All my applicants want to sublease through AirBnB etc
Member since 2021 · 12 posts · 2 votes
So I am in the process of finding a tenant for my first rental (a townhome in Houston with no HOA). Many of the inquiries that we get are from people looking to lease and then re-list on airbnb or VRBO etc. I have listed properties on Airbnb before and have found that people generally take care of the place and maintenance expenses are usually minimal as most people just want a place to shower and sleep when they are in town.
My question is, what should I be wary of with this type of arrangement? My thinking is that if I am receiving rent at a fair rate, it shouldn't matter really. Should I request anything specific in this situation?
Appreciate the help :)
@Liam Martin Ruane if that many people want to Airbnb your property, why not just do it yourself or with the help of a property manager? There might be more money to be made through Airbnb than an LTR
@Liam Martin Ruane if that many people want to Airbnb your property, why not just do it yourself or with the help of a property manager? There might be more money to be made through Airbnb than an LTR
Agree that if you're getting that much interest in someone Airbnb Arbitraging your property, maybe just do it yourself instead.
@Liam Martin Ruane I agree that this is an indication the STR demand is high in your area. I would do my own research on the numbers but also consider your personal situation. STR is a lot more active than renting to tenants. Both active but STR more active. Depends what type of investing/work you want from this property.
Never never never! Have you never stayed in a hotel? Did you treat that hotel with respect? I can tell you I sure don't. If I rented an entire house there is going to be a loud drunken party, and nobody cares what happens.
Regular tenants, on the other hand, have to live in fear of eviction, and have a bigger deposit.
Have you ever ran a STR? Honestly from this comment it doesn't seem so. You get to put eyes on the property every few days. It gets cleaned every few days. The renters typically are not moving furniture around. You don't have to worry about non payment of rent, squatting, ect.
there are definitely downsides to short term rental but in my opinion it is more lucrative and safer than long term rental. A short term renter has never let their kid ride their bike inside one of my houses. (At time of posting anyways)
there are definitely downsides to short term rental but in my opinion it is more lucrative and safer than long term rental. A short term renter has never let their kid ride their bike inside one of my houses. (At time of posting anyways)
No, I haven't, I've got better things to do, but there is a big difference between running the place yourself as such or letting another person sublet. I would consider it safer doing it myself but still not interested with the huge increase in work. I should mention I live in a resort town on a lake and that's where most of my rentals are, there are tons of STRs here, but when you calculate in the vacancy times during the winter it isn't worth much more. Definitely not worth the extra work. I do know several owners of them and yes, they are high maintenance.
I have stayed in several STRs, and like I said, not a single care was given to the premises. Drunken party is the nicest part I can say in public. They were not treated with any respect. I did not have any deposit to lose, and even if you did get a small deposit, it likely won't be anywhere near what a monthly rental deposit is. Your tenant will never have renter's insurance, which I always require.
Air BNB has become something of a problem in a lot of places, due to the constant use of the homes for parties and doing drugs and prostitutes and all sorts of other things you might also do at a hotel, except they are usually located in a quiet neighborhood causing all sorts of issues with the neighbors. So many states and cities have had to pass laws. So many HOAs prohibit it entirely. This isn't because people want them around. If this is going on in your house then you need to be the one in charge and you need to be making all the money.
I would not sublet.
with that said - just because you disrespect other people's property - it does not mean it's the norm. There are ways to insulate yourself from bad actors and as time goes by we have fewer and fewer issues.
It most certainly is the norm. These people are on vacation. That means they don't intend on doing any sort of work. They see your house like a hotel and as such no care is taken. Nobody takes care of hotels, that is absolutely the norm. Maybe they just slam the door too hard. And then another guy stains the carpet. And another guy scratches the sink. It all adds up real quick.
This is why you see them build a big fancy Hilton or something, then in just a few years they sell it to a cheaper hotel brand, and then again, and again, until it becomes a slum. It happens surprisingly fast, they are high maintenance buildings, it's just the way it is. They consider them disposable rather than fixing/maintaining them most of the time.
Honestly I'm not sure what you are talking about at this point. When I go on vacation I eat breakfast at the place I'm staying and come home late at night. Same with the majority of our guests. We have 2 properties that we own and airbnb (3 units, 4th coming soon) and I can count all the issues on both hands over a 350ish stay period. Mind you some of these could have been avoided , learning curve type thing.
we don't allow 0 review guests. We are friends with our neighbors (who have our number in case of weird stuff going on). We don't allow guests who are not recommended by other hosts. We don't allow less than 5 star guests. We don't accept bookings from guests who write us weird into messages.
In closing- to answer the question there is no way I would let someone else run a hotel out of my home. If the OP is getting so many offers he may want to look into doing it for himself. Running 1 or 2 units is a breeze.
