are on the same page : )
My horror story with AirBnB.
In this case someone set up my vacant property as an AirBnB. How in the world did they do that? The story is at the link below. This happened 1 day ago.
Realities of Investing - Case Study - What Works, What Doesn't
Investor · Nashville, TN · Member since 2016 · 127 posts · 71 votes
7y
@Tom Donnelly this is a great discussion (and a hot topic). I second what @Rachel Jacobson said about factoring in your personality. There are definitely ways to do it both hands on and hands off (one of mine I manage myself, the other one I have I have a manager for). But she is 100% right about it being more on the side of the hospitality industry than strictly real estate.
I think it also just largely depends on what city (or type of city) you live in and where it is located within that city. What kind of travel patterns are there? What KIND of travelers are they? Here in Nashville, as long as it's zoned correctly, permitted correctly, the HOA allows it (if there is one), and its within 5 miles of the downtown, its kind of no brainer (in my mind). But if you're in Ft Wayne Indiana may not be as much of a no brainer? (Nothing against Ft Wayne, haha). Also, like some people have eluded to you also have to take into consideration if it would be a marketable and enjoyable experience for the guests and the neighborhood residents. If its smack in the middle of a residential area it might not be. However, both of mine are and I've not had any problems with neighbor complaints.
I think NOT doing it because you've heard of "horror stories" isn't reason enough to not do it if you have a genuine interest in it. But then again, the "horror stories" will probably scare off the people don't have genuine interest. Haha. But statistically the rate of "horror stories" to non-horror stories is very small.
Rental Property Investor · San Diego, CA · Member since 2017 · 66 posts · 66 votes
7y
@Adonna Pruette Most of my STRs are in destination areas. I do have one that I'm going to sign on for the summer that's north of Austin and in a residential neighborhood. We use Airdna to run an analysis which tells us what our projected revenue is, ADR and Occupancy. We're very conservative with each analysis and run them at a lower than market occupancy rate which paints a good picture of what the year will look like for that property. There are area's that you wouldn't consider to be a big STR area but once you pull the analysis it shows otherwise. This can be do to a few factors (corporate rentals, rapid population growth etc...) and a lot of properties work as an STR because of those reasons.
Rental Property Investor · San Diego, CA · Member since 2017 · 66 posts · 66 votes
7y
@Tim Bergstrom Great points. I agree, a "horror" story shouldn't hold you back from pursuing an STR. If you're interested in making the extra cashflow but don't want to deal with the headache, companies will manage it for you. This is the reason I started mine because there's a big market of interested investors who don't want the headache of the STR process.
Specialist · Grand Rapids, MI · Member since 2016 · 1k+ posts · 611 votes
7y
@Tom Donnelly I am all for the short term
rental model as long as you understand its limitations. People think short term
rentals are easier to get started than long term
but in reality while its twice the net income
its 3-4 times the work especially to get the right model in place. We have had every issue imaginable including cease and desists and multiple altercations where police were called on tenants but we just assume a higher capex
and work with what we can to minimize the risks. I'd recommend getting as much education on short term rentals as you would long term rentals and then make a decision. Here are a few things our clients make mistakes on that we consult:
1)Assume little or no CAPEX
2)Oversell their properties so they disappoint the guests
3)Don't integrate all booking platforms
4)Don't use booking platforms properly to
determine demand
5)Willingness to trial and error when they would never do that with long term rental. Preplanning is even more necessary.