Weekly Rental Apartment Building

[Beau Daniel]

Does anyone have experience with owning and/or managing small multi-family complexes that allow short term (1 week) rentals? Thanks!

[Nick L.]

Around here they're called boarding houses or rooming houses. They can be a good cash flow business if you are willing to provide super-active management.

The up sides:

- Weekly cash payments

- A lot of the time payments and tenants are provided by third parties such as halfway houses and homeless charities. So you're guaranteed to get paid.

- Sometimes you get surprisingly good tenants, like construction workers in town for a few months who are trying to live cheap and save all their money

- Super high cap rates, cheap to buy

- Can be in locations where regular tenants would not want to rent, like above shady bars or in shady parts of town.

The down sides:

- Many tenants have psychiatric and/or substance abuse problems. 3am calls are pretty regular.

- Some cities try to put you out of business by cracking down on code compliance issues and nuisance calls

- Not many people want to deal with the hassle, hence the high cap rates.

- Can be hard to find good management when you want to grow or move on.