Rental Property Investor · Hammond, WI · Member since 2017 · 139 posts · 217 votes
So I currently have 65 long term units that I own and I recently purchased my first property that I'll be going the STR route with.
Basically, I just bought a large (4300 square feet) cabin on Lake Superior that is essentially "split" into two different houses that are connected via a door through one of the bedrooms. One unit will sleep 8 people comfortably, and the other unit will sleep an additional 10 comfortably. I'm beginning to decide on my strategy for renters and marketing. For ease sake as well as cost I was considering making my base rate on 6 people staying, then charging additional for each person with the expectation that if they have more than 8 people they will then gain access to the 2nd half of the cabin. I was simply going to have an electronic lock on the dividing door (there are 2 separate entrances), and give them access based on # of people.
I don't plan on renting them out individually, it'll simply be either access to only the main part of the 1/2 cabin or the entire thing with the number of people. It's in a more remote part of WI directly on the lake and I'm attempting to save on cleaning costs/time/maintenance costs by going this route as well as make it more marketable to smaller groups. Anyone ever done anything like this? I was considering using my maximum number of photos on AirBnB and VRBO and then make it very clear in the description that you'll have access to the first x amount of pictures etc of the cabin if you have 8 or less people and attempting that route while still maintaining the flexibility to go up to 18 people in the house.
Any advice I'm all ears! The main cabin has all of the desirable traits if you will, views of the lake. Other than room for more sleeping there is nothing on the side of the house that would be a main selling point for a renter.
@Luke G. Lots of good feedback here. I had a riverfront house with an attached garage apartment and could be configured several different ways; I had different listings for each size (to minimize confusion regarding how much of the house a guest was getting), and made it so you could book the whole house furthest in advance, then for closer stays there was the option to book the smaller version. Like you, only the main part of the house was really desirable/riverfront, I experimented with renting the garage apartment on its own but didn't get many takers, and it always made me uncomfortable to have two groups on the property at once.
For your scenario, I'd probably create two listings: one for just the main portion of the house, and one for the entire property. The entire property I'd allow bookings a year-plus in advance. The main portion of the house would only be available perhaps six months out. Of course, calendars need to be linked so you don't get double booked. On the listing for the main house, you can do the extra charge for guests 9/10, but you can also make it clear that there is MORE HOUSE that can be included in the reservation, see your other listing or contact you for details.
Having the separate listings will help prevent confusion regarding what guests are getting when they book, and will make it easier for you (and your cleaning team) to see at a glance who's getting what. Limiting the booking window for the main house only will make the whole property more likely to get booked by those groups planning further in advance, regardless of size (if someone's willing to pay for it, who cares if it's six people in the whole house?). The only downside is your review pool gets diluted, since they will be spread across two listings instead of consolidated in one, but I think the logistical pros will outweigh the cons here.
I don't see any of this as a bad idea. I bet you will get plenty of groups that want the whole house though. @Julie McCoy has experience with separate entrances and multiple groups. She will be along soon.
First off, congrats on all you success in the long-term rental market! Just my quick 2 cents here...
Obviously we don't much about the details or amenities of your property but for me, personally, I would be splitting them into 2 separate rentals and figure out the rest...2 income producing properties with 2 separate calendars which both would cater to more popular sized rental parties seems like a potential home run.
But if that just is not in the cards, then you need to figure out first what (if/any) STR regulations come into play as you go to that size, as some areas would end up classifying that as commercial in nature and you might have other things to manage with respect to that. I'm not quite sure how the booking platforms would handle your strategy either as it's going to mess with the algorithms and search filtering I think and possibly cause you to fall lower in results.
One other thing you could consider is using it as a Corporate Rental and market to large companies that want to host company off-site events to which you would certainly garner a premium rate.
Not to be a Debbie Downer, but it can be hard to find a large group of people that would be willing to stay under the same roof together. i rent my places to refinery contractors. I tell them about my houses, how they can sleep anywhere from 3 to 8 people. They look at me and say "I work around these stupid mofo's for 12 hours a day. I'm not going to be around them for 24 hours." So I rent them a place for themself at a premium, and the stupid mofo's share a big house.
