New AirBNB Business in Columbus Ohio!

[Isaac Anderson]

Right now we have 5 properties that we do rental arbitrage through right now and we are looking to expand into more properties. The issue that were having is in our communication with the landlords. They are very comfortable with Long Term Rental and allowing someone to come in and do Short Term is sometimes very intimidating. 

"Risk" is the biggest objection that we are seeing so far. My Business partner and I have both been in the Military for a combined 18 years so when a landlord or property mgmt company talks about risks... well we get risks and we know how to mitigate most risks (Exterior security cameras, smart locks on the doors, noise detection, AND a Full Time Private security team that is tied in with the CPD)

Does anyone have any advice on what we can be saying different or what is the best way to overcome some obstacles with landlords switching from Long Term to Short term? I love what I do and would love to hear your thoughts!

[Peter Lohmann]

Originally posted by @Isaac Anderson:

Originally posted by @Peter Lohmann:

Risk is not just limited to the behavior of guests. As a property owner myself, here are some of the risks that come to mind when I think of turning one of my long term rentals into an Airbnb:

-Seasonality of income/demand throughout the year.

-Regulations (Airbnb/STR is regulated on a city-by-city basis and can change at any time).

-Increasing competition from ever-more airbnb units coming online, reducing demand for my unit and lowering rates.

-The sunk cost of furnishing the home.

-Airbnb property management companies in general are in a bit of a limbo state right now with regard to regulation by the State of Ohio Division of Real Estate. If you call and talk to them about it, you will find their opinion is that they must be licensed just like a normal property management company or real estate brokerage. Yet several airbnb management companies are operating without a license and claim they do not need one. Who knows how this will play out.

-Risk of hiring a young/new company to manage my property. How do I know they will actually provide transparent accounting and remit all funds to me that are owed. Especially if they are claiming they do not need a license and are unregulated by the state.

-The risk of a lawsuit or liability incident goes up with so many people coming through the door every month.

-Risk of my insurance company not covering a claim if they find out I'm hosting short-term rental guests OR having to pay for more expensive insurance to make sure I'm covered. Airbnb's host insurance is notoriously useless.

-My neighbors might be pissed off about me running a STR and call code enforcement or otherwise be a nuisance. Or maybe I like them and don't want to make them mad.

That's just off the top of my head. Some talking/thinking points for you to consider as your work on your marketing and business plans.

We decided to play it safe and get all the licencing and permits that we need to make sure our LLC is in the clear. We have a whole team of lawyers, CPA's, legal etc.. In fact, we can't even list anything on AIRBNB without having a STR Liscence from Franklin County. Would you suggest adding anyone else? You are right that we are in a limbo, but I would rather be on the safe side when Columbus decides to crack down.

Your LLC and STR permit from the City of Columbus (it's not from Franklin County btw) have nothing to do with being licensed to operate a property management company (broker's license), which is handled by the State of Ohio. If you want to be safe, you need to be operating a licensed real estate brokerage.