I’m under contract on a property in Central Phoenix that has a main house and 2 casitas all around a central garden. Because the property has 3 detached houses on one lot (a 2 bed/1 bath, a 1 bed/2 bath and a 1/1), I thought it would make a charming short term rental because guests can have an entire home at an affordable rate with nice shared grounds/outdoor space. I’m curious for anyone with Phoenix Airbnb experience...
1. Are there any policy or regulatory considerations for using the property in this way? From what I've read so far it seems fine as long as they are properly registered under the city's STR regulations.
2. Do you manage STRs or know of any good management companies for historic STR properties in central Phoenix?
3. Anything else? What do I not know I don’t know?
Personally, I’ve found studios and 1bds to perform the best relative to normal rentals. I cannot speak to the rest of the questions as I’m in Ohio.
Not a bad idea. My wife and I own a 4/2 home and a guesthouse for AirBnB. Agree with what @Marc Rice says above. The 1-2 bed studios perform outstanding in terms of occupancy. The one thing I would consider is the kitchen situation in each. Most of our guests enjoy cooking. Perhaps place a couple gas grills in the common areas. Outdoor dining, with cool bistro lighting. Hot tub? YOu could probably pick up a hot tub for $3k and have it paid for in your first month with all three properties. Just some thoughts.
Make sure to not only register each individual property with the city, but also apply for your TPT license for each property address. Doing so ahead of time will save you the headache of a late application.
@Reilly Carpenter I am not familiar with your market but I'm familiar with STR management companies. I wrote this to help investors with the hiring process, I hope it's helpful and good luck! https://www.biggerpockets.com/member-blogs/13688/92930-part-1-investors-expectations
Thanks @Landon Moore ! Great advice on the TPT, I definitely want to make sure I check off all the regulatory requirements ahead of time. As for setup, the beauty of this property is each house has its own kitchen already. The 1/1 casita had a tenant in it previously for $900 a month but I’m hoping with a makeover and Airbnb that number goes way up. We’ll see! Definitely love the idea of grills/lights/hot tub... I was thinking the same thing. Great minds!
Thanks @Sofia Sharkey ! I’ll check that out. Appreciate you sharing that.
I think the shared hot tub may open you up to problems. I know new pools, and probably spas, require fencing and possibly a locking cover for spas. So check out the regulations on that. Spas would also require a lot of attention for chemical adjustment and cleaning.
Hey @Reilly Carpenter ,
Looks like you have a pretty good property setup going.
One recommendation that I would make is that you should list each unit individually, but also list the entire 3 units as a single listing and charge a premium for that.
For example, if you charge, $100 per unit x, $100 per unit y, and $200 per unit z -- you can also setup the new listing that combines XYZ and charge $500-600 for that. Oftentimes, you'll find larger group bookings that pay a premium on the weekends and then you'll be able to maintain high occupancy by having each of the units rented out during the week.
Smaller properties are usually easier to fill up, but larger ones can drive a higher revenue because larger groups are willing to pay more. Plus, you can easily set it up within the Airbnb to synchronize the listing calenders - so if someone books X, then XYZ listing gets blocked for those dates and visa versa. This will prevent any overbookings.
Hope this is a little helpful!
@Boris Mordkovich awesome suggestion! I was definitely thinking about how to position it both ways: a mini compound for large groups and quaint individual spaces with shared outdoor space, so I’m glad Airbnb allows you to sync calendars on something like that. I appreciate the tip on the premium too. I was thinking the same pricing structure for both but the premium to book it all out is a great idea!
@Reilly Carpenter Check the zoning to make sure it's R-3, because it sounds like you have multiple dwellings on one parcel. You'd "probably" be fine running the casitas on Airbnb even if the zoning is only single family residential.
Hey @Ryan Swan , it is zoned single family currently and not R3. I’ve raised this with my agent and he didn’t feel it would be an issue but I’m not exactly sure how to fact check that. I’ve also wondered what the implications are for renting it long term if I decide to pivot strategies, but I don’t know how complicated rezoning to R3 would be.
If it's not R3 it's almost impossible to get it zoned multi family in a predominantly single family neighborhood. That means you wouldn't be able to have separate metering or mailing addresses, so long term rental prospects become difficult. You could continue renting the whole property as STR units because you'd be paying all of the utilities any way.
I have the exact same setup as you in the Phoenix area. DM'd you
If you need a manager to interview for part 2 let me know!
@Ryan Swan ahhh gotcha. That's kinda what I figured, but I did hear the two smaller back houses could be rented out as boarder income just like subletting rooms. But that makes sense about metering separately. I like the STR rental potential though and the property is configured well for that. We'll see... it's kind of an experiment!