GET RICH! (or die trying?!) SHORT TERM FURNISHED RENTALS - A discussion

[J. Martin]

I have been speaking with short-term furnished rental owners who rent to workers or other travelers, and operate near national parks like Yosemite, in urban areas like Oakland and San Francisco, the desert and coastal communities like Palm Springs and Venice Beach..

THE COMMON THREAD IS THAT THEY TEND TO PULL IN 2-3 TIMES THE GROSS RENTS OF AN UNFURNISHED LONG-TERM RENTAL

