STR company leases for LTR rentals - Scam or real?

Question

Hi BPers,

I have been reasonably good with rentals in Ocala. I have 4 properties listed for rent in the area where I got 3rd call from a STR company who would like to lease my homes like a 12 month lease, but they would do STR and manage the properties.

These areas do not have any HOA or STR limitations and I never was into STR. But the offers make more sense as for STR company, it might be easier to rent than investing in high priced homes but still make money for their STR operations.

I am always skeptical in too good to be true kind of dealings. So anyone has any experience in renting it to such a company or is it just a scam? Anyone with their experience, pros/cons and wisdom on these could share, I would really appreciate it.

Nathan Gesner · Answer

You lose control of your properties. You don't know if the renter is going to abide by the laws, pay taxes, etc. If they break the law, you may be liable.

If the property qualifies for a short-term rental, contact a short-term manager and ask them to analyze the property to see what kind of return you would get AFTER paying for management. If it makes more than a long-term, then you may consider doing it and hiring a manager, at least until you learn how to manage on your own. Or just keep renting it as long-term.

Bjorn Ahlblad · Answer

Rental arbitrage is risky IMO. They have no money and want to use yours. It may work for a while. Don't wear jewelry when shaking their hands.

Tanner Sherman · Answer

These can be really great for all parties, you get your rental income and they get paid for the work of managing a STR. Have an attorney look over your lease because people that do rental arbitrage typically bring their own leases to you and will have clauses that allow them to terminate early if they choose.

STR company leases for LTR rentals - Scam or real?

STR company leases for LTR rentals - Scam or real?

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