Short Term Rental Host as a Company or Individual
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Tyler GibsonBusiness Member
Real Estate Agent · Orlando, FL · Member since 2017 · 1k+ posts · 2k+ votes@Jon H. You should do some branding. Give your units unique names like "Magical Moments" Or something fun that can be tied to something about the properties. It is true that you will likely show as the owner of the property on the big booking sites but you should also try to have your own website as well as social media channels. The goal would be to be able to turn visitors into repeat business and book them outside of AirBnB and VRBO so that you don't have to give a cut to the booking sites. But to be able to do that you will want to brand yourself and your units and Market, Market, Market.
9 Replies
- Real Estate Investor · Windermere, FL · Member since 2013 · 16 posts · 11 votes5y
From a brand stand point, it may not matter since on HomeAway you will probably use your name as the owner. From an asset protection standpoint, it does matter. I have placed my rentals in an LLC and placed enough insurance on them to cover the total cost of the asset in order to protect myself against losing the rentals to a lawsuit. This should cover you provided you are not negligent. Please note that I am not a lawyer and thus cannot give legal advice. I am a broker though.
That being said, a good friend of mine who is a lawyer keeps his rentals in his name and just makes sure he has enough insurance to cover any lawsuits.
Either way you do it, make sure the insurance you have in place (property and umbrella) is sufficient to cover your net worth.
I would also not recommend blending your assets in a company with your sister. It complicates your life for no reason. Let her open her own LLC and you open your own.
- 5yTyler GibsonBusiness MemberReal Estate Agent · Orlando, FL · Member since 2017 · 1k+ posts · 2k+ votes
@Jon H. You should do some branding. Give your units unique names like "Magical Moments" Or something fun that can be tied to something about the properties. It is true that you will likely show as the owner of the property on the big booking sites but you should also try to have your own website as well as social media channels. The goal would be to be able to turn visitors into repeat business and book them outside of AirBnB and VRBO so that you don't have to give a cut to the booking sites. But to be able to do that you will want to brand yourself and your units and Market, Market, Market.
- 5yJon H.Miami · Member since 2020 · 46 posts · 17 votesOP
Originally posted by @James Fitzgibbon:
From a brand stand point, it may not matter since on HomeAway you will probably use your name as the owner. From an asset protection standpoint, it does matter. I have placed my rentals in an LLC and placed enough insurance on them to cover the total cost of the asset in order to protect myself against losing the rentals to a lawsuit. This should cover you provided you are not negligent. Please note that I am not a lawyer and thus cannot give legal advice. I am a broker though.
That being said, a good friend of mine who is a lawyer keeps his rentals in his name and just makes sure he has enough insurance to cover any lawsuits.
Either way you do it, make sure the insurance you have in place (property and umbrella) is sufficient to cover your net worth.
I would also not recommend blending your assets in a company with your sister. It complicates your life for no reason. Let her open her own LLC and you open your own.
Thanks for the input, James. I should've clarified that my question was more from a marketing stand point rather than a legal entity setup. I agree that separate LLC's are the way to go.
I wouldn't have any ownership in my sister's property but I was considering a joint "Branding" that could benefit us both.
- Investor · Ontario · Member since 2015 · 486 posts · 250 votes5y
Hi @Jon H. I have a few thoughts here. If you are buying in a LLC it would be easier to sell them in the future as a branded package. They would look more like a connected business operation opposed to owning random STR's in your own name in various locations.
This could also improve your rebooking rate. Suppose a guest really likes staying at one of your locations but wants a slightly different location for the next year. It is easy for them to rent from the same company etc. This aslo allows you to have a website with all of your own STR's tied together under one business name. Easy to retarget clients with marketing etc.
You are looking to expand and STR's have high cash flow. That being said, private money can fit well here. From a financing perspective many private money lenders will only lend to business entities and not to an individual directly. This is good to know now opposed to owning a few in your personal name and wanting to switch them over later on.
Then of course the asset protection benefits that come from owning properties in a LLC. With new guests every night, I would personally sleep better knowing I am legally protected.
Hope this helps,
Jason
- Real Estate Agent · Miami, FL · Member since 2019 · 36 posts · 25 votes5y
Hey Jon, short term rentals can be extremely lucrative especially in the very touristy areas. LLCs make it more difficult to obtain financing from different lenders. imo you're better off just getting them under your personal name, but add umbrella insurance in each one of your STR. Umbrella insurance covers you for mostly everything & it's not necessarily too pricey. This is what I'd personally suggest. I actually have a friend who's a realtor down in Orlando who'd love to help you with your STR Condos in Orlando. I'll be shooting you a dm.
- 5yShawn McCormickPro MemberRealtor · Central Florida-Orlando · Member since 2014 · 1k+ posts · 892 votes
Hi @Jon H. IMO, there are pros and cons to both, of which others have already mentioned. Some PM companies will set up websites and landing pages for your properties and that will help with your marketing. I would be willing to bet that most anything that has to do with Disney/Universal will be hard to find a unique and memorable name that don't already have tags and ad spend that may put you so far down in the searches/algorithms that it may not be worth it.
The fact that you mentioned these will be condos makes it even more difficult to brand and stand out, there is much more competition in that space as the units are really tough to make special/unique from all of the others. You are competing with other condos, townhomes and even hotels at that point.
I also don't necessarily think that travelers are looking to connect with hosts if they are traveling here or the parks, most owners of these live out of the area and will never meet the guests and there is no expectation of that. If you were in other areas of Orlando and they were coming in for a funeral, sporting event, to see family, go to the beaches..that is really where the connection is made if you get a chance to meet them.
I'm quite familiar with many of these communities, some perform much better than others and there are many factors in deciding other than purchase price. I'm happy to have a call with you if it would help.
Good Luck!
- Insurance Agent · Norwalk, CT · Member since 2016 · 2k+ posts · 1k+ votes5y
Jon,
As you are probably aware, FL is having a crisis on Property Insurance rates. One of our companies that writes in FL announced a 15% increase for this year. The Condo Association you purchase in will probably have large rate increases over the next several years. That will translate into Common Charge increases. I would talk to some local Insurance agents and get a feel of what they expect so you can factor in an estimate of the higher costs in your projections.
- 5yJulie PrewittPro MemberSpecialist · Kansas City, MO · Member since 2018 · 22 posts · 12 votes
I just want to clarify one thing about umbrella insurance. It is not necessarily accurate to say it covers you for "everything." Umbrellas can be complex and misunderstood, and if you purchase the property with an LLC, that adds another layer of consideration. When it comes to insurance, be sure you discuss your options with an agent who is experienced working with investment properties, and especially short term rentals. Feel free to direct message me if you'd like to discuss insurance further. I know you are still in the shopping phase :-)
- Property Manager · Kissimmee, FL · Member since 2019 · 445 posts · 266 votes5y
Your question revolves around what brand to use for your STR business: your personal brand, or a more professional, corporate brand? It depends a bit on where the marketing is taking place. Airbnb has a strong host culture, and travelers want to see a "face." For the other channels, it doesn't matter as much. For social media and your website, I would recommend a bit of both. Tell your personal story, but keep the approach polished and professional and focused on your beautiful condos. Hope this helps!
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