Long Term AirBNB Rental
New to Real Estate · Pittsburgh · Member since 2019 · 10 posts · 2 votes
Long Term AirBNB Rental
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Real Estate Agent · Hartford, CT · Member since 2019 · 12 posts · 14 votes
6yHey @Jennifer Maiolo - I am an Airbnb host in CT so things are a bit different than your market I'm sure but I have had 2 instances this past year where the guests each wanted to rent for ~5 months through Airbnb. The first guests were baseball players coming into town for the season to play for a minor league team and the second group was a set of interns that would just be in the area for a semester. I make sure they have reviews on the system and try to hop on the phone or a Skype chat first to show them the place but also get a good sense of if this will be a good relationship. I haven't taken it off of Airbnb yet and don't have plans to but I do plan to speak with a lawyer and draw up a separate supplemental contract as my Airbnb is growing rapidly and I feel like the extra level of protection couldn't hurt.
I've found it a fantastic way to find great tenants who are not in a position to sign a traditional 1 yr lease. My baseball players ended up leaving a week early and it was an easy adjustment that immediately allowed me to get guests in to fill the gaps. They're referring another round of players this year, too! Overall, a win-win for all parties involved so far. The Airbnb protections have been great for me so far as well and give me more peace of mind than what I have with my traditional leased tenants.
28 Replies
- 6yLuke CarlPro MemberRental Property Investor · Tennessee Florida · Member since 2016 · 4k+ posts · 5k+ votes
You need a lease for anything 30 days or over. If this inquiry were happening in my market it would be a scam. I would pass. Could be totally normal in your market. If you do go down this road make them sign a lease. Mentioning to word lease to this inquiry will likely mean you'll never hear from them again. Which is a good thing. Again, market specific. Average stay around here is 3 days.
- Real Estate Agent · Sevierville, TN · Member since 2015 · 1k+ posts · 1k+ votes6y
@Jennifer Maiolo I agree with Lucas - consider if this is something likely to occur in your market. Also is it at all logical for them to pay your nightly rate for 3-6 months? What business are they coming to town for? Does the amount of money they'll spend on rent seem reasonable for whatever their profession is? Ask them some questions and tell them you'd require a lease, and you'd probably want a separate deposit as well (AirBNB's deposit system is a joke). If they're legit, they shouldn't mind these things.
- Rental Property Investor · La Place, LA · Member since 2014 · 109 posts · 82 votes6y
I rent to traveling workers all the time. If this is something popular in your area you may have found a nice little niche. I do weekly rates including utilities and stay busy throughout the year. I haven't used airbnb to get workers so not sure I can help you there. Let me know if you have any questions.
- Rental Property Investor · Wrentham, MA · Member since 2019 · 137 posts · 104 votes6y
Please search BP. There is a post from a few months ago where someone wanted a long term AirBnB. The customer pays the first 30 days and stays for months without paying. Make sure you understand your local laws regarding what constitutes legal residency.
- Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes6y
@John Lewis are both in a similar situation with similar tenants. When someone tells me they are going to be here a long time and are trying to make music to my ears, my bull Schmidt detector starts going off.
They can buy a camper for the amount of rent they would be paying you for 6 months. And after 6 months, they would own the camper and be able to take it to their next job. Unless your house is in Hawaii.
- New to Real Estate · Pittsburgh · Member since 2019 · 10 posts · 2 votes6y
Thank you all for this great advice. I should have added that our county houses the Shell cracker plant, which has been bringing droves of people to the area who need short term housing. My thought is that for the next year or two, this single family home may be best served as a short to long term rental instead of AirBNB until this large project is over. We are going to have this couple sign a month to month lease agreement. The only question I have is whether to totally leave the AirBNB platform for this particular rental agreement and do this separately or stay with AirBNB in terms of collecting the rent and for the 'additional' AirBNB protection (which I do not have experience with yet) and for hopefully a good review at the end.
Again, thank you all for taking the time to reply to this thread!
- Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes6y
I'd leave the Airbnb platform and conduct every transaction face to face. That's how I've done approximately 1498 short term renters. One guy I never met, he would text me and say the money is in the microwave. He is my Kaiser Sose. Some other tenants had worked with the guy. They described him as a white guy with dreadlocks from south Louisiana. Another guy, his employer would call me and give me a credit card number to run. The other 1498 people I met in person at the property.
- Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes6y
I just read about the Shell Cracker Plant. Those people working it should be receiving a per diem. Probably $100/day. I charge what a local motel would charge. Here a motel room with 2 beds is $400/week. I charge $600/week for a 3 bedroom house with a kitchen and washer/dryer. 4 bedrooms are $800. Bigger houses are (number of beds) x $200. Find out how much local motels are and base your decision upon that. That's what potential tenants will do, base it upon the price of a motel.
- 6yJeremy TaggartBusiness MemberReal Estate Agent · Pittsburgh, PA · Member since 2014 · 850 posts · 646 votes
@Jennifer Maiolo I'd probably cut out airbnb as the middle man and deal directly with them. What we've been doing for the cracker plant workers is just doing month to month and really pushing the envelope on the rent. Basically just charging a premium for the ability to be month to month since there's still a short supply of short term lease rentals. Basically they compare it with what they're paying at the hotels so they're still saving money even at the higher rent. My one client has even been renting out bigger single family homes by the room and getting even higher rent. Along with that though you'll have to pay someone to come in and clean the common areas and is more hands on, but the highest income potential.
DHRE- The Jeremy Taggart Team590 Reviews - New to Real Estate · Pittsburgh · Member since 2019 · 10 posts · 2 votes6y
@Paul Sandhu Thank you so much - this is very helpful!!
- New to Real Estate · Pittsburgh · Member since 2019 · 10 posts · 2 votes6y
@Jeremy Taggart Thank you so much. This makes so much sense. I definitely think that is the way to go. For your short term rentals, do you go through all of the same avenues with screening tenants and the paperwork (list of past landlords, credit score, etc) as well as having them sign a lease? As you can tell I am very new to this. Thanks so much in advance!
- Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes6y
Here is a history lesson for you all. World War 2, the allies were sending aerial bombing missions over Germany. We were trying to bomb their factories that produced war machinery. Our bombers kept getting shot down by German fighter planes.
So we sent our bombers at a higher altitude where the air is thinner. The German fighters would be less maneuverable and we could possibly shoot them down. The Germans built an engine for their planes that was supercharged. It increased the compression ratio. In other words, the engine was more powerful. They continued to shoot down our bombers.
Some engineers from the Rolls Royce airworks factory developed a double supercharged engine for our fighter planes that would fly as escorts to the bombers. The plane was called the P51 Mustang. Our old fighters had 4 .30 cal machine guns, so did the German planes. The P51 was equipped with 6 .50 cals. So not only was it more powerful than the German fighters, it also had more firepower.
The power came at a cost. The P51 needed a very high octane fuel. The fuel was only able to be produced in batches at a high cost. Fuel was the limiting factor.
Some petrochemical engineers in LaPorte Texas developed a continuous flow method for producing the fuel. The center of this process was a refining unit called THE FLUID CATALYTIC HYDROCARBON CRACKER. Guys in my refinery call it the Cat Unit. It produced mass quantities of the fuel at a low cost.
The fuel allowed our fighters to shoot down the German fighters and let our bombers drop their bombs on the German war machine. It eventually allowed us to invade and defeat Germany.
The Cat Unit helped us win World War 2.
- Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes6y
Originally posted by @Jennifer Maiolo:
For your short term rentals, do you go through all of the same avenues with screening tenants and the paperwork (list of past landlords, credit score, etc) as well as having them sign a lease? As you can tell I am very new to this. Thanks so much in advance!
No lease. No background check. No deposit. Just pay the rent in advance. I give them a drug screen first, but that is another story.
- 6yJeremy TaggartBusiness MemberReal Estate Agent · Pittsburgh, PA · Member since 2014 · 850 posts · 646 votes
@Jennifer Maiolo Yupp same process. Screen them the same and have them pay for the credit/background. Call references, verify income, collect a security deposit, etc. Then just change the lease to the shorter term.