My husband and I leased 2 houses from the same owner and listed them on Airbnb in San Antonio. We had a great relationship with the owner. If you do consider allowing someone to do that with your home, make sure it's someone who's already had success with STR. We had already been Airbnb Superhosts for at least a year when we decided to start that venture. We showed the owner our other listing and all of our great reviews to provide some peace of mind. We didn't allow pets or parties in our listings and he appreciated that. Thankfully, we never had massive parties or guests who destroyed our house. There were times when maintenance was needed (new shower head, sliding closet doors, fresh paint from bags hitting walls, etc.), but we had a handy man who took care of all that for us. I say all that to say, if you allow someone to Airbnb your house, make sure you know they are already set up to be responsible for the house. Don't accept a first time host. If you get someone who is set up properly, it's easy cash flow for you. Even if they have months they don't hit their numbers, you aren't affected.
Hmmmm thank you all for your input. A variety viewpoints which is interesting and conflicting at the same time. I have also done Airbnb together with my girlfriends property when she moved in with me for about 6 months and I never had any issues. We also didn't do remote check in and handed them the keys and met guests personally so I have a theory that guests behaved due to actually attaching a name and face to the property they are staying in.
I plan on leaving the country in a month or so for about 9 months, so I couldn't do AirBnb myself, but I have looked into a property manager.
How would you compare a full service STR property manager with just leasing it to and experienced AirBnb sub leaser?
It is interesting that you are getting so many inquires from people wanting to use as an AirBNB. That can indicate two different things:
1. The area is prime for AirBNB.
2. The area is saturated with people wanting to do AirBNB.
Keep in mind that COVID gave a huge advantage to AIrBNB over hotels and resulted in tons of new customers discovering AirBNB. It also affected vacation patterns, with people choosing states like Texas with less restrictions. The question is what happens post-COVID? Do people migrate back to hotels and move back to tourist destinations like California and New York, which were hurt more by COVID (and their response)? Hotels offer advantages like consistency, flexible cancellation, breakfast, pool/workout/business services, reward programs, etc.
I run a short term rental on AirBNB and after a year, the property is in excellent condition. One benefit is the constant cleaning and upkeep necessary to maintain good reviews. I have had some damage done by guests, but I also had to repair it immediately for the next guest. I would estimate that overall wear is probably less than a long term rental, but it depends on who is managing the property. We do remote check in with every guest having a unique electronic code for the door lock. I have only met two guests in the year we have been doing it. One was due to a carbon monoxide detector going off. That was due to fumes from brazing when we had new HVAC installed between guests. The other guest was a long term stay and I had to replace batteries in the door lock. Both situations could have been managed remotely with a handyman or cleaning person.
If I was leaving the country, I would seek out a long term rental guest. The reason is due to response time on service calls. If you have a STR guest, they are not going to meet people at the property to do repairs. If you have a STR subleaser, they are going to demand immediate repair, so their guest reviews don't suffer. My point is STR puts more pressure on everything, whereas long term tenants will be more understanding and work with you on repairs or maintenance. Less stress in my opinion.
@Liam Martin Ruane
Don’t do it. That would be a hard NO for me. Liability for 1. If it’s so great for that situation, just do it yourself and make the money yourself.
@Liam Martin Ruane
Nothing of real value to add here, except to parrot the other advice in this thread and consider managing this property as a short term rental yourself if you indeed have that much interest in subletting.
Cheers and good luck
@Liam Martin Ruane so I have thought about this a lot lately. I’ll give you my opinion 😎
First off, I bought a rental car as my primary car from Hertz. Best car I've ever had. Rental cars get oil changes and detailing regularly and are in impeccable shape for purchase (they don't use them after 50k miles). I think this is the same for an AirBNB. Hosts of STRs do not want to have someone stay at their place unless it's perfect, ESPECIALLY in a competitive market like Houston. If anything, someone with an STR may even make improvements your place with your permission.
I would either do as many people have said and STR it yourself, or charge more to allow the tenant to conduct their STR business! You could even go so far as asking for a percentage (not sure legally but why not?). If you don't want to do the STR work yourself, I would totally rent to one and charge them more, plus maybe think of putting something in their lease about STR damages or something?
So I am in the process of finding a tenant for my first rental (a townhome in Houston with no HOA). Many of the inquiries that we get are from people looking to lease and then re-list on airbnb or VRBO etc. I have listed properties on Airbnb before and have found that people generally take care of the place and maintenance expenses are usually minimal as most people just want a place to shower and sleep when they are in town.
My question is, what should I be wary of with this type of arrangement? My thinking is that if I am receiving rent at a fair rate, it shouldn't matter really. Should I request anything specific in this situation?
Appreciate the help :)
Landlording 101 - Never, and I mean NEVER let your tenants sublease. This is going to put a ridiculous amount of risk on your shoulders, especially in a post covid world where moratoriums are the norm.
@Liam Martin Ruane I would ask them what's in it for you, and what is their experience level? What do they do about guest damages? Will they handle minor repairs? Insurance? If you decide to do it, get other references on places they have sublet. You don't have to decide before you hear their information. I would not do it myself being out of country. Even a long term tenant if you are out of country and you are managing yourself could be an issue due to time zones etc. but this is worth it to get more info because there may be advantages and disadvantages based on how it is structured. Also when all bookings were canceled due to covid what did they do?
