Creating a lease agreement for Airbnb and short-term rental hosts

[Daniel Gopar]

TLDR: I'm a buy and hold investor. I have a unit I'm interested in renting out specifically to people looking to do rental arbitrage. What should I included in my lease to make it fair on both ends?

Long Version:

I have a 2bd/1bth on a desirable part of town that I think would do good as a short term rental. Unfortunately, I have no desire/interest in doing this myself since I am focusing all my efforts in getting my new business off the ground and running. (Business is in creating software and am confident I can make more than a W2 would). I would like to know if any landlords here rent out to people who do rental arbitrage, and if so, what do you include in your lease?

I haven't heard much around this topic from the Landlords point of view, only from the people who are doing it. I have heard things like:

- Tenant will be responsible of repairs up to a certain amount per month, and if it exceeds that, then landlord will step in.

- Higher security deposit amount

- Include in lease that noise monitor is required and should be enforced

- Include that tenant must have additional insurance/protection.

What else should I include? I want to be fair for both parties. Thank You!

[Andrew Steffens]

Hi! Im a PM in Tampa, FL with 80 or so units.  I have also arbitraged (before I think that word existed in conjunction with the word rental).  I am curious why you do not pay a designer to furnish and and then find a full service PM to manage? Most of our clients are out of state and we do everything so their lift is minimal.

If you still opt for arbitrage, I think the terms you laid out are standard and should be agreeable.  The amounts will be negotiable of course but I think you are on the right track there.

[Brooklyn McCarty]

Why not just STR it yourself?

[Ryan Moyer]

What is the additional tenant insurance/protection?  I would think that would limit a majority of potential renters and make it less desirable to an arbitrager.

[John Underwood]

Higher rent, higher deposit, profit sharing above a certain amount.  After all its your property.

[Michael Baum]

Hey @Daniel Gopar, I echo what @John Underwood said.

I would charge a premium above market rate. What that would be is up to you.

One thing I would add would be that the arbitrager would have to adhere to any and all city ordinances. One of those is a maximum 8 guests.

I would also be ready to move stuff out if the person fails at this job. STRs can be challenging and many new arbitrage people don't have any money so if things get dicey, the are apt to walk away from the lease.

I would verify what kind of funds that possible person has. Are they nearly broke?