Renting to Phoenix Snowbirds w/ 6 Month Rentals or Airbnb ?

Question

I’m interested in buying a rental house in Phoenix area and use it myself perhaps May thru October and rent in prime vacation season Nov thru April to tourists or snowbirds from up north that flock to Phoenix in the Spring/Summer.  After a few years convert to full time residence.

Any suggestions on how best to work this ? Is it better to find six month rentals each year or have a company market it as a Airbnb and take care of the housekeeping needs ? Any leads on Airbnb management firms in that area ? Which rents better single house vs condo ? Thanks all ? Art

Doug McVinua · Answer

@Art Webb Short-term furnished rentals do very well in the Phoenix, AZ metro area, especially during the peak winter months. As a Property Manager with a few furnished homes, the demand is often high, many reasons: sometimes it's someone in between homes, sometimes it's a seasonal person, sometimes it's a temporary assignment (travel nurses), and on and on.

We restrict ours to 30 days minimum, it keeps the weekend wedding party crew away and filters it down to those with more serious intentions. Some owners and management companies do well with VRBO type rentals, it's just not our thing. I don't want the excessive turnover in the property, it costs money and creates wear and tear.

With the 30 days minimum, we can screen the tenants the same way we do for long term, create solid leases, move-in/move-out, etc. Our vacancy is near zero, demand is strong and rental rates are high.

Lots of options, happy to discuss properties and what works well in the market.

Colleen F. · Answer

@Dave Skow  he was looking to use it May to October and rent it prime season. I am wondering how @Art Webb made out since he posted about 2 years ago.  Interestingly I inquired about travel nurses in the summer in Phoenix and was told that there was demand year round but that is a different group.

Jana Crum · Answer

@Art Webb I agree that the best area for your strategy is the Scottsdale area. Plenty of snowbirds like to stay in that area and the rents for Scottsdale have been increasing due to high demand and low inventory. You will have fewer turnover costs by keeping one tenant in place for the 6 months that you don't use the property.  On the other side, Scottsdale is always a hot vacation area with plenty of spas, golf courses, and shopping centers that attract visitors year-round. Airbnbs are always in high demand. Hope this helps!

Melanie Johnston · Answer

@Art Webb You will do very well with a fall/winter seasonal rental in Scottsdale! We have such a shortage of inventory that new-to-market homes get snapped up. Our highest season is January through March, but if you don't attract a single "guest" for 6 months, you should be able to easily attract a 3-month and then another 3-month guest.

I had an STR in Scottsdale that I Airbnb arbitraged. I furnished the home (3 bedroom with an unheated pool) and rented it from my friend for the express purpose of STRing. That was written in our lease. With the pandemic she needed to move back in, so it is on hold for now.

You are asking if it's better to rent for 6 months or for shorter stays. You also have another option...I call it a hybrid strategy. This means you can rent it by the month (1-6 months) but if you find you have open months or when you think you can make more $$, rent it nightly (I would do a 3-day minimum to avoid being a party house) through Airbnb.

So how do you rent it monthly? You can have your agent list in on the MLS and pay MUCH lower fees than you would to a property management company. Tenants who come through an agent on the MLS fill out a formal application and your agent and the tenant's agent do all the work. Normally tenant's agents get about $400 in a one-time commission...a lot less than you would pay either a PM or Airbnb (over multiple stays) to find you a tenant.

When I help an investor buy a home, I list in on the MLS for the lowest fee my brokerage requires, which is $50. I consider that I've already made my commission on the property purchase, so I include MLS promotion as part of my service.

You can turn this listing on and off, so you have complete flexibility on when you want to attract monthly renters. One winter season I rented to a retired couple from New York, followed by a retired couple from Chicago. (Average rent was $5,800/month). These kinds of renters are very gentle on the home so you don't have to worry about wear and tear or wild parties disturbing the neighbors.

I have so much more I can say about this topic. I should probably write a blog post here and include it all...thanks for the motivation!

Many of my STR investors self-manage their rentals, but that does require a significant investment of time.

As far as a STR management company for Scottsdale, one of my STR investors from Seattle did extensive research and chose the person below, who she recommends. I know things are going well because that investor just closed on her second Scottsdale home (with me) that she is prepping to STR.

Janaya Goselin

Arizona Desert Vacations

360-296-4935 (She is local, despite her area code)

Hope this helps!

Melanie

Matt Greer · Answer

I would make sure you understand the regulations that are starting to happen to short term rentals in the area first. I was in a meeting 2 weeks ago where the mayors of a couple of the surrounding towns were there as part of a panel and they are really cracking down short term rentals and making sure that people register them. They want to make the regulations tighter in some towns as well so do your research.

Dave Skow · Answer

@Art Webb- I dont think  people are flocking to pheonix area in the  summer ....I doubt finding  consistent  6 month  renters   will be easy ...you might market it as a MTR and  provide discounts as the lease gets longer

Art Webb · Answer

All… I appreciate you valued comments.  Keep them coming.  Are the snowbird folks looking more for condos or SF homes ?   2 or 3 BRs ?   1 floor over 2 levels ?   1st floor entrances vs stairs to a second story apartment ?   Looking for most desired house or condo plans desired by most renters%. Thanks all !!

Doug McVinua · Answer

@Art Webb The location discussion is interesting, comes down to a few topics. How much do you want to spend, what area do you want to end up in and what will rent well for you in the interim? Scottsdale has been mentioned and it is wonderful but it's also not for everyone. Some love to be in the hub of activity and are willing to pay the price for property etc to live there. Others want to be in an area that's a little quieter, not so congested, more affordable, etc. Some want to live on a golf course, some want nothing to do with golf, same for mountains, pools, formal living rooms, 10 car garages, etc. Buyers often ask me if this is a house I would buy and I generally answer back that I'm not the buyer, don't expect to live here, and follow that with more questions to the buyer. We all have likes and dislikes and thank god we don't all like the same thing. Of course, I can show and tell you risks, whether it be property style, condition, backing to roads, power lines all sorts of things that may affect your enjoyment and the suitability as a rental but in the end, it's your decision.

Much of it depends on what you are looking for and a buyer's agent's goal should be seeking to understand your goals and help you achieve them! There are many correct answers to location, it's finding the best answer for you that's important.

William Beck · Answer

If you're looking to live in it from May-Oct and rent as LT rental or STR - I would personally do the STR route without a doubt. The amount of money you can make in the Dec-April timeframe is pretty extraordinary and could be double what you'd get for a long term tenant in that time frame. I've always considered an investment with a hybrid strategy where there's a 6 month lease for someone from May-Oct and then short term renting it for the other months because there is a ton of upside there. Owners that just own a property and rent as a short term rental from Nov-April aren't going to get too many bookings in the summertime. *Unless* the property has incredible location and amenities, where it could still get rented out thru the summer slow season.

Renting to Phoenix Snowbirds w/ 6 Month Rentals or Airbnb ?

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