@Luke Carl, I'll wait for Julie to chime in, but it sounds like she's got experience there. Thanks again for chatting with me earlier this summer, you gave me the nudge I needed.
@Jon Crosby appreciate the reply, logistically for the exterior there's no reasonable way to split it and give each unit the privacy required outside (this also wouldn't sit well for how I'd like the property for when I use it personally as well). The main cabin has all of the desirable exterior amenities. Splitting into two official units would make zoning more of a PITA as well. I won't need a rooming house license even with that size, only a short term rental license for that county. I never thought on the corporate rental market though and think that might be a solid option as well.
@Paul Sandhu I would agree with the actual split unit idea, which is why I'd be making it 1/2 the house of the entire house.
The exterior set-up has the main part of the house opening to a screened in-porch with the big views with an attached sun-deck, it has stairs down to the large (2000 square feet) main deck area. I think giving guests access to the entire exterior, while making it still marketable to smaller groups will have the highest ROI long term. I don't need it to make me a ton of money, this was my first "fun" real estate purchase that wasn't completely based on a return. More so seeing if anyone has done this and what was the most efficient method.
I would advertise it as a X or Y Bedroom house and then explain.
Tell them it is X price for the side that sleeps 8 with option to add Y at an additional price.
I wouldn't add an extra fee per person or you will get a party with 9 or 10 and have to open up the rest of the house for just 1 or 2 extra. I would explain you will send an extra payment request for the 2nd part of the house if they agree to rent it.
Hi Luke. Why now rent out individually? You can create three listings total for this house on Airbnb. You can have a listing for each individual unit. You can then create a listing for the entire thing. You can link the calendar for the whole house to each individual unit's listing, so that when one unit books, it blocks the calendar for the entire unit so you don't end up with a double booking. Interestingly, in some markets you could charge a more than just the total cost of the two smaller units rented separately, because there is often way less competition among units that will accommodate larger groups. I actually use this same strategy for two houses I have on Airbnb that are across the street from each other. We haven't had too many people book both together, but it has increased our earnings whenever we have. And I can tell you the linked calendars work. Consider it. Good luck!
@Patricia Taveras that was another thought. I have considered making two listings, one for the full house for large groups and one for just the main portion and linking the calendars so they both block when there's a new booking.
The biggest thing if I do two different bookings is trying to make sure it's clear that they're actually different units and not have a group book the half house and think they're getting the entire thing. I'm trying to figure out the most efficient way to word this and set it up via the online platforms; if its through one listing and an explanation or through two different listings, thanks for the tip! This may just be the easiest route as then the different cleaning fees and additional guest add-ons will likely be easier to set up this route.
It would be only two listings, I can't separate anything outside with any expectation of privacy and I don't want to change the foot print of the exterior as it works well for my large family (I'll be using it some).
I see what you are saying. I think describing the space clearly would be easier in the two separate listings. When you set up your listing airbnb will prompt you to select type of space - entire house is one of those selections. I have never listed a smaller space before, but as an airbnb customer I have seen listings described as "private basement apartment with separate entrance" for example. So in the smaller listing, you can make it clear which portions of the house your guests will be able to access. This way you can also set a larger cleaning fee for the larger space. You could still add extra guest charges on either or both listing if you chose. Sounds like a cool property!
So I currently have 65 long term units that I own and I recently purchased my first property that I'll be going the STR route with.
Basically, I just bought a large (4300 square feet) cabin on Lake Superior that is essentially "split" into two different houses that are connected via a door through one of the bedrooms. One unit will sleep 8 people comfortably, and the other unit will sleep an additional 10 comfortably. I'm beginning to decide on my strategy for renters and marketing. For ease sake as well as cost I was considering making my base rate on 6 people staying, then charging additional for each person with the expectation that if they have more than 8 people they will then gain access to the 2nd half of the cabin. I was simply going to have an electronic lock on the dividing door (there are 2 separate entrances), and give them access based on # of people.
