Anyone Have Experience With Vacation Rentals Via AirBNB.com or VRBO.com?
Landlord · San Diego, CA · Member since 2012 · 129 posts · 49 votes
I have a triplex property where one of the units is a small one bedroom attached to the main house. I was originally going to lease this unit as a regular rental but instead I'm now thinking of going the www.airbnb.com or www.vrbo.com route and rent it out for a few days or a week to travelers coming to town. Living in a destination city as I do and near downtown makes me think that this might allow me to bring in more rent than I would just as a regular rental. I know it's more work but how much more I've yet to find out. Anyone have experience to share?
We bought a house in NH with the intent to do just this, and have had a lot of success w/the strategy. I love it. We advertise on HomeAway and have no trouble getting rentals year-round. We have a 2-night minimum (I learned early NOT to rent for 1 night) and our rates vary by season, plus length of stay varies by season (minimum of 1 week in the summer, for example). HomeAway is the only site we use; we had VRBO as well for our first year and our experience was that we had a different type of renter that came from there, plus I had more tire-kickers and people looking for something cheap who came from VRBO. The ones who come to me from HA are a more sophisticated renter who are also looking to book with the first owner who gets back to them. They've already comparison-shopped and have it narrowed down.
I can't recommend HomeAway highly enough. They have some helpful blogs on there and paperwork; I got our contracts and invoices from there. Also, get a book by Christine Karpinski, "How to rent vacation properties by owner." I read that before we ever bought our place and have very strictly followed her advice. She is right on. Karpinski also has a blog on the HomeAway site.
And here's our property! http://www.homeaway.com/vacation-rental/p255140 We currently have it rented to a family for the winter season. I need to update our spring and summer rates, as the inquiries into those have started already.
Good luck!
I've done short-term rentals, but not that short-term. I've done monthly, not days.
You could stand to make money off it. But, you also take a chance with damage with each tenant. Airbnb rentals tend to have fully furnished with linens, cable, and everything else. Some of the hosts even socialize with the renters and offer breakfast.
Long-term, I think the time you spend screening, cleaning, accepting requests, have vacant days, meeting tenants for keys, etc. might not be worth it. It's a lot of hassle. You might/will make more per night, but you're spending much more time on it. Plus, there will be plenty of vacant days. Between the hassle and all the vacant days, I doubt it's as profitable as you think.
When I've rented to people for one month stays, that's a bit more of a hassle than I like. It has it's perks, but it's more 'hands on' giving keys, accepting, screening, etc. Plus, the risk. You could easily have someone smoking, bringing pets, throwing parties, etc. in your rental. You could in long-term standard rentals, too, but short-terms seem to be more like "spring break" or party rentals. You'll likely get more occupants with this "hotel" rentals than long-term. People will bring their buddies on vacation and throw a party in your house. Or a family with kids and so on. People leave a mess in short-term stays, so you might want to charge a cleaning fee.
During peak tourist season, if your rentals are vacant anyway, I would rent like this. Not long-term-- too much work. If you have the free time to accept requests, clean, give keys, and all of that-- you might try it for a month or two and see if it's something you want to continue. It does mean more money per night.
Plus, some cities and neighborhoods and insurance companies frown on being like hotels. You could have zoning issues with it.
Do you live in the main house? Or is it rented to someone else? Just thinking that in addition to restocking and cleaning, etc., you may also have to deal with irate tenants in the main house if the short-term unit is loud or obnoxious or they are sick of strangers in and out all the time. There also may be a special tax rate you must collect, report, and pay for a lodging or something rather than a rental unit if it's less than 30 days, so you may need to check that out in your city. Maybe focus on corporate rentals? Companies pay good money to house employees in short-term furnished corporate rentals.
I do not have experience in renting my property on any of these sites (hack, I just bought my FIRST ever investment property less than couple of weeks ago :-) ). But I have used airbnb in the past to consume vacation rental and I can tell you it is EXTREMELY popular with people. AirBnB is one of the faster growing startups and its iPhone app (not sure about android) used to be one of the top and most active apps.
