Short term home rental companies like Airbnb present their service as a way for individuals to turn their homes or spare bedrooms into extra income. More and more landlords are turning to Airbnb and other similar websites to turn a larger profit off their properties than through long term leases. However, turning your rental property into a short term rental does not come without risks. Huffington Post describes some of the worst Airbnb short term rental offenses including short term tenants using a rental as a brothel and another case where tenants used the rental as a meth lab.
To avoid making pricy mistakes if you’re thinking of entering the short term rental market follow these important beginners’ tips.
Before you invest any money or time turning your property into a short term rental make sure to check your local laws to ensure that it is legal. Lawmakers around the country have begun to complain that landlords are pushing tenants out of rental buildings, illegally avoiding hotel taxes and using rent stabilized units as short term rentals and as a result law makers are passing strict laws with heavy fines to curb short term rental markets. In fact, the Office of the Mayor of New York City issued hundreds of violations already this year to landlords violating New York rental laws that ban short term rentals (source).
Do some research and find out what is a competitive short term rental price and how much you can potentially make off a short term rental. Most short term rentals are going to be more in demand in certain seasons and therefore the amount you can make off a short term rental will fluctuate with the season. In addition, if your market is saturated with short term rentals it will drive down what you can charge for your property per night. Savvy landlords in certain areas might do the math and see the stability and monthly rents of a long term lease outweigh the risk and potential for less income for short term rentals.
Make sure to screen your guest by checking their social media, calling them and reading guest reviews. During the screening process you can relay to your potential guests what rental rules you have established and what tenants can expect if they decide to rent your property. The last thing you want is to have your unit damaged as that will cost you money in repairs, recovering money for damages can be a difficult process and you will lose out on more potential rentals.
Turning your rental property into a short term rental may be lucrative but it comes with risk. Managing your rental building or unit is likely to become more complicated and time consuming if you want to be competitive in the short term rental market. If you do decide to go us websites like Airbnb make sure you have a property management system set up to protect you and your property by tracking your rental property’s condition, repairs and damages between short term rental tenants.
This post is provided by RISSOFT Residential and Commercial Property Management Software, specializing in innovative and cutting-edge property management software for all 50 states. Request a demo or contact us today to receive more information.
Disclaimer: The information provided in this post in not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.