I don't plan on renting them out individually, it'll simply be either access to only the main part of the 1/2 cabin or the entire thing with the number of people. It's in a more remote part of WI directly on the lake and I'm attempting to save on cleaning costs/time/maintenance costs by going this route as well as make it more marketable to smaller groups. Anyone ever done anything like this? I was considering using my maximum number of photos on AirBnB and VRBO and then make it very clear in the description that you'll have access to the first x amount of pictures etc of the cabin if you have 8 or less people and attempting that route while still maintaining the flexibility to go up to 18 people in the house.
Any advice I'm all ears! The main cabin has all of the desirable traits if you will, views of the lake. Other than room for more sleeping there is nothing on the side of the house that would be a main selling point for a renter.
As someone who owns some large houses, the best advice I can give to you is this: be careful booking same-day turnovers where your entire huge house needs to be cleaned all in a six hour period
It takes an ARMY of cleaners to do a turnover on a large house, which becomes a real problem if some of the cleaners get sick or simply don’t show up or decide they don’t want to work for you anymore.
It’s also impossible to have a back up cleaning crew when you need a huge crew, you just have a primary and you hope that everyone shows up when you need them
Hey @Luke G., have you done a search for properties near you? What is being offered? Would you be the biggest place around? If your place is roughly similar in size (sleeping wise) then renting it as one place is the way to go. That is what people expect.
Does both sides have full amenities? Renting it 3 ways seems to be the best idea of the bunch. 3 ads will keep it full.
Personally I would never charge per person above 8 or anything like that. It sleeps what it sleeps. Our place sleeps 10, I charge the same for 4 or 10. I have had some people ask for 12 and if they are kids, then I say great! I don't charge extra for that.
My place will be the biggest within a 45 minute drive by a rather significant margin.
There really isn’t an option for 3 different scenarios, it is only is 2. The 2nd portion of the house does not have a full kitchen, it also does not have access to the second level screened in porch and there is no way to split the exterior without putting up a wall through the large deck which I’m not willing to do. The setup for the second portion of the house plays well for more people sleeping and hedging out, but not necessarily a stand alone unit. If I did two separate units privacy would be minimal and I would need a different set of licensing agreements since it would be a multi unit and not a single family short term rental.
It is the norm in this region as every other VRBO in the area charges more per person once you get over a certain point. I’m still unsure what my base rate is per cabin but the extra won’t be ridiculous but it is the region standard here. It may be the norm in your market but there’s a large difference on the wear and tear of the house, holding tank usage, electricity and maintenance if there are 10 people or 18. There’s not much difference if I just increase the rate of if I increase the rate per person with a base rate. Once again, I do appreciate the input however.
Sorry also forgot to mention most places near me are in the 4-6 range. And my main cabin area I would likely do a base rate of 6 or 8.
I’m also considering playing with the summer months after a year or two and can decide if I should be just blocking the entire cabin or if most of my reservations are for only the main area.
I hear ya @Luke G.. The per person option is pretty normal everywhere. Also charging more for holidays and the like. I buck that trend personally. I just can't stand it. I understand the reasoning, just my opinion of it.
You say holding tank. As in septic or just storage due to the proximity to the lake?
Septic is a holding tank due to proximity to the lake. I actually do have a well so no water bill but pumping for a place that size can be once a month depending on number of people.
@Luke G. Lots of good feedback here. I had a riverfront house with an attached garage apartment and could be configured several different ways; I had different listings for each size (to minimize confusion regarding how much of the house a guest was getting), and made it so you could book the whole house furthest in advance, then for closer stays there was the option to book the smaller version. Like you, only the main part of the house was really desirable/riverfront, I experimented with renting the garage apartment on its own but didn't get many takers, and it always made me uncomfortable to have two groups on the property at once.
For your scenario, I'd probably create two listings: one for just the main portion of the house, and one for the entire property. The entire property I'd allow bookings a year-plus in advance. The main portion of the house would only be available perhaps six months out. Of course, calendars need to be linked so you don't get double booked. On the listing for the main house, you can do the extra charge for guests 9/10, but you can also make it clear that there is MORE HOUSE that can be included in the reservation, see your other listing or contact you for details.
