I have a potential tenant who wants to airbnb the empty rooms in my rental. I dont have any experience with this and was wondering how it would work. I'm not necessarily opposed to the idea, but want to make sure im not getting screwed. Do i raise the rent or ask for a percentage of stays?He said he would have a cleaning service after each stay and would cover minor maintenance costs. Any input for or against would be helpful. Thanks.
Ahhh arbitrage from the other side! I would ask for a percentage. I think I would also draw up a contract that covers all the details and possibilities that could come up.
Could be a money maker.
@Bobby E. 'Potential' tenant as in they are going to live there also or they want to Airbnb the whole place? That makes me think they are trying to pretend they are actually going to live there but are going to end up renting the whole place out under your nose.
Unless you are going to get a sizable cut on this and willing to take on all the potential liabilities associated with running an STR and having strangers in and out of your property, including being responsible for any permitting that might be required, not sure why you would do it.
If you are in a desirable area you might just want to think about converting the whole place to an Airbnb and run it yourself. Just hate for you to get in a pinch legally at some point, as running an STR is a lot different than a standard rental.
Best of luck!
Do the legwork of getting a quote for the right insurance (Proper or Foremost or highly rated STR insurance co's). You need it anyway, this type is different. Work that extra cost into your rent charged and/or percentage of income. You will get more income than the traditional type of LTR, if it's well run and you are in an area that warrants. (If tenant thinks so, it might be a clue that it is.) Validate the tenant's history - has she/he hosted before? Look at their reviews, etc.
Tenants with STR have a vested interesest in maintaining your property.
You could host this yourself but if you didn't already think of it, you're probably not of that mindset to take on the work. But maybe you are and you just never thought of doing it before. And it is work, more so than a LTR. It's not hard but you have to want to do it.
There are those here who would not allow it and those that would. Ultimately, you need to learn the risks and rewards and decide what is right for you.
Rent plus a percentage of the profits so that you have a guaranteed minimum amount.
If the prospective tenant has a good track record for doing this Airbnb thing you speak of, go forth with this venture.
If he has no experience, it is a trainwreck waiting to happen, and I have 23 STRs in this town. 82 beds, 37 bathrooms. My town is a nice place to invest in, but you wouldn't want to live here.
@Bobby E. I had someone want to do this w one of my rental properties in California. AND he wanted me to drop the price per month as well. LOL.
The final straw was when he told me he would only be there part time himself AND he had never done it previously.
He was also very 'underfunded' as well. He told me he couldn't go to the MAX or beyond for security deposits. ALL are red flags. More than 1 should be a NO. 2 or more is 'hell no'.
Like @Paul Sandhu said, track record, MAYBE.
My .02. Hard NO. ;-)
BTW, Paul, where is a nice place to invest but not live? I'm curious. LOL.
Awesome input, thanks! I wasn't thinking about it until it was offered. I guess there is something for him being upfront about it and not doing under the table which i know happens. I plan on setting up a face to face interview that will hopefully give me enough info to make thd right call
@Alan Grobmeier Coffeyville Kansas. Last year (according to Google) Coffeyville was the worst town in Kansas to live in. This year we are 3rd from the bottom. 2 weeks ago there was a report on the highest and lowest mortgage payments in the country. Coffeyville had the lowest, $205. The last 4 houses I bought were 3BRs with CH/A. They were $9500 each and needed less than $1000 worth of repairs or updates. Last year we had 5 homicides, on a per capita ranking we would be between Chicago and Baltimore.
Drive down any main street and you'll see people spaced out on meth on foot or on a bicycle. I don't bat an eye when I see someone open carrying, it's normal. There's more, but you get the idea.
@Paul Sandhu , I DEFINITELY won't be charging out to Coffeyville to copy you. LOL.
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