Renting a Home to Use as an AirBnB - Legality/Landlord Help

[Wes Short]

Hi, I was wandering if anyone had experience in renting a home, signing a normal lease, and then turning that home into an AirBnB. I originally heard this strategy on the BP Podcast, I think episode 229, but was wondering if anyone had taken this route yet and if you have how did you deal with the landlord. Did you tell them upfront or did you go ahead with the idea and basically look at it as you have the right to the property and you can run at as you like? 

I know some leases have sub-leasing clauses in them but I haven't seen any that talk about short term renters in the home. Also was it worth it, does the short term rental income create enough return to go through with starting up a new unit every year. I am very early in the real estate game so I am fine with smaller returns and a lot of work at this point but just wanted to see if anyone had experience doing this at the start of their career. 

[Julie McCoy]

@Wes Short What you're running into here is most of the people active on this forum own properties in vacation rental markets.  @Luke Carl is right that there's a difference in listing your VR on AirBNB and "having an AirBNB" (e.g. a place in an urban market that isn't so oriented towards vacationers).  It sounds like you're looking into the latter, and most of the people here (including me) aren't in that particular niche.  @Paul Sandhu is not in a vacation rental setting but his market is VERY unique!  (I do find it hilarious that someone with almost no posts will jump in and say they aren't successful)

My perspective on the matter is what you're proposing is possible, but not as simple as it sounds on paper.  Finding landlords who are willing to let you sublet for short-term purposes will be difficult, but not impossible - I found one in LA, but ultimately the property wasn't worth the financial investment involved.  I think you're on the right track to target mom-and-pops - professional property managers and corporate rental companies won't even consider such a proposition.  DEFINITELY make sure you look into the local regulations, are able to talk intelligently about business insurance (and obtain it when you get a unit), and otherwise generally operate in a wise and lawful manner.  

And look really closely at your market - what sort of rates and occupancy can you reasonably expect in the neighborhood you're looking in?  (then assume you'll get less)  What's realistic for your recurring expenses?  Lucas is right that you're looking at a significant cash outlay to furnish the place - and don't forget that means linens, kitchen supplies, and decor, as well as beds and sofas.  

I had no idea that STR income wouldn't count for financing purposes unless you owned the property! Learned something new from @Avery Carl.  Definitely worth keeping in mind when thinking about scaling long-term.

Anyway, it sounds like you've got a pretty decent idea of how to approach things - just make sure you know your numbers, and be prepared for lots and lots of "no"s.  Like any good deal, it requires some hunting.