Las Vegas VRBO, AirBnB, Short Term Rental

11 Replies

Hi,

This is going to be a long post.

Before I ask the vague question "should I buy a property in Las Vegas for the purpose of short term rental?" on BiggerPockets I thought I might ask the owners themselves first.  I did a little experiment by sending this message to hosts on AirBnB:

Hi ___,

My first question is: is there anything I could do to make my copy better?

I've gotten many responses back even though I only sent 30 (30 is apparently the maximum number of messages you can send per day) and here are a few highlights:

"The house is doing very well and rented most of the time. The condo is every weekend for sure. You should know that las vegas limits the Airbnb rentals to no closer than 700 ft and that there is licencing. In my neighborhood for example there are 5 vacation rentals and that's all we can have. Its been a very good investment but it has been an incredible account of work due to volume back to back bookings and the pool is a daily chore in our dirty windy desert. I would do it again for sure."

"Stay in my place for one day and I'll share more info"

"Little English"

"Our home is located about 15 minutes away from the strip, which is "far" based on Vegas standards. However, I can provide you with our stats:

Between Nov 20 2015 (when we started) to now, we've hosted 181 out of the 229 nights available (79%). However, we intentionally block out times when our friends visit and stay with us, so our actual occupancy based on available days is actually higher. Our average rate is $54/night and average length of stay is 2.2 nights. Our rates and length is stay have steadily increased over time as we accumulate more reviews. We are running about $65/night now on average.We make the most on weekends and holidays. Running about $80 on weekends and about $99 on holidays (the town generally is sold out).

Since you're looking for an investment, running an Airbnb closer to the strip will yield you much higher rates and occupancy then what we do. Also, we are only renting out one room whereas you might be renting out an entire place, which would also yield higher rates.

I actually work as a Realtor in Las Vegas, so I can always help you find an appropriate property near the strip. Just let me know your criteria."

"It doesn't seem to work well here. I feel people are expecting more of a resort style experience. Because of this in am often vacant. Plus all the near strip areas are high in crime and homelessness. This has not been pleasing to my guest. So I'm not sure if I will continue. Soon I think i will be switching back to month to month rentals."
"Things have been great on Airbnb and I love this business. Have been very easy and a great extra revenue maker. Need any help? Always here to help :)"
"Right now there is a threat that Vegas will outlaw short term rentals. There has been a lot of meetings regarding it. The market is ok, as your competing with an abundance of cheap hotels. In most cases it's better to do long term rentals."

"Get certain instances due not supply internet fast speed guest downloaded torrent federal offense also make sure ask property if allowed I recommend living on site property.

Pick only highrise guard gated.

Make sure you have someone on site at all times.

Make sure that the place allows you to do it there's some places that have strict HOA you need to make sure.

Hire a host to monitor ur place too."

"If you not living in Vegas I wouldn't recommend to invest. Our properties doing well but we do all maintain and cleaning by ourself if we need to pay for those hasn't been a good business for us. Hard to manage if you not living in town. Sometimes need to show up randomly about issues in the apartments or people can't able to check in They lose keys etc. You have only few hour gap between check out and chech in time usually 4hrs. Thats my experience Let me know if I can help with any other questions"

"HI Angelo,

Thanks for the message.

I'll give you the same advice I recently gave a friend--she and her husband are considering snagging some condos to use as Airbnb rentals. So this is really long. But...

I'm busy as all get out, but I rent rooms in my home, and they are really inexpensive.

To get started and get reviews, I had to list them at very low prices, but within just a few months, they got busy. In the past two+ years, I've only had the rooms vacant for maybe a total of 30 days (unless I had the room blocked off or pulled the listing so a friend could stay with me).

I've spoken to some folks who own condos, and it sounds like they are reasonably busy. But I don't know what their occupancy rate is. I do know there were studies in select cities (I think LA for sure) where they found that given average airbnb rates, occupancy, and rents, most folks would actually make more not doing Airbnb. (Especially after paying for utilities, insurance, possible HOA/Condo Association fees, and decking the place out.)

Vegas is one of the lowest priced markets on Airbnb because of how cheap hotels can be--rooms downtown can be as little as $19 per night. Even some strip properties are often $50 per night or less. Unless you are on the strip, off East Fremont, or super close to one of these (or have a really, really baller property you can offer at a competitive price), you won't be able to charge very much. Most whole "homes" are around $100/night the last time I checked.