Having the separate listings will help prevent confusion regarding what guests are getting when they book, and will make it easier for you (and your cleaning team) to see at a glance who's getting what. Limiting the booking window for the main house only will make the whole property more likely to get booked by those groups planning further in advance, regardless of size (if someone's willing to pay for it, who cares if it's six people in the whole house?). The only downside is your review pool gets diluted, since they will be spread across two listings instead of consolidated in one, but I think the logistical pros will outweigh the cons here.
@Julie McCoy Thanks a bunch for your input, that's pretty much exactly what I was looking for when I started this thread. Your set-up sounds similar to mine. 2 separate listings is what I'm going to likely go with.
Sounds like an awesome place. You are right on to not rent as two units to unrelated groups since the outdoor space is unified. "Party all night and sleep til noon" doesn't mix with "Get up and enjoy the sunrise over the lake". With the size of your place compared to your competition, you have a very unique opportunity. Congrats and best wishes!
With the number of properties you manage you may have already considered... have a well contractor on board familiar with your new property ahead of time. Pumps do not last forever and vacationers used to city water may freak. LT renters in rural areas would likely be more tolerant.
My situation is very similar to yours and I wrestled with the exact same issues last December when we opened our STR. Happy to share some of my experiences hope it can help.
We bought and remodeled a 4400 sqft vacation property in the Colorado Rockies. Sleeps 16 in 10 beds, 5 Bedroom, 4 Bath, 2 kitchens. I was able to divide the property to create two separate units with the intent to divide the listings as well as offer the whole house to larger groups.The larger of the two units was initially going to rent for between $290-$425 seasonally adjusted and the smaller one for $125-$250 ish. However, with winter coming on fast and no good solution to efficiently clear the snow to the entrance of the smaller unit we decided to rent the entire house as one large property just for the winter/spring season.
Our decision to rent as a single large home was helped by the fact that splitting the units required multiple listing and other creative ways to juggle calender's for optimization which was more than I wanted to deal with at that time. We also briefly considered charging more for 'extra' guests but quickly changed our minds. I figured the single large house experiment was worth a shot during the winter to gauge demand with a plan to adjust fire in the summer for the two unit option.
I can tell you that we don't regret our decision for the single large option one bit. And fully intend to keep it as one large unit. Demand has been far better than we expected and getting large groups is not a problem at all. We have had to raise rates several times to find the sweet spot. My highest rate so far has been $950 a night for Christmas/new years 2020. 3 weeks of back to back bookings at my highest rates were booked 11 months out. Which tells me I left money on the table this year. We have seen similar demand for the summer/fall crowd as bookings were coming much earlier and more regularly than we expected. Some of our early summer guests got a steal as my pricing model was less than optimal. let me share some observations and thoughts, pros and cons, do's and don'ts on the larger property model for you to consider.
1: Large groups for STVR is a very real and very healthy market.
Anyone telling you different probably doesn't have a large STVR worth staying in. Or have not played in this niche at all. Most folks simply assume there simply isn't a large enough demand. I had the same intuitions; I was wrong. Also keep in mind your competition. What competition? large groups have limited choices. 3BDE 2BATH STRs are a dime a dozen and once you split your units you will be competing with all of them. As a single large unit your closest competition is 45 mins away! You can demand a premium with the larger property. With the smaller units your competition is going to undercut you daily and you will have to be agile to keep up and try to find ways to differentiate yourself.
2: Economies of scale - One large unit will offer you economies of scales you can capitalize on. Consider one set of processes and expenses to manage instead of multiple. Also consider your economies of scale for maintenance and cleaning. Multiple unit cleanings a week or one? multiple maintenance trips a week or just one?
Example: Set aside property appreciation math for this example but consider potential revenue and expenses to my hypothetical question. As an LTR landlord, would you prefer 1 roof with 6 doors paying $200 each or 6 roofs, each with 1 door paying $200 each? obviously 6 roofs have a lot more expenses to consider while your revenue stays the same. The same can be said for the single large STR or two smaller ones.
