All Forum Posts by: Benjamin Dougherty

@Joe Splitrock Perfect! That helps a ton, thank you. I figured there would be a liability issue but wasn't able to put my finger on it. And good to know there is insurance for short term rentals and not to rely of Airbnb's insurance. I can see how it would be an issue if the renters did a bad job with the Airbnb as well. If we can't find a long term tenant to rent both the main house and the garage appt, it sounds like the best option would be to find a long term tenant for the main house and Airbnb the garage appt, with a property manager managing both.

@Colleen F. Thanks! Good call with making sure the tenant would be responsible for expedited repairs. I can see how it could get sticky when determining what repairs the tenant would be responsible for as a result of the Airbnb and what the landlord would be responsible for based on normal wear and tear. As far as long term rental for the garage appt, I think it would make the most sense to rent them separately as opposed to subletting. Yes there will be more headache dealing with 2 groups of tenants and two separate leases but I feel like it would worth it to have that extra control.

@Joe S. @Michael Dumler @Jonathan Dempsey @Josue Vargas Thanks everyone for replying! There is no HOA and I know that short term rentals are legal with this property. When the owner lived in the home, he Airbnb-ed the garage apartment for a while, but got worn out doing it himself. The landlord is definitely open to the idea of letting the tenant sublet the garage appt. @Theresa Harris can you elaborate a bit on the risks for the landlord? Can an umbrella policy protect against person liability the same way as for long-term rentals? Does Airbnb have their own insurance built in? @Nathan Gesner I know this is a concern for subletting, not being able to screen the subletting tenants. The landlord and I discussed the possibly of letting the tenant sublet the property to a long term renter, with the landlord having final approval (not sure how that would be written into the lease). But with a short term rental, to my knowledge there is no screening process anyway so that would be a risk that any Airbnb host would have, right? Are there protections built in by Airbnb to mitigate this risk? As far as getting hung out to dry, the tenant would still be responsible for the full monthly rent, so as far as getting rent payment goes each month, this would be the same as a typical residential lease. And lastly, that's a good call to just have a property manager deal with the Airbnb instead of the tenant. The property will be maintained by a property manager anyway, so that does make a lot of sense. Thank you all so much for the help!

Can tenants Airbnb a rental property? I believe this is called Airbnb arbitrage? From the landlords perspective, what would be the things to watch out for or the extra liability/risk involved? I'm a realtor and listing a rental property for lease that has a main house and garage appt. Potential renters are asking if they can live in the main house and Airbnb the garage appt but I want to make sure I'm advising them correctly. FYI this is in Houston. Thanks for the help y'all!

Hey @Shahzad Shaikh! Like Ryan mentioned above, it's near impossible to find something in the greater Austin area in that price range. Plus, it's really tough to cashflow in this market, unless you can find a small multi-fam with value add opportunity (I've got one at $900K). However, I do almost all of my investment deals in Houston, which aligns really well with your investment goals. I'm a Realtor here in Texas, living in Austin. I do about half of business in Austin and half in Houston, as I'm originally from Houston. Just to give you an idea of what the numbers look like, here are what my last 2 deals look like:

1: 246K purchase price, 20% down, cash flow $350/month - this is an area where we are forecasting significant appreciation

2: 215K purchase price, 25% down, cash flow $650/month - appreciation not so significant in this area

Let me know if you want some more info