Technology is on the move again…
By now you should have heard about how using short-stay platforms like Airbnb can more than double your rental income. They allow people who are looking for hotel alternatives to find your furnished rental.
That’s Old News…
What we’re finding is that most people can get up and going, but they burn out. Short term housing is definitely lucrative for landlords, but it’s labor intensive. So much so that the industry has evolved. Landlords no longer need to operated an old fashion short term rental business to beat the long term rental market.
If you’re not following an approach like what’s outlined in Airbnb for Landlords, you may only stay in business for a year before hanging it up.
Here’s the thing… sure you can successfully self-manage a short term rental AND you can make a killing BUT it’s a lot of work.
So even if you’re organized, the constant prep and quality control needed for your next client, and the next, and the next will takes its toll.
And that’s one of the main reasons I recommend that you aim for long-shorts and use a rock-solid infrastructure such as the one in Airbnb for Landlords.
But things have changed…
Rented.com – Your Corporate Tenant Finder
Rented.com is like a clever mash up of eBay and Airbnb.
On your behalf, Rented.com holds an auction where property managers bid on the right to manage your short term rental. Yes, they fight over the privilege of become your asset manager. Imagine that!
Many of those managers have access to sophisticated computer programs that enable them to dynamically adjust rental prices every 30 minutes based on supply and demand. They can update rental rates on over 25 different travel websites the same way airlines adjust ticket prices.
Managers that bid in Rented.com’s auction are capable of operating your furnished rental more profitably than you are.
Now don’t get your feelings hurt. The fact is, with all the high tech whiz-bang they use, there’s no contest!
So Rented.com matches you with the auction winner; the vetted property manager that bids the most to operate your rental.
At that point, you have the option to sign a one-year agreement with the winning property manager! It’s like getting a master lease and a guaranteed income stream from a corporate tenant!
Rented.com makes money by charging the winning management company a fee if they sign an agreement with you.
Introducing Guaranteed Short Term Rent
Slow down and get this; it is a game changer.
We landlords now have a new option.
Typically, you hire a property manager to operate your rental, and YOU PAY THEM. They are an expense.
Now with Rented.com, the property manager is essentially your corporate tenant. THEY PAY YOU a fixed amount each month. They are the source of your revenue.
What This Means
There are two jaw-droppers and one subtle surprise:
1 – It’s now possible to be a passive landlord who collect well-above market rent and you don’t have to deal with customer service calls or coordinating turnover cleaning. You can transfer the obligation to a property manager — which means they pay for light maintenance, cleaning, marketing, booking, and occupancy tax. You just need to cover utilities, mortgage, and property taxes.
Does that mean you get a guaranteed rate of return? Yes, it does.
2 – You need not have a house on the beach to be considered. Urban and rural locations are in play as well. Rented.com currently operates in over 17 countries, 38 states, and 312 cities. So what are you waiting for?
3 – Now, with a one-year agreement, you’re essentially operating with a corporate tenant that should fit into a neat box for your insurance company. They’ll know how to classify your venture.
I Gave Them a Try
I put my experimental Airbnb unit up to see what Rented.com could do.
First of all, I thought was that their customer services was outstanding.
Secondly, I thought “Wow, they matched me with a company that offered $1,140 per month for one year.”
The offer was in line with what I could do if I did all the work myself. They convinced me that their model produces sensible results. This was an outstanding offer…remember my market rent for my unfurnished unit is $850 per month.
However, Sacramento’s Short-Stay Ordinance limits landlords to 90 days of short stays per year. Because I want to operate legally, I declined to move forward with the management Rented.com matched me with.
Can’t believe I turned down a corporate tenant!
But let me point out, I wasn’t charged a dime for trying Rented.com – you can’t beat that!
Thumbs Up with Two Caveats
This business model is flat out brilliant! I fully recommend that you try it out no matter where your rental is located. But, beware of the following:
1 – You, as the property owner, are solely responsible for observing your city’s codes. The onus is on you to make sure you’re in compliance. Please don’t run a bootleg operation. That not a good path for earning long-term wealth.
2 – You must check out the property manager’s credit worthiness. Screen a property manager just like you would a tenant. Check their credit score. Don’t turn over the keys unless the property manager can convince you that they can make payments regardless of their success finding short-stay clients.
Rented.com say they vet all the management companies in they marketplace (550+ companies) but it’s up to you to decide if you want to work with them.
Check out 7 Things to Consider When Finding an Airbnb Manager for Your Rental to learn more.
A Whole New World
Based on this new information, I’ve updated my stance. I now believe that if you DON’T HAVE TO DEAL WITH RESTRICTIVE CITY ORDINANCES, then give Rented.com a try (and let them know I referred you).
However, if you do have restrictions, then you’ll find long term success specializing in long-shorts as prescribed in Airbnb for Landlords.
Both paths can lead to sustainable above market rate rental income and speed the day when you dump your 9 to 5.
Interested in exploring how Airbnb and other ways to increase your income?
- Check out Airbnb for Landlords to learn learn how to make money with Airbnb
- Consider the Overwhelming Benefits of long term Airbnb rentals
- The Top Ten Ways Landlords Can Build Equity
- How to make money on your rental properties with Leading Landlord
Nashville has been in a hot debate over non-owner occupied short term rental permits. The state chimed in but bowed out untill 2018. I think the conclusion, for now, is that Nashville will not issue or renew non-owner occupied short term rental permits for the time being. Which sucks for us, because we just invested in fully furnishing our duplex for this purpose. Are there other alternative renting opportunites to pursue without the need for a short term rental permit? to rent corporately or otherwise apart from the standard long-term tenant and still be legal. Any thoughts?
All city ordinances are filled with loopholes. Just like the tax code. You can do great simply renting on a 30-day minimum basis. And, if all else fails, there’s a growing market for fully furnished rentals on an extended basis. So much opportunity – don’t worry. It’s a small world and people want to explore … especially in Nashville!
Al, I own a classic Colonial 4/5 bedroom home on the north shore of Long Island NY….high end amenities, beautiful property . Can walk to LIRR to Manhattan for a 36 minute commute; great schools, restaurants galore, friendly town, plenty of activities for Adults and children. Near the water, home has Beach and tennis rights. Would like to investigate renting to a person who has a temporary relocation (1+ years) with the option to buy if that eventually occurs. Where do I begin?
So many directions to go. Big home – good for an executive and his family. You can check out Corporate Housing By Owner and try to book someone yourself. Or you can hire someone who already has corporate connections and help people find housing.
If you want to do it yourself, you would be a great candidate for my Niche Rentals course that will be opening in August.
My home is in Wayne, Pa. It is in walking distance to train station & town center w/ lots of restaraunts & shops. It is a well loved three bedroom I am considering making a corporate or short term rental for the next 1- 5 years. I have a few questions:
1. I don’t really want more than two people @ time staying in my home….can I control that?
2. I am considering using my furniture including some antiques. Do I insure my furniture or does the corporate or short term rental company do that?
3. I care about my landscaping & interior, could I be the gardener &/or cleaner for my own property?
1 – Rented.com pays you to stay out of the way. They pay you to give away control.
2 – You can negotiate rental insurance – absolutely
3 – See answer to Question 1. But everything is negotiable.