Short lease strategies

8 Replies

Hi everyone! I'm very interested in real estate investing (buy and hold) and I listen to the podcast, but I still haven't bought my first property yet. Right now I'm just looking for some guidance on advertising for short term leases. I'm having zero trouble generating interest from good prospective tenants through Zillow/Hotpads/Trulia/Craigslist, but they all want to stay longer than 12 months. I'm in a situation where my previous tenants are a military family that got orders to leave 3 months into their last year and I really only need to fill the 9 months. I plan on moving back in (to my house) when I'm done with law school next year. My rental rate is equal to the market rate for the area, so I may consider dropping it a bit (but not too much or I'd be losing too much money).

Does anyone have any good suggestions for online sites other than the ones I mentioned above for finding good tenants for shorter term leases? Or maybe some places I could look for good short term renters? I was considering Rent.com but I'm not sure it's worth the money. Or do I need to just bit the bullet and start lowering the rent?

Thanks!

If I were at school and had the potential income from stable long-term tenants in my house, making the monthly payments, I'd keep the property rented and look to buy another owner-occupied house as soon as I was able.  What sort of family wants to move into a home, become established, rent for 9 months and then have to move?  No thanks!~

You want to buy and hold, right?  So, convert this one to your first rental, and buy your next with a thought to growing your asset base.  

-It is challenging to save up for the higher down-payment on a non-owner occupied property.  

-You will get lower interest rates on an owner-occupied property. The intent must be to occupy for at least a year, before converting the property to a rental.

-You can house-hack on the next purchase, allowing you to buy a plex unit while renting out the other unit/s.  

Anther benefit to having a continual base of tenants now is that you can count the rental income for the purpose of future lending once you have 2 years of rental income.  

Kerry,

Thanks for the input! Unfortunately, we bought the house when the market was high so we're actually losing money renting (or once we lost our homestead exemption we started losing money when the taxes went up). It's a temporary solution until we can move back in and eventually just sell. I entertained turning it into a rental but we just paid too much for it. Maybe in the future if we can refinance once we've built some equity I would consider turning it into a rental, especially since there was a lot of legitimate interest because of the location. Right now I'm kind of in a pinch.

I was hoping there was some market for short term renters that I was missing. Maybe Airbnb?

@Jason Bullinger . @Kerry Baird had some great ideas. I won't repeat any of them. I'll add that Airbnb, as you asked, is a great option, especially if you're in a location that visitors want to be. I am Airbnb's biggest fan and write about it a lot. Is your place furnished already? If not, you might have to drop a few thousand at IKEA, but if you could keep it rented to tourists, it's quite possible you make more than the mortgage and help to cover the furnishings expense. And then -- to get to your main concern -- you have the flexibility that you need to move back in. 

You'd need to check Orlando's short-term rental laws to make sure you can do this.

One other thought: If it is furnished, try posting it on the Facebook pages for traveling nurses. There are a few out there (I'm sorry I don't have their names right now) that allow outsiders to post ads on their page. Good luck!

VRBO is a good platform for short-term rentals. This site has been around longer than Airbnb and receives more traffic. However, it’s more difficult to use.

You can also use social media resources to your advantage. Post your property on Facebook and Twitter. The first one is the most conducive social media platform for marketing rentals. I heard that Instagram could also be leveraged in some markets.

@Jason Bullinger , I was going to respectfully question @Brad Russo 's assertion that VRBO gets more traffic. Then I did a little research, and at least according to Evolve's article here, he's right. They get more monthly visitors than Airbnb. 

One other thing I was going to ask: You said you're posting it on Craigslist. Are you posting it under "sublet/temporary"? Also, I think you said you're looking to get someone for 9 months. That might be kind of an odd time period for some people. Traveling nurses do 3-6 months. Business people probably aren't in there for 9 months at a time either. I'd try to tack together a combination of 3-month or 6-month stays to get it filled. 

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@James Carlson , @Brad Russo , @Troy Southerland

Thank you all for the help! Thank you especially for the links.

As it turns out, I was able to find someone who is looking to move to the area that wants to test the waters for a few months before they decide to buy a house. The ended up finding the property on Craigslist. Thankfully, the shorter lease worked out great for them. I definitely learned a lot from advertising and looking for renters (we had a property manager find our previous tenants). The BiggerPockets guide was extremely helpful. I will definitely consider all of these strategies when I am looking for renters in the future.

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