As an aside, some folks I know who are savvy to local real estate are expecting another mini-bubble in a few years, as prices rose again pretty quickly and have now seemingly plateaued. It's just speculation, but if you're financing, that's something to think about too.

And we haven't fully "legislated" Airbnb. You can get your business license and permit under certain rules, but most folks aren't able to get those (and do it anyway until they get caught, which is happening). So there's that uncertainty.

So my advice is to do a ton of math. Figure out what a property would cost per month (spread out furnishing costs over one year, and don't forget cleaning, landscaping if there's a yard, internet, etc.). Then see what the minimum you'd have to charge per night to make that up, assuming maybe 50% occupancy. If your pricing is competitive with the market, it may be a go then.

I hope that helps!"

So anyway, my initial thought was that Vegas is a global tourism spot and so would be good to have some short-term rentals there.  However, my main worries are legislation and the possibility of high vacancy/low rent needed.  Seems like general opinion is somewhat mixed.

But anyway, has anyone here done short-term rentals in LV?  How has it been for you?

I will chime in as a visitor. From my perspective, hotels are so inexpensive and are right in the middle of everything, I would not look to rent off strip. First, you aren't going to save much (if anything), second, you gonna depend a lot on transportation (either UBER or use your own car and pay for parking).

@Angelo Wong What a great idea to reach out to other Airb&b hosts and ask their opinions. I was thinking about doing the same thing awhile ago with Condotels at Palms Place. Obtaining financing for Condotels such as Palms Place & MGM Signature is very tricky to obtain and also the legislation uncertainty was what made me shy away from the idea. Also, HOA's are very prevalent here and can cut your Airb&B business short with their regulations. Las Vegas is mostly made up of HOA run communities. I live here, but work full time and was planning on turning over the rooms mostly myself, but I would have most likely needed to hire someone to help. I had also heard that one bad review could really have a negative effect on your profits and vacancy rates. Therefore, good service and making the guests happy is CRUCIAL. You definitely would have to either be here or have someone local you really trust to be minutes away from the property at any given time. Imagine if there was an issue, toilets clog and flood with guests there? How quickly could you get there or have someone there to fix the problem? If not addressed quickly and guests made happy and bad review. There are alot of things to consider and the advice you got from the current hosts is really helpful.

Thanks for posting your experiment results!

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@Angelo Wong

Once again, great idea reaching out to Airb&b owners, but I think there are just way too many rooms in Las Vegas. There are also plans for more hotels (Wynns new tower, Lucky Dragon, Echelon) to open adding to the supply. Also, like George P. said, people would rather stay on the strip to avoid spending on transportation (and now parking, thanks to MGM taking the lead in charging for parking)

I would still reach out to these owners, but maybe hold them as long term rentals.

Great topic.  I recently purchased a timeshare property in Las Vegas south of the strip and am looking to rent out the 2 extra weeks we received.  Would peoples airbnb comments still apply?

I have 2 friends who Airbnb 2 condos they own near the strip. One is a 3 bed 2 bath that sleeps up to 8 people that is sold for about $250 a night and he makes on average around $4000 a month from. The other is a one bed 1 bath that that allows up to 4 guests that makes $2k per month . As upkeep is fairly cheap since the Airbnb guests tend to be more clean than a tenet .

As of now they are Doing well and plan to keep doing it , a big help for them however is we are all in the night club industry so if it's not full we have a lot of people who would be willing to stay in the Rental. I myself am planning on buying a condo in the area and doing the same.

Vegas is hard. You're dealing with tons of competition, legislation, a weird housing market, HOAs, a very specific tourism market, crime... On the other hand, it's a fairly cheap area, tourism is year round, weather is good, property is still available. It's just not a simple yes or no, it takes a lot of research and effort. 

Hey Angelo did you ever purchase a house in Las Vegas? I was considering the same and ran into your post. Let us know please thanks

Originally posted by @Angelo Wong :

Hi,

This is going to be a long post.

Before I ask the vague question "should I buy a property in Las Vegas for the purpose of short term rental?" on BiggerPockets I thought I might ask the owners themselves first.  I did a little experiment by sending this message to hosts on AirBnB:

Hi ___,

My first question is: is there anything I could do to make my copy better?