What would stop you from simply managing the STR yourself? I would encourage you to compare the numbers. Evolve is a STR management company that charges 10% and they pretty much do everything.
As someone who has owned and operated several airbnbs, has had an arbitrage before, and has long term rentals I can see how it could be great or be problematic.
There is something to be said about having the house cleaned weekly and having access to it regularly. This for the most part means it it kept up well, but also people that stay in airbnbs live hardddd. They flush everything down the toilet that can be flushed down the toilet. They put holes in walls, all kinds of stuff.
I think if you're leasing to a reputable operator you should be fine and it will probably be a good arrangement for both of you. I would make sure you're clear on who fixes various things and to what extent. At the house I had as an arbitrage we paid to clean the sewer the line after it was clogged by wipes, condoms, whatever else...but then eventually found out it had serious plumbing problems. An area of the house drained directly into the ground, and the other line was collapsed but then the owner didn't really want to fix these issues or not with any expediancy when he did. It's really hard to rent a big nice airbnb that has a bathroom that doesnt work or every 3-4 stays the sewer line will back up into the tub.
If they have good systems I think it should be fine, and whereas it's nice to see the house weekly, people that stay in short term rentals don't take care of things very well.
And to everyone asking why she doesn't just manage it herself I think that's the wrong questions. Running a hotel and having a longterm rental are two different businesses and that's not factoring in the up front costs of furnishing.
I personally wouldn't have a problem with this arrangement because I'm not up for as much work goes into STR's. However, it would cause me to rethink my lease agreement, rental fee and deposit/cleaning fee (maybe a fixed amount per month OR a certain percentage of rental income from tenant's, whichever is greater).
At least you won’t have to waste any time or money doing background, criminal or credit checks on these people. After all they aren’t the people using your place. I’m 100% positive if your neighborhood outlaws or limits Airbnb these people will keep paying you rent and not disappear into the ether.
Zero percent chance this is a good deal for the landlord. I assume some “guru” just blew through your town telling people who didn’t have 2 nickels to rub together they could just “borrow” your property with zero down and zero risk.
Some thoughts:
We have some of the oldest STRs on the site. They pre-date AirBnB and VRBO by about a decade. I have a few horror stories. I also recognize STRs are a lot of work.
It is a bad idea to not use a professional, licensed PM to manage your STRs if you cannot manage them yourselves.
Good luck
@Liam Martin Ruane
I would be on the lookout for liability. If your tenant rents it out through AirBnb and the place is damaged, the guest is injured, or a crime is committed etc you need to make sure your bases are covered from a legal perspective. Who is responsible, who pays etc. Make sure it's spelled out clearly in the lease and compliant with local laws and codes.
*Not legal advice, please seek a professional.
@Liam Martin Ruane
If you're not going to STR it yourself, 100% lease it to a reputable person who will.
Without a doubt, STR is less taxing on your property. Hell, half the people never even touch the appliances. They sleep, take a shower, toss some fast food wrappers in the trash, and move on.
So I am in the process of finding a tenant for my first rental (a townhome in Houston with no HOA). Many of the inquiries that we get are from people looking to lease and then re-list on airbnb or VRBO etc. I have listed properties on Airbnb before and have found that people generally take care of the place and maintenance expenses are usually minimal as most people just want a place to shower and sleep when they are in town.
My question is, what should I be wary of with this type of arrangement? My thinking is that if I am receiving rent at a fair rate, it shouldn't matter really. Should I request anything specific in this situation?
Appreciate the help :)
If you absolutely cannot run it as an AirBnb yourself, then the kind of person you make the agreement with is obviously the biggest factor. Is this person seasoned at this sort of thing or brand new? After that, clarity is everything. Who is going to be responsible for what? Day-to-day maintenance should be handled by the operator. Make sure these things are clearly spelled out in a written document. Also, I would make sure the AirBnb operator has short-term rental insurance to protect against guests getting injured on the property. There are some short-term rental insurance providers that allow you to pay for coverage by the booking so this could be an option.
Having said this, it seems like the list of things that can go wrong far outweigh the list of things that can go right.
IF you do this, make sure you have insurance that will cover it and have in the contract with the leasee that they will pay the deductible for any claim or have their own insurance as well that covers hoteling. And be very clear that you will not be doing any repairs--toilet plugged, carpet stained/torn, facet dripping, whatever. They can drive you nuts with repair requests and with vacationers they will want it fixed immediately.
Personally I turned people down who wanted to sublease my house a few blocks from a marina. I did not want to annoy the neighbors or have a house destroyed by partiers.
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@Liam Martin Ruane I didn't even know price would rent to then lease on air bnb. I thought it was pretty standard not to sublet. If that's the case you might as well do it yourself. It sounds like you have a great property.
@Liam Martin Ruane if you are considering str maybe rent to nurses or some other type group of professionals. Also I don't know how big your property is but you could also choose to rent it by the room. I also run a cleaning company here in Fort Worth but make sure you higher good cleaning company that will consistently clean your property. And I guarantee you if you take care of them they will definitely report back any damage to your property.