DHRE- The Jeremy Taggart Team590 Reviews - Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes6y
Originally posted by @Jeremy Taggart:
@Jennifer Maiolo Yupp same process. Screen them the same and have them pay for the credit/background. Call references, verify income, collect a security deposit, etc. Then just change the lease to the shorter term.
You are going to turn prospective tenants away. I've rented to 1500 refinery contractors in the last 8 years. The first 2 rentals I had a written agreement and deposit. I realized that a lease isn't worth the paper it's printed on, and if you charge some sort of deposit you are going to earn every penny of it. And earning the deposit is not worth your time. I'm bringing in $600-$800 a week on a house that costs $10,000. All this applies to renting places to contractors. No lease, no deposit, no references, no background check. Renting to the general public, that stuff would be normal.
- Hatfield, PA · Member since 2012 · 1k+ posts · 629 votes6y
"Screen them the same and have them pay for the credit/background. Call references, verify income, collect a security deposit, etc. Then just change the lease to the shorter term."
This is what you do if you want to be empty in many markets
- Real Estate Agent · Hartford, CT · Member since 2019 · 12 posts · 14 votes6y
Hey @Jennifer Maiolo - I am an Airbnb host in CT so things are a bit different than your market I'm sure but I have had 2 instances this past year where the guests each wanted to rent for ~5 months through Airbnb. The first guests were baseball players coming into town for the season to play for a minor league team and the second group was a set of interns that would just be in the area for a semester. I make sure they have reviews on the system and try to hop on the phone or a Skype chat first to show them the place but also get a good sense of if this will be a good relationship. I haven't taken it off of Airbnb yet and don't have plans to but I do plan to speak with a lawyer and draw up a separate supplemental contract as my Airbnb is growing rapidly and I feel like the extra level of protection couldn't hurt.
I've found it a fantastic way to find great tenants who are not in a position to sign a traditional 1 yr lease. My baseball players ended up leaving a week early and it was an easy adjustment that immediately allowed me to get guests in to fill the gaps. They're referring another round of players this year, too! Overall, a win-win for all parties involved so far. The Airbnb protections have been great for me so far as well and give me more peace of mind than what I have with my traditional leased tenants.
- Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes6y
Originally posted by @Monica Jorge:
Hey @Jennifer Maiolo -My baseball players ended up leaving a week early and it was an easy adjustment that immediately allowed me to get guests in to fill the gaps. They're referring another round of players this year, too!
That sounds like my very first tenants in my first STR. They were 4 non-English speaking guys working at the refinery. They paid their rent on time every week for about 2 months. I knock on the door, a hand comes out with 8 $100 bills. One day they called me and said their job was done and they were leaving. I had a lease and deposit when I first rented to them.
Within 30 minutes, 4 of their friends called me and wanted to rent the house. I didn't mess with a lease or deposit. I just knocked on the door and a hand would come out with 8 $100 bills, like before. They stayed 2 months and moved out. Within 30 minutes 3 of their friends called me and wanted to rent the place. Same story, I knock on the door each week but only 6 $100 bills came out. This is with a $9500 house. No lease or deposit with the 3rd group. When they don't speak English and reside in Mexico and travel for work, I realized that trying to enforce a lease or track someone down is fruitless. Just go there each week and collect the rent, that's all.
- Rental Property Investor · Austin, TX · Member since 2018 · 40 posts · 17 votes6y
Sounds like you've already gotten sound advice and have a plan. My only additional advice would be to consider what demand is in the area outside of the plant/those workers. If you have a lot of tourist for example, you may not want to market your house towards plant workers because you wouldn't want your house booked for 3-6 months by 1 person. I was thinking about this for my STVR in Phx b/c there are a lot of 1-3 month traveling nurses, but I make more money with higher turnover, so I don't offer a large monthly discount and limit the house to under 30 day rentals.
- New to Real Estate · Pittsburgh · Member since 2019 · 10 posts · 2 votes6y
@Erik Applegate, @Monica Jorge thank you both for such great advice and input. I truly appreciate it!
- 6yCliff H.Pro MemberRental Property Investor · Nashua, NH · Member since 2014 · 587 posts · 477 votes
@Jennifer Maiolo sounds like you’re OK in this situation if you can secure a separate lease, but I would caution against depending on a limited platform like AirBnB for future long term rental situations like this for a few reasons.