I've gotten many responses back even though I only sent 30 (30 is apparently the maximum number of messages you can send per day) and here are a few highlights:

"The house is doing very well and rented most of the time. The condo is every weekend for sure. You should know that las vegas limits the Airbnb rentals to no closer than 700 ft and that there is licencing. In my neighborhood for example there are 5 vacation rentals and that's all we can have. Its been a very good investment but it has been an incredible account of work due to volume back to back bookings and the pool is a daily chore in our dirty windy desert. I would do it again for sure."

"Stay in my place for one day and I'll share more info"

"Little English"

"Our home is located about 15 minutes away from the strip, which is "far" based on Vegas standards. However, I can provide you with our stats:

Between Nov 20 2015 (when we started) to now, we've hosted 181 out of the 229 nights available (79%). However, we intentionally block out times when our friends visit and stay with us, so our actual occupancy based on available days is actually higher. Our average rate is $54/night and average length of stay is 2.2 nights. Our rates and length is stay have steadily increased over time as we accumulate more reviews. We are running about $65/night now on average.We make the most on weekends and holidays. Running about $80 on weekends and about $99 on holidays (the town generally is sold out).

Since you're looking for an investment, running an Airbnb closer to the strip will yield you much higher rates and occupancy then what we do. Also, we are only renting out one room whereas you might be renting out an entire place, which would also yield higher rates.

I actually work as a Realtor in Las Vegas, so I can always help you find an appropriate property near the strip. Just let me know your criteria."

"It doesn't seem to work well here. I feel people are expecting more of a resort style experience. Because of this in am often vacant. Plus all the near strip areas are high in crime and homelessness. This has not been pleasing to my guest. So I'm not sure if I will continue. Soon I think i will be switching back to month to month rentals."
"Things have been great on Airbnb and I love this business. Have been very easy and a great extra revenue maker. Need any help? Always here to help :)"
"Right now there is a threat that Vegas will outlaw short term rentals. There has been a lot of meetings regarding it. The market is ok, as your competing with an abundance of cheap hotels. In most cases it's better to do long term rentals."

"Get certain instances due not supply internet fast speed guest downloaded torrent federal offense also make sure ask property if allowed I recommend living on site property.

Pick only highrise guard gated.

Make sure you have someone on site at all times.

Make sure that the place allows you to do it there's some places that have strict HOA you need to make sure.

Hire a host to monitor ur place too."

"If you not living in Vegas I wouldn't recommend to invest. Our properties doing well but we do all maintain and cleaning by ourself if we need to pay for those hasn't been a good business for us. Hard to manage if you not living in town. Sometimes need to show up randomly about issues in the apartments or people can't able to check in They lose keys etc. You have only few hour gap between check out and chech in time usually 4hrs. Thats my experience Let me know if I can help with any other questions"

"HI Angelo,

Thanks for the message.

I'll give you the same advice I recently gave a friend--she and her husband are considering snagging some condos to use as Airbnb rentals. So this is really long. But...

I'm busy as all get out, but I rent rooms in my home, and they are really inexpensive.

To get started and get reviews, I had to list them at very low prices, but within just a few months, they got busy. In the past two+ years, I've only had the rooms vacant for maybe a total of 30 days (unless I had the room blocked off or pulled the listing so a friend could stay with me).

I've spoken to some folks who own condos, and it sounds like they are reasonably busy. But I don't know what their occupancy rate is. I do know there were studies in select cities (I think LA for sure) where they found that given average airbnb rates, occupancy, and rents, most folks would actually make more not doing Airbnb. (Especially after paying for utilities, insurance, possible HOA/Condo Association fees, and decking the place out.)

Vegas is one of the lowest priced markets on Airbnb because of how cheap hotels can be--rooms downtown can be as little as $19 per night. Even some strip properties are often $50 per night or less. Unless you are on the strip, off East Fremont, or super close to one of these (or have a really, really baller property you can offer at a competitive price), you won't be able to charge very much. Most whole "homes" are around $100/night the last time I checked.

As an aside, some folks I know who are savvy to local real estate are expecting another mini-bubble in a few years, as prices rose again pretty quickly and have now seemingly plateaued. It's just speculation, but if you're financing, that's something to think about too.

