Las Vegas VRBO, AirBnB, Short Term Rental
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?