In fact, your question speaks to a broader trend we are seeing emerge in the real estate sector of using AirBnB or other tools that originated in the short term rental sector for the purpose of long term rentals. As both a short and long term rental owner I’ll just add a few words of caution here...
AirBnB and other vacation rental sites like HomeAway are great for the purpose they originated: short term rentals, but they offer minimal protection for the concerns of many owners needing to secure their properties for longer lease terms.
As a traditional property manager I’m far more interested in ensuring I pull a full criminal background check, speak with a potential tenant’s present and prior landlord, confirm consistent employment/income sources for > 6 months, and ensure a potential tenant has a track record of paying other bills they have agreed to in writing like credit cards, car loans, and others.
On the contrary, at best AirBnB/HomeAway/others give me the following info on guest/tenant:
- a blurry selfie (that could be their dog)
- confirmation of a non-specific government ID
- confirmation of an email address I can’t see
- current city/state of residence
- list of reviews by individuals running a different AirBnB (that I have no way of confirming is not the guest’s best friend)
- Property insurance secured by (and in the interest of) someone who is not me
While I’m OK with taking a gamble on unknown guests using my property for short term stays, stays of longer than 1 month generally involve:
- Someone looking to move significant belongings in with them (that I cannot legally remove in most states)
- Moving in for a period of time they’re generally unable to pay for entirely upfront
- Tenants receiving access only after a legally-executed lease, criminal, background, credit, and income check that’s par for the course in a professional, term stay arrangement
Even beyond the blatant lack of risk mitigation tactics common in long term lease agreements, the fact remains that many STR platforms are also skimming 10-20% of gross revenue off the top of owners' profits for little beyond the initial SEO and payment processing. While that's generally deemed acceptable as a cost of doing business in a higher margin vacation rental business, it remains roughly 2x the cost for professional property managers doing far more comprehensive and hands-on work like screening tenants, physically maintaining properties, and generally ensuring owners continue to receive payment on-time and over time.
Again, none of this is to take away anything from folks who have found a niche, local industry, or workplace sector (I’ve heard of many folks supporting folks like traveling nurses or airline employees). Rather it is to draw a distinction between the expectations we have in long term rental versus short term, that are often taken for granted or intentionally glossed-over by more transactional sites and services like AirBnB and others.
- San Jose, CA · Member since 2015 · 4k+ posts · 3k+ votes6y
@Jennifer Maiolo I had a few thoughts while reading this thread. My background is managing long-term rentals, although I did do a few "short-term" rentals of "just" a few months over a summer for students coming to do an internship. I'm learning about AirBnB for my own possible investments here.
But, when you said there is a big demand for housing for these contractors, my thought was that there is no need for you to worry about losing your ability to rent to some of them simply because you expect them to pass your screening - credit or criminal checks, etc. If they don't want to have to provide this, they can go to a motel. There will be plenty of them willing to provide you with what you want in order to get what you can offer that a motel can't.
I also thought about how nice and clean and pristine your newly furnished AirBnB rental probably is and wondered if you really want a bunch of contractors in it for several months? Not saying all contractors aren't immune to putting dirty boots up on your pretty ottomans...just sayin' (I was married to a logger in a former life - don't get me started about chewing tobacco...). Plus, with an AirBnB guest who doesn't stay very long, your unit will get cleaned more often. Imagine what a mess your unit could be in after several months of contractors in it away from their wives. And what if they smoke in there for several months?
Also, as mentioned, laws change when a short-term guest becomes a tenant under the laws of your city/state and that usually happens once they're there over 30 days. They get tenant rights and you have landlord responsibilities.
I think you also have to be someone with pretty thick skin to deal with longer-term tenants. You need to be okay with setting boundaries and giving consequences - as in kicking them out, charging late fees, saying no when they ask if they can pay part of the security deposit now and part later or if you will take less or let their dog stay. You have to be really careful about discrimination. It's all stuff you can learn, for sure, but you'll really need to do a crash course on your state's landlord-tenant laws if you want to do this right away. It's really a completely different type of landlording or property management, which is another skill set to learn - and why I'm here learning about STR. I've been watching videos and listening to podcasts and reading a ton and looking at AirBnB listings - and I feel like I'm just in my first week of a four year degree program. I am really experienced and knowledgeable about managing long-term apartment units, but it's a totally different beast from STRs.