If you live in a tourist destination where demand for tourist rental is high, then I would highly recommend you to try it out. As for VRBO, I have heard about it and "browsed" through it in the past but have no experience. With AirBnB you will find that there is a dedicated and loyal community that only rents from AirBnB.
I live in the main house to which this unit is attached. My thinking is that I don't want to have a tenant in the back full time so using it as a vacation rental would provide the income without having to deal with a tenant right next to me all the time. I can also use it as a guest house I have outfitted the unit with everything necessary to live there - furniture, towels, utensils etc - and it looks really good. Spent about $2,500 getting it dialed in.
I do like the idea of a corporate rental. The house is close to the convention center so I see attendees as one of my target markets. Not sure how to directly tap into that market though...
I would say go for it! You sound like you are in a position to take on the work. I rent through VRBO, HomeAway, Flipkey, and Airbnb. It is a lot of upfront work, and there is some extra hassle and expense but if I told people the return I'm getting they probably wouldn't believe me. People say there is more risk which is true but you still make people sign agreements with very strict rules, take deposits or buy insurance, plus you are there on site so you can keep a better eye out, and the amount you can charge for a fully furnished vacation rental will cover vacancies, and turnover cost are generally low. I find people smart enough to even do the research for vacation rentals are not the same types looking to stay a cheap motels so they do take care of your stuff. There are a lot of things you have to be careful of but they are the same as with a long term rental just on a different scale. Here is a link to mine for reference:
http://www.homeaway.com/vacation-rental/p3465982
BTW. Mine is close to a convention center too and I can give you suggestions for tapping that market.
Hi Nicolo Nisbett:
I'd be happy to hear your suggestions on tapping that market!
John
We have rented through VRBO in many states and cities including CA, NV and FL. plus we've been all over Mexico and use VRBO almost exclusively. The properties are outstanding and the owners have all been terrific. It is surprising how nicely furnished they are and the attention to detail. They have all used professional maid service and charge accordingly. The guests give feedback and we only rent from ones that are highly recommended. A couple bad reviews and you better do something else.
I live/invest in a recreational destination. I often use the units as short term vacation rentals while listing the property. In between tenants the units are very clean and staged perfectly so they show very nice. A couple weekends a month brings in about as much as a long term rental would in our area. The disadvantages is that I don't do showings when there are short term tenants so it can be inconvenient for potential buyers (but I doubt its ever cost me a sale) and its a ton of work. You are basically placing tenants constantly. The key is to develop an easy to manage system but its still a lot of work.
I have only advertised on craigslist and VRBO. Craigslist only lead to spam and solicitations. VRBO is really effective. Over 1/2 of inquiries lead to a booking.
My wife and I have had a lot of success renting our primary residence through AirBnB.com. We have rented it out ~20 times for a on average a few days at a time with absolutely no issues. AirBnB has incredible customer service if there ever is an issue. I would highly recommend using them if you are looking to rent out for very short periods of time. They charge 3% on each transaction which I think is pretty reasonable. They even sent someone out to our house to take professional photos free of charge. If you have any other questions about using them or the process feel free to contact me.
We bought a house in NH with the intent to do just this, and have had a lot of success w/the strategy. I love it. We advertise on HomeAway and have no trouble getting rentals year-round. We have a 2-night minimum (I learned early NOT to rent for 1 night) and our rates vary by season, plus length of stay varies by season (minimum of 1 week in the summer, for example). HomeAway is the only site we use; we had VRBO as well for our first year and our experience was that we had a different type of renter that came from there, plus I had more tire-kickers and people looking for something cheap who came from VRBO. The ones who come to me from HA are a more sophisticated renter who are also looking to book with the first owner who gets back to them. They've already comparison-shopped and have it narrowed down.
I can't recommend HomeAway highly enough. They have some helpful blogs on there and paperwork; I got our contracts and invoices from there. Also, get a book by Christine Karpinski, "How to rent vacation properties by owner." I read that before we ever bought our place and have very strictly followed her advice. She is right on. Karpinski also has a blog on the HomeAway site.
And here's our property! http://www.homeaway.com/vacation-rental/p255140 We currently have it rented to a family for the winter season. I need to update our spring and summer rates, as the inquiries into those have started already.
