When you own an investment property, you can consider a couple of different ways of renting it out for passive income. Traditionally the property is leased to a tenant for a year or two, and for that time, you have steady passive income. Recently short-term rentals like Airbnb and similar are becoming increasingly popular. It’s not for everyone, but if you feel compelled to, step one would be finding out if your city allows you to do short-term rentals. Some areas discourage or limit how much you can rent it out for, including how many days of the month you’re able to rent it out, so do your research for your area. Let’s say your city allows you to convert your property to a short-term rental with Airbnb fully. Some people end up making four times more than what they would on a traditional rental lease because they’re able to charge much more as a vacation rental.
It can be a very lucrative way to run your property, though it’s a lot more hands-on because you constantly have short-term tenants coming in and out only renting it only for a few days. The property would need to be continuously cleaned in anticipation of the next renter. Sometimes those renters are back to back, and there are only a few short hours to clean. The person who decides to rent out their property as a short-term rental unit would be willing to put in the time to do their due diligence. Determining rates and fees, expenses, time management, and possibly hiring and managing a cleaning crew as well. Airbnb short-term rentals can be very successful, especially in areas with popular events or attractions. For example, there are stories that the weekends during Coachella are so lucrative, some renters can finish paying off their mortgages ahead of schedule.
A very creative way of doing this is that some people say you don’t have to own the property. You just need to control it. So, what does that mean? As a tenant, you go to a landlord who owns the property, and you tell them, “Hey, I want to rent your property, but I want to rent it out as a short-term rental.” You don’t own the property yourself, it’s not in your name officially, but you put a lease together with the landlord saying it’s okay to rent it out for short-term rentals. Now you can essentially, without owning the property, only controlling it, run an Airbnb business or a short-term rental business out of that property. Ensure everything is done legally and professionally. You don’t want the landlord to have to worry about the people coming in and out. But if you can negotiate with the right landlord… That right person. It can be done.
contributor: @MichaelPomes
Mike’s 2𝇍: Real Estate and Retirement
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