Salt Lake City Air BnB vs Long Term Rental

[Sarah Caldwell]

My husband and I are in the process of renovating our basement to be a separate 4 bedroom 2 bath unit. We are debating whether we should turn it into an Air BnB or have a long term rental.  Does anyone have any experience on the decision between having an Air BnB or a long term rental that can weigh in on the pros and cons? Thanks!

[Amy Kendall]

@Sarah Caldwell I live in Lehi, Utah and we have been renting out our basement apartment for a little over a year now.  We have quite a few long term rentals and I had always been interested in trying out the vacation rental market, but my husband never really liked the additional costs of furnishing the place with the variable income aspect and was always hesitant to give it a try.  We decided our basement gave us a good opportunity to give the vacation rental thing a go without much risk involved.  We hired a management company that did a good job and surprisingly, our basement was rented out with very little vacancy and we definitely made more than a traditional long term rental.  We did finish the basement with a lot of upgrades and it is a 2 bedroom 1 bathroom.  We also went through the city and paid the impact fees and had it registered as a legal accessory apartment, which was not difficult to do.  To give you numbers, after all management fees and cleaning fees were accounted for, we consistently made about $1500-1700/month.  Then, we got a tenant that wanted to stay longer and didn't want to go through the platform and just wanted to pay us directly, which worked great because we actually made more money that way and avoided the management and cleaning fees.  After that tenant left, we decided to offer the basement as a short furnished month to month rental because as a property manager, I see a lot of that need as well in our market that doesn't always get met.  We had no problem renting it out that way for $1650/month, and it was easier to manage.  I imagine that if our basement wasn't furnished and we offered it simply as a long term rental, we would maybe get somewhere in the $1200/month range.  Currently, we have been doing Air BnB again but managing it ourselves and it continues to be booked almost continuously.  One potential negative to consider and that bothered us the most was that we didn't get to screen any tenants when we did not manage it ourselves.  We don't smoke and we have our little children around, so we didn't like it when our guests came out to smoke.  Not that big of a deal, just something to be aware of that I hadn't considered.  Hope that is helpful for you.