Landlord Risks with Rental Arbitrage

[Tara Harris]

I closed on a Townhouse in San Antonio and was contacted by a realtor who managed STRs (100+) and disclosed that's what he intended to use my property for. We discussed the STR option but were turned away by it due to the fact that we are out of state investors and am intimidated by long distance handling of the cleaning/turnover etc. The realtor is willing to work with us on terms, rental amount or even do a cost sharing model as he teaches us how to enter the STR business.

The HOA allows for STRs. FYI.

Are there any landlords familiar or who have agreed to rental arbitrage and what model did you agree to? 

Things to consider: 

- cost sharing lease

- liability 

- lease terms 

-changes to the security deposit 

- violations to the HOA or city

- wear and tear on the property 

[Michael Baum]

I agree with @John Underwood. I would make it a straight lease at an increased rate. Maybe 25% over the going rate. No way I would do it at the going rate.

You would want to take advantage of their STR rates as well as build up a nest egg if things go south.