And we haven't fully "legislated" Airbnb. You can get your business license and permit under certain rules, but most folks aren't able to get those (and do it anyway until they get caught, which is happening). So there's that uncertainty.

So my advice is to do a ton of math. Figure out what a property would cost per month (spread out furnishing costs over one year, and don't forget cleaning, landscaping if there's a yard, internet, etc.). Then see what the minimum you'd have to charge per night to make that up, assuming maybe 50% occupancy. If your pricing is competitive with the market, it may be a go then.

I hope that helps!"

So anyway, my initial thought was that Vegas is a global tourism spot and so would be good to have some short-term rentals there.  However, my main worries are legislation and the possibility of high vacancy/low rent needed.  Seems like general opinion is somewhat mixed.

But anyway, has anyone here done short-term rentals in LV?  How has it been for you?

Hey @Akash Y.

Actually I didn't - I talked to a bunch of people and it seemed like remote management of short-term rentals could be a pain. Also asking around for the numbers, they just didn't seem to make sense. So now I sublease places locally and re-rent it out at a higher price to make the spread. Only 6 units so far but it's working well enough (but I could also see how managing remotely could be very bad as there are enough headaches managing locally).

Interesting note, I think Airbnb's algorithms look for bots/scammers, and I think my behavior of polling a bunch of landlords was identified as spam, so they perma-banned me. So perhaps not a great idea to ping landlords. Maybe make a fake account on an IP address you never use if you want to do such a survey in an area you're interested in.

I don't think that legislation is a huge issue so far - there's always ways to sidestep it, etc. and they generally are not enforced (unless under HOA which most newer homes are). Also low rent is also generally needed because 1) tourists are willing to pay more to be on the strip (it's a gambling market so they are OK to spend money), and 2) hotels on the strip are already really cheap and in high supply. Seems like you'll only be able to bag road-trippers passing through or the overflow market during conferences, of which there are a lot. Or maybe if you're close to UNLV some students or professors. Completely speculating now, though.

Originally posted by @Angelo Wong :

Hey @Akash Y.

Actually I didn't - I talked to a bunch of people and it seemed like remote management of short-term rentals could be a pain. Also asking around for the numbers, they just didn't seem to make sense. So now I sublease places locally and re-rent it out at a higher price to make the spread. Only 6 units so far but it's working well enough (but I could also see how managing remotely could be very bad as there are enough headaches managing locally).

Interesting note, I think Airbnb's algorithms look for bots/scammers, and I think my behavior of polling a bunch of landlords was identified as spam, so they perma-banned me. So perhaps not a great idea to ping landlords. Maybe make a fake account on an IP address you never use if you want to do such a survey in an area you're interested in.

I don't think that legislation is a huge issue so far - there's always ways to sidestep it, etc. and they generally are not enforced (unless under HOA which most newer homes are). Also low rent is also generally needed because 1) tourists are willing to pay more to be on the strip (it's a gambling market so they are OK to spend money), and 2) hotels on the strip are already really cheap and in high supply. Seems like you'll only be able to bag road-trippers passing through or the overflow market during conferences, of which there are a lot. Or maybe if you're close to UNLV some students or professors. Completely speculating now, though.

 I actually manage remotely right now and it's not too difficult if you have the right personal lined up. 

Looking at other Airbnb listings of 4 bedroom houses that can sleep 16 people (that's my target visitor) rooms go for 300+/night and hosts are fully booked for the next few months. 

I host currently in AZ and I live in Canada and I'm a super host so it's not difficult at all. 

Hey Angelo,

I am looking into this myself and can tell you that anything in Unincorporated Clark County is not allowed. So basically anyone renting anything on or near the Strip, according to Clark County, is in violation of county code. Enforcement has yet to take effect which is why you'll see listings on AirBNB and the like all over the Valley. The City of Las Vegas and the City of Henderson currently have legislation that allow STR's. But with Henderson, Lake Las Vegas is the only place that has been given the green light and that has was given to 2 properties that made the cut. Im optimistic that Clark County will get on board but only time will tell. Heres an article from Clark County with regard to STR's that is a place to start with resources regarding the legality in each of the cities.

http://www.clarkcountynv.gov/administrative-servic...