Anyone ever used Sonders?

Question

Hey everyone,

I was mostly considering doing standard renting out of my duplex, but I just caught wind of a third party that leases out your house in a short term rental basis. My realtor buddy said his clients make bank doing it. Is anyone familiar with “Sonders”? I have a nice property in a desirable area.

Thanks!

Julie McCoy · Answer

It looks like basically a corporate-level entity that wants to arbitrage your apartment.  That is, they rent it, then sublease it out AirBNB-style.  I've seen a few iterations of this format, but I don't have any first-hand experience with any of them.

If you don't mind the idea of a revolving door of guests through your duplex (which does not have to be a bad thing; people have different feelings about it) then it could be worth looking into.  There's a zillion threads on this forum about arbitrage - read through some and you'll get a decent idea of what it is, though most of those threads are written from the lessee's point of view.

There are two main things I'd caution you about: insurance and regulations.  Your standard landlord policy is not going to cover commercial activity, which short-term rentals are categorized as, so you'll want to make sure this company is paying for insurance that has you named on the policy that will cover both their commercial activity and everything your landlord policy typically covers.  And make sure short-term rentals are permitted in your neighborhood - if they're not, you could get fined.

If you decide to move forward with it, I'd be really interested in learning how it works out for you.  Good luck as you make your decision!

Aiden Harris · Answer

@Alex M. Thanks for your reply, I will reach out to you after I think about it a bit

John Underwood · Answer

@Aiden Harris If your realtors clients are making bank then why can't you do it yourself on VRBO or Airbnb and make more bank?

Vijay Chatterjee · Answer

Sonder will master lease your units and then list it while they enjoy the upside and manage the seasonality income fluctuations.

Sonder has a large presence in many markets and we have been competing with them for our deals.

Steady guaranteed long-term market rate rents but no upside potential.

Ken Latchers · Answer

Rented.com is probably where you should start.

Supposedly match people like you with property managers who make offers.

I tried them on a long term property I have, but it was not a good area for vac rentals

Alex M. · Answer

@Aiden Harris

If you have a truly excellent property, you want to get into their shoes to see what it's worth to them before negotiating away a great deal at a lower return than you could get.  Myself along with many others in this forum are short-term real estate investors.  I also run a property management company- similar to Sonder- where I help landlords earn more money from their rentals and take the headache out of managing the guest part.  Sonder's model is more to take Master Leases on larger buildings; Im not sure if they are doing individual units, but likely if its a good property they will.  If you'd like to chat more, feel free to private message me.  Perhaps a smaller operator like me could get you a better return than a large, less personal company.  Best of luck!

Jon Crosby · Answer

@Aiden Harris  I hadn't heard of Sonders and knew very little about this particular large-scale lease arbitrage model.  Although there are a million guru's out trying to do the STR lease arbitrage on small scale these are definitely more hotel like sized VC backed enterprises doing some interesting stuff actually!

I don't really have an opinion on it other than I personally buy STR's so I can have the flexibility to enjoy them whenever I want, and if I were not to use them as such I would simply make them a standard rental as it's a much more simple business model.

Here is an interesting article however on that company and it's competitors if you want to check it out.

https://skift.com/2019/03/18/a-closer-look-at-sonders-tech-focused-bet-on-next-gen-rentals/

Cheers!

Aiden Harris · Answer

@John Underwood I guess it’s more of a time thing, as I already have a full time job. I’m not keen on creating a second job greater than being a landlord. As far as I understand, this company handles the nonsense for you, furnished the place (?), takes care of damages, and cuts you a check. If it’s anything over market rent & the effort level minimizes, I’m sort of interested. Which is why I’m asking the forum, after reaching out to the company of course, if they have any experience.

It ALMOST sounds too good to be true.

Anyone ever used Sonders?

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