Leasing to a Property Management management company - clientele

Leasing to a Property Management management company - clientele

Member since 2021 · 14 posts · 1 vote

Hello, we recently bought a beautiful 3br/3ba condo in a nice area of town, and we have advertised the property for lease on Zillow. It is definitely the nicest unit we have, and you could consider it a "luxury" unit. We have been approached by a property management company who are interested in leasing for 2 years. They say they are looking to accommodate nurses and business personnel, mostly for longer stays. However they insist that they must be able to accommodate short term business clientele, for 4-5 night stays, in order to stay profitable. They also say they carefully vet their clients, and don't allow parties or loud activities. They clean between each client, like air bnb, and do their own maintenance.

They have sent us a sample lease which I sent to the HOA, and I was a bit shocked that they accepted it. So now we are toying with the idea of doing a lease with them, but we want to protect ourselves from "AirBnB" type bookings taking place.

Does anyone have experience with this, and can you share some of your experiences and advice? How do you allow short term stays being booked, while keeping out the young and party crowds? Thanks in advance!

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  • Bjorn AhlbladPro Member
    Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
    4y

    @Kai G. If the HOA went along it means they did not read it and will give you grief later. 2 years would be too long for me. They are not going to vet anyone who stays 4-5 nights beyond a CC and driver's license. This is not an uncommon business plan, and it is usually carried out by operators who are poorly funded. I'm not saying don't go ahead. This would not work for me. Way too much risk.

  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    4y

    They are renting it for less than 30 days at a time, which is exactly what AirBnB is. It's referred to as AirBnB arbitrage and - in my experience - it is typically done by amateurs looking to make a fast buck. They won't care about your property or HOA rules. They won't vet any of their guests any more than a hotel does. And when the market turns, they will drop you in a heartbeat and leave you with a mess.

    If you're going to let someone sublet/sublease your rental for a profit, you should only consider it if you can confirm they are professional and they are willing to share some of the profit and reward you for the increased risk.

    Personally, I would walk away and stick to your original investment plan.

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  • Member since 2021 · 14 posts · 1 vote
    4y

    Thank you both very much for your replies!!!

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