3: Economies of scale also work out for your guests. Large groups love the fact that they get a great deal when they split costs. It's a true win-win. Smaller STRs and hotels cannot compete with the value a larger STR can offer. I caution you and suggest you reconsider the additional rate for additional guests as @John Underwood also suggested. The economy of scale for your guests will not be as appealing and probably feels like nickle and dime'ing to the folks checking out your property online. The extra charge will have folks trying to figure out how to pull-one-over on you and they will probably feel uneasy about their ruse the whole time they are supposed to be enjoying your home. I can think of a half-dozen other reasons I would not go down the extra charge route. For me its simply not worth the extra agro.
4:Cleaning and maintenance: No doubt you will need the right team. Easier said than done. As @Mark Miles suggested a big house is a lot of work especially if you plan on doing same day check ins. We did same day check ins during the winter, pre-COVID and it was hard but manageable, the extra revenue more than justified the extra expense. Post COVID lock-down we are not doing same day check in; we have a 24hr gap for new guests. The lost revenue stings but so far its working out.
5:Trash: there is a lot of it. 18 folks + 5 days equals a well placed dumpster or a stinking nightmare. Have a good plan to handle trash on a quasi-commercial scale.
6: Alcohol + large groups = Party. Any time you have a lot of folks and alcohol combined you can bet on shenanigans. Check out the threads on BP that cover the topic of controlling parties potentially heading your way. Their are mitigation tactics including minimum age for bookings, screening for .edu addresses, noise detection devices etc. Good commercial STR specific insurance is a must have. Proper Insurance is the industry go-to I'm not sure of the others in this space. I use Proper and they have me covered for Alcohol related liability.
7: Washing machine, dryer and dish washer: Drying towels and linens will cause a bottle neck in the cleaning process. As large as your property is two dryers is highly recommended if not critical. One will not be enough especially on one day turn arounds. One large washing machine should suffice but a second cant hurt. Dish washer, consider two because your standard dishwashers are barely capable of handling a family of four let alone 3 meals a day for 18 guests.
8: I recommend you have fun activities for your guests to do in the house. With a large property you will have multi generation families and even two or three different families at any one time. Ages ranging all over the spectrum. Don't forget the Baby and don't forget grandma. I keep a stocked book shelf, lots of board games and cards, floose ball table, corn whole, gold pans, fishing poles, binoculars, game console, dvds etc. No one wants to be in a giant house without the fun stuff. Stay away from dart boards unless you have a good method to prevent darts from creating excessive damage. Guests loved my traditional dart board and was a huge hit but unfortunately some guest turned into a missile range and blew up my wall. Sadly, I it took it down yesterday.
These lessons learned are my immediate thoughts on the fly while typing.I have more info to share so let me know if you have specific questions.
Final thought, don't dismiss the large single house option. The revenue you can generate may pleasantly outperform the combination of the smaller units and your economies of scale will definitely lower your expenses and reduce workload. You already have a significant advantage on your competition and the opportunities to differentiate are much greater with a larger home.
Thank you to everyone who replied to this thread, there was some interest in seeing the property once it was complete. I've attached my property, it's still a bit of a work in progress and I need to switch out a few of the pictures, but the process at least has been started. Let me know what you guys think!
Something I picked up from somewhere is to git rid of any cord you can for staging photos. It might not be realistic, but it gets rid of visual clutter.
Hey @Luke G. Thanks for the look. It's a pretty nice looking place! I would recommend a couple of things.
One is to go in an finish captions on all the pics. It is nice to see what we are looking at. Another would be to put them in a more logical order. That is a personal thing. Like all the main floor living areas, then main floor bedrooms/bathrooms, then the staircase, then the downstairs main living etc etc.
Do you have a beach? Steps down the steep area? You should get a few pics of the beach if you have one. I would also plan to take more pics of the outside once there is foliage.
I see the calendar is filling up! The blocked areas after Sept, do you have them blocked or ?