If you tell your landlord what you plan to do, it doesn't take too much thinking for him to think "Why don't I do this myself? I have a wife/cousin/neighbor/friend/inlaw that can help me do what Sonia Thiebeau is going to do in order to run the property as a STR or VR".
But, I digress. My suggestion would be to look on Craigslist for a suitable rental. Or buy a house with cash and do it without any restrictions.
I've had success renting out my 22 STR's to travelling contractors at a local petrochemical refinery and sister fertilizer plant. Maybe find a niche, other than vacation rentals. I know some people that buy campers, fix them up, and rent them out by the week.
I think most landlords are going to have leases that prevent this sort of thing. Generally landlords don't allow this and don't like it. They want to know who is in the property. Plus, being AirBnb this might be some extra liability through their insurance company that they wouldn't be covered for if there was an injury on the property. So then they're liable for the damages... or perhaps you are. Or perhaps they're liable and then they sue you. Either way, no bueno.
Yeah, you might be able to find a landlord who does a deal on a handshake or writes up some weak lease on microsoft word, but you better tell them your plans before getting started. I'm thinking they won't like it, and if you do it without telling them and they find out, they'll probably raise hell.
My general thoughts are if something sounds too good to be true, it generally is. And using someone else's property to lease out for a higher rate than you're paying sounds just like that.
I would much rather advise buying your own property to do this with rather than trying to do it with someone else's. Too much could go wrong.
I was asked by an applicant about a year ago and he asked to do just that. Shockingly he asked me straight up instead of signing a lease and doing it behind my back. He is smart, was money focused, recently graduated with a solid engineering job, and was thinking of ways to cut his costs. So he asked me if he could air bnbthe 2nd bedroom and cut me in on the profit.
It just spells trouble and the benefit for me was little to none at all. I can't imagine your average Landlord being OK with this proposition.
Thank you, all, for your replies. Can you explain in more detail why you feel this is such a risk? Can’t these details be addressed in the lease agreement? I feel like it poses less risk to the landlord, as we would take the responsibility in making sure the rental property stays in pristine condition. I also feel like the landlord could benefit by receiving a higher monthly rent premium or percentage of the profits received.
@Sonia Thiebeau It's like this...suppose someone wants to borrow your car for a few days. You hand them the keys and they give you a $20 bill. Then they sign up for the Uber taxi service and drive people for 12 hours a day with it. Then they loan the car to a friend for $20, and they also drive people around with their taxi service for 12 hours. Then they give the car back to your friend, and they drive it for 12 hours as a taxi.
How would you feel if it was your car that you lent out? That's how the landlord feels.
@Sonia Thiebeau My experience with this has been quite different than the others, so hopefully this can provide some value. I actually have a lease option on a piece of property that I do exactly this. My landlord is fully aware. The situation works out nicely because he is too busy with other projects to do STR himself, and he had the property way overpriced so it had been on the market for over a year.
I also just signed a lease on another property where I'm doing exactly what you described... I'm testing out the building with a lease to make sure the location does well before I sink in a bunch of cash.
In both situations the landlords know exactly what I'm doing. The first one I mentioned is profitable, and the second should be profitable as well. So, it's definitely doable, and it's some of the lowest hanging fruit in the real estate world IMO. However, people are starting to become more comfortable with Airbnb and doing it themselves. I've found these deals becoming harder to find in my area.
@Michael Bowie thank you, it's great to hear that it's working out well for you! It does seem hard to find landlords open to this type of venture, but I really think it can pay off for everyone involved if it's done right. Are you subletting SFH's or condo/apts?
@Sonia Thiebeau One is a multifamily and the other is a condo. One way to go about it is to find properties that are for sale and have sat on the market for a long time.... Engage with them about buying the property because you want to do STR... Since they're probably getting eager to sell it to you, they'll probably try to "sell" you and tell you how that's a great idea.. "my friend/sister/brother does STR and they do well, I think that would do well in this area..".. Then, go look at it, meet the owner, build a relationship, and leave to think about it... wait a few days or a week.. Follow up and say, "hey, I'm really interested in this house, but I'm concerned how well the location will do on the STR market. Would you be open to a lease/option? I'd like to lease for a year, then if it goes well, I'd be interested in purchasing the property in 12 months or less. Would this be something you would be interested in?"
That's basically how I got my two current lease deals.. I have the first right of refusal on both of them.. While I didn't end up purchasing the multifamily yet ( I'm into my second year on the lease), I actually purchased a house from the same owner right across the street for STR.
@Michael Bowie that’s helpful information. Thanks so much for sharing!
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