One last thing to mention is that if you have a contractor who moves out and goes to another state, you're going to have a really hard time collecting any money from them if they trash your place. You'll have to find them to have them served. If you are able to do that, you can probably get a judgment, but then you have to figure out how to collect from them. And if they travel all over the place, it might be hard to even garnish their wages.
Not to say an AirBnB guest also could damage your place or be hard to collect from, but they'd normally only have a few days to do any damage. A long term tenant (even just a few months) who doesn't tell you about a running or leaking toilet can cost you a ton of money in water bills, let alone rotten floors that may need to be completely ripped up.
Which brings up another point - are you going to rent it with all utilities included? You might want to put a timer on the thermostat that turns it up and down depending on time of day or charge them over and above a certain amount of usage. When utilities are included, tenants can be really lax about their usage.
I highly suggest just writing up a month to month contract, in case you decide you want out. If they balk because they're afraid you'll raise the rent, put in the M2M contract that you won't raise the rent for 3 months (or whatever), as long as there aren't any problems.
At minimum, run their credit, etc., through a service for landlords and collect a deposit. I used to copy applicants' IDs. Legally, I wasn't supposed to, but if they balk you know something's wrong and I wanted a photo if I ever needed it. Plus, it will give you a former address. I also required application fees to be paid with a personal check and copied that, too. More good info on the check with maybe another address and maybe a spouse's name and it shows they can get a bank account and are the type to have one. Oh, and say no to paying all up front - could establish a longer-term contract, or all cash - you only want people renting from you who are the type to have a bank account.
Anyway, if I scared you...well, maybe that's good haha. But, it's not to be mean. It's to help you not get burned. I'm actually loving the idea of learning the STR business because I think it would be better than dealing with long term tenants. I think it would be easier to put up with someone being a brat for a short stay rather than a never ending saga. :-)
- Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes6y
Here is my condensed guide for doing STRs to refinery contractors:
Avoid "Psychotic Mutts", they are scaffold builders and painters. They have problems, you'll have problems.
You can rent to "Psychotics" and to "Mutts". They are welders and pipefitters. They have problems, you need to keep them in check or else you'll have problems too.
The best tenants are boilermakers, inspectors, electricians, engineers, superintendants, project managers and the like. They don't have many problems, and you won't either. The down side is that they are "White Hats" (except for boilermakers).
A "White Hat" generally avoids sharing living quarters with anyone else, and will pay a premium to do so. I've had white hats pay up to $600/week for a place to themselves. The guy even remodeled the bathroom (I bought the supplies, he did the labor).
- Investor · The Sea Ranch, CA · Member since 2014 · 18 posts · 14 votes6y
I agree completely with Sue K. above. The scam mentioned above occurred in 2014 by a short term renter in Palm Springs who would go house to house overstaying their short term booking until evicted by the cops (https://abcnews.go.com/US/airbnb-guest-staying-apartment-months-rent-free/story?id=24665707).
As for listing suggestions- contact the HR department of the Shell Cracker Plant to advise them of your housing options. Then list with OTAs that focus on Traveling Nurses and Corporate Housing Services for Business Travel. My husband's business would put us up in an Extended Stay Hotel- so check out the local pricing (including any corporate discounts) and price accordingly.
- Specialist · Denver, CO · Member since 2018 · 40 posts · 35 votes6yTraditionally Monthly Residential Lodging for business travelers has been called - Corporate Housing - estimated at $10 billion in annual rentals in the US (according to the last SKIFT conference). According to CHPA / The Corporate Housing Providers Association there are around 75,000 of these rental properties with an average stay between 84 and 88 days. I appreciate sustainable and residual income, so I appreciate that with the business traveler I can develop a client relationship with the company who will rent from me on a regular basis. This way I am not just having to react when my property is vacant. I can be proactive and build relationships.
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