Short term rentals vs. long term?
The rental unit in our house is almost ready and I am weighing the pros and cons of doing a furnished short term rental on AirBNB vs. a traditional year long lease. Anyone doing the short term thing right now? Would love to hear your feedback. The big pro in our case is the possibility of having extra space when we need it. We have enough furniture to furnish the space, so that doesn’t factor in to the equation. Of course long term lease would mean steady income. We have been landlords before, so it’s not new territory. Rental income will go to savings, not to offset the mortgage, but, of course, more income is better. Also, we’re in a very desirable area, close to subways, restaurants, bars and services. Any advice? Thank you!
snarkolepctic
in Real Estate - Rentals 12 years and 5 months ago
3
Please log in, in order to post replies!
3 replies
FishieFishie | 12 years and 5 months ago
Another issue to me is just the complications of money, checking credit all the time, requesting/refunding deposits, encountering scams, or encountering people who think you’re scamming them. I agree that longer, at least 2+ months is a better idea. And here’s a suggestion for you. I discovered there’s a sizable market for traveling nurses. They ship out on gigs that are usually in three-month increments, and I’d imagine that they make great tenants. Try and tap into that.
brokelin | 12 years and 5 months ago
A happy medium for you might be to rent it semi-short term, like a corporate rental, for say, 3 month minimum, up to a maximum number of months you’d figure out as you go. You’d need more than just furniture – lines, dishes, TV(s), cable, etc., but you can charge way more for that than you an for a regular rental. You’d be advertising on different sites that specialize in that sort of thing, corporate rentals, not AirB&B, you might have way less hassle with people if you look for professionals coming for work, often with their job paying the bills. You wouldn’t have it for your own use as often, but you could plan around having some times you wanted free, if it worked out. Way less hassle, longer-term guests, don’t know about the legalities and tax treatment – smart just to charge enough to pay it, and pay it if owed.
tanner | 12 years and 5 months ago
Don’t underestimate the amount of work required for a short term rental–at least if you are trying to rent it often enough to make more than you would just renting it long term. Responding to inquiries, completing bookings, arranging to be available at all hours for arrivals, cleaning and maintaining, showing the apt to locals who want to rent for relatives, and so forth. If you’re willing to put in the work, you can make much more income than with long term (easily double, more or less depending on the season, how often you make it available, etc.)–assuming it is a great place in a great neighborhood. But, assume the increased income is due to the part time job you are taking on as a result. Also consider that you’ll have to file and pay NYC hotel tax–and possible state and local sales tax, depending on the specifics of your place–on your earnings (and the City is cracking down on that, so especially if you are advertising on a major site like AirBnB you shouldn’t overlook that).