Good luck!
If you've got a great location and you don't mind the hosting and turnover aspect, then go for it. The returns are fantastic. My daughter has a studio apt. in Berkeley in a great location. Old and funky, but classic Berkeley and fixed up cute. She gets $125/night and that's still a bargain for travelers who really want to be in the area. Her unit has no off street parking and street parking during the day is limited to 2 hrs. And still, there is high demand and she could rent it every night if she didn't need to live there. She's rented it a dozen times, usually for a week minimum. Her typical guests have been parents visiting adult children living in the area. All have taken great care of the unit and been easy going and low maintenance.
Airbnb has worked great for her, but it does require that one be really responsive to inquiries. Airbnb issues 1099s at the end of the year so it's not for someone looking for under the table rental income. With airbnb listings being so visible, I also think it's a just a matter of time before all the munis start to go after these kinds of rentals for business licenses and hotel taxes, etc.
Check out airbnb for other units in your neighborhood to get an idea for prices and competition. There is especially high demand for units that are independent and have separate entrances, and they are priced way more than the b&b type arrangements.
Karin, great informational post. How often do you find you need to go to the property? I see you have a housekeeper, from your comment in the reviews, so she/he probably does turnover for you. But you are a hike from North Conway, so I can't imagine you want to go up there too often.
Check your city's rules about such short-term "hotel-style" rentals.
NY Times story about Airbnb:
http://www.nytimes.com/2012/12/01/your-money/a-warning-for-airbnb-hosts-who-may-be-breaking-the-law.html?pagewanted=all&_r=0
I also wouldn't give an exact address or exterior photo publicly if I were you, otherwise you have any whacko out there knowing you have a usually vacant rental stocked with all sorts of goodies.
Karin DiMauro, I forgot to @mention you in my post above, so please take a look at my question.Sorry about that
Jon K., good link. I can't imagine it would be an issue if you are renting out a single family house that you own in a rural location, at least not in many locations. Best to check local zoning first, though.
But if I had a tenant renting out part or all of their apartment to a third party, I'd have a big issue. Even if the property was a single family home.
Hi, Ann Bellamy - yes, our housekeeper does turnover for us and she's great. A good housekeeper is the most important hire if you're doing this from some distance. We get up there every few months on average, so she's our eyes on the property. I wait to return security deposits until I hear from her on the condition of the house (again, very rarely an issue but I like to play it safe), and if there ever has been an issue, she takes photos of the house and what she found prior to cleaning it.
We have a lockbox at the house with the key in it and change the code for each group, and our housekeeper changes the code for us. This alleviates any issues of how to get a key to the renter and gives them the flexibility to arrive whenever they need to after a specified check-in time. If we were able, I would use one of those electronic lockboxes instead - the type where the guest punches in a code and then the door unlocks, rather than having a physical key - but it wasn't in our budget.
Another key hire for renting from a distance hire would be a local handyman to handle any emergencies that come up while guests are staying there. If something breaks during a weekend stay, I'm not going to be able to get there to do it (nor do I want to anyway, even if I was local!). Luckily for us, our housekeeper's husband is our guy for this kind of thing. He has his own construction business so he normally handles bigger jobs but has treated us great on these smaller issues that sometimes arise. I'd really like to find more of a handyman who does these little jobs instead of bothering our housekeeper's husband (though of course we pay him for his trouble), but he's been great. I just haven't found a local handyman who's quick enough to respond as of yet.
That's probably a longer than necessary answer! In all, we've found the returns to be great and I think it's probably a lot easier than renting it to a traditional tenant. Plus we get to use the place as well, and it's all paid for!
And yes, you do need to check the laws for your city and state on short-term rentals like this. And we do pay occupancy tax. HomeAway doesn't issue 1099s, but we keep track of our own records and pay taxes accordingly.
Yes, it's good to check in your area.
Some cities consider these temporary rentals to be like hotels, and thus you can't use single family homes for this... zoning issues.
Rural areas might not notice, but I can't imagine many people would have much luck with AirBNB with truly rural (farm) locations. Usually they're more popular in urban cities, and urban cities tend to have more issues with it. Especially if you don't pay sales taxes like hotels and real bed & breakfast facilities do.
Some cities might not care if you do these short-term rentals at all. Also check with your insurance. And, HOA if you have one.
The article I posted mostly talks about tenants subletting, which is a big no-no in most leases. Yet, some do it anyway.
Karin DiMauro it seems we operate our rentals pretty similarly (housekeepser, lockbox, handyman) I rarely get to stop by my place so it's really nice to have reliable people "on the ground".
Jon K. where my property is we get totally screwed I have to have a business license and collect tax, but it really hasn't affected my rentals or returns much. This is also because the property is near the Las Vegas strip and is subject to a lot of strict rules.
Gene Hacker I have found the same thing about Craigslist, scams, solicitors, or people wanting to have a party.
Nicolo- I've been on both ends of the VRBO, Home Away, Vacation Rentals etc. They've gotten very pricey, if you want quite a few pictures. I've been the owner on 5 condos in Cancun for over 30 years and have used those sites for a long time. Now that I have second generations coming and have "sold" most of condos to my kids, I don't need all the sites. Just select one and try it slow first. I've also rented from others on the same sites and have been MOSTLY satisfied. The sites have grown huge in time I've been using them. Rich
I agree they have gotten pricey but the price I pay is directly related to the number of bookings I receive so its sort of worth it. Most of them pay for themselves with one rental and if you play well enough they give you discounts.
Does anyone have experience with specific sites or companies that cater to placing corporate executives or traveling medical professionals? If you have only found them through VRBO, what verbiage/headlines have you used to attract these types of clients?
John,
VRBO…Expensive, for super popular vacation rental areas, has a client base that has more money and is looking for nicer accommodation. Can opt to use VRBO Reservation Manager = AWESOME vacation rental workstation manager
Airbnb…Inexpensive, "hipster" version of VRBO, takes a fee off the reservation, has a younger clientele that is looking for good deals
I believe your situation might be better suited for Airbnb though. VRBO would be good to have as well, you'd just have to keep up on updating both calendars/spend for both.
You also need to look into your state's taxes…In Hawaii where my rental is located we not only have to pay GE tax but the "hotel" TAT Transient Accommodation Tax" which both total to about 14%!
As far as managing a vacation rental goes, you'll find the nicer the place you have the better people leave it. When guest stay at a nice place they'll think "hey this guy is on top of it" meaning the owner will be on top of any deductions from the damage deposit…After a year of vacation renting I've found the most trouble you'll get is broken kitchenware or dings in the wall. It's tough to screen a guest but if you charge a premium you'll usually get older more responsible guests…
Key to making a vacation rental work is to ensure your reviews are near perfect, your cleaners are reliable and understand you run a mini hotel, your customer service is excellent, always be available for questions and respond quickly, offer more amenities then the competition, set up systems to where you have "canned" email response, rental agreements, check-in instructions, condo/local area info book/powerpoint! http://www.vrbo.com/426946
Best of luck man!
Hi John,
It has been a year since you began this thread, and I am curious what you ended up doing with your one bedroom unit? If you decided to advertise your unit on one of the internet sites, how did the listings perform for you? Did you decide to manage the property yourself and if so, how was that experience for you? Hoping you had a great experience!
@Jon K. A little late to the party but, if you still have a vacant property, do it it's totally worth it! I live in San Diego and cash-flowed 3-4k per month in July and August in my tiny 450 SF studio apartment with 80's-era appliances. I had to quit because landlord caught on but I had September and most days in October booked at $80 a night. You charge more per night anytime there is a big event/festival/conference in your area. Also you charge more per day on weekends and generally in Summer. Regardless, it's still less expensive than a hotel. It involves some work but It is totally worth it (Cleaning after every guest, greeting and providing EXCELLENT customer service so you can maintain high ratings, etc), Alternatively, you can hire people to do work for you. Costs vary depending where you live. If anything happens, you'll be insured by Airbnb's insurance. Of course make sure there will be no conflict of interest with your landlord insurance. Good luck.