Short Term Rental Investor Credibility - or Lack thereof

[John Underwood]

For the Newbie STR Investors these things let me know that you are very new, not an investor at all or don't understand what owning a STR is all about.

1. Refer to STR as an "Airbnb" You have a STR listed on Airbnb.

2. Arbitrage - enough said.

3. You don't use the search function first to find 100 plus similar questions to your that have already been answered many many times.

4. This is Service Industry, and you have to treat it as such. It is more work than an LTR.

5. You need to set yourself apart from your competition.

6. Don't expect to be spoon fed. See item 3 above.

7. Perform your Due Diligence and run the numbers. STR's are not as easy to make money with as they once were and some people are failing miserably.

8. Some people who were doing well are not now due to oversaturation of their area.

9. You can't change the view or location, but you can remodel, add amenities etc.

10. Check your local regulations and just because they are OK now doesn't mean they will be in the future. What is a backup plan for the property?

11. Have cash reserves to weather a short-term downturn or Pandemic.

12. Why do people want to book your property? What is the draw? Hopefully there is more than 1.

13. Do you have a place nice enough and good enough to be more than a STR and be a vacation rental also? Would you go on vacation here with your family?

14. Remember you can now put your money in a high yield bank account and receive a 5% interest rate or better. You can consider appreciation and tax breaks even if you're not make any or much money now. 

15. You don't need an LLC for 1 or 2 properties that have mortgages on them. Don't over think it. Gen an umbrella insurance policy if your losing sleep at night over this.

16. You need the correct type of insurance for an STR. It is not a homeowner's policy or a landlord policy. Foremost, Proper and CBIZ are 3 popular ones.

17. Research Insurance availability and rates. See Florida for example.

18 . I personally would not put all your eggs in the STR basket. Have other investments such as LTR's, 401K's, Notes etc.

19. Just because you are OK with living thrifty and cutting the cable or safelight TV doesn't mean your guests will like it. If you have a nice place its only a couple of dollars to provide this service. You can use a web-based version such as You Tube TV too and also use it at home. If you have a 2-bedroom place in town that rents for $75 a night I get that you need to cut corners and this is OK just be clear in your advertisement that you don't provide this. You might want to add good antennae in case your internet goes out for an extended period.

20. Don't go into this with the mindset that you know its already illegal to have a STR in your location and how do you get around it. This will not end well for you.

21. Stay in your place occasionally. You will find problems and repairs that no one is telling you about and your guests notice and think you just don't care. It might not turn into a bad review immediately.

 22. Smart thermostats, cameras, Wi-Fi gadgets can help you keep an eye on your property and even let you know there is a problem developing. If you get alerts from your smart thermostat that the temp or humidity is out of range, you set you may need to have your HVAC unit serviced before it is a real problem.  I highly recommend the Honeywell 9000 color touchscreen. I have 4 of them.

23. Smart Locks - The Schlage Encode is one of the most popular ones. Have a backup key in a hidden lockbox for emergencies.

24. Keep spare batteries readily avail for your door locks, remote controls etc.

25. Have great pictures and descriptions on your listing sites. Look at your competition for ideas for your description and for decorating ideas. Look at simar properties in other areas for this same information. Feel free to do a little plagiarizing, but not too much!

Feel free to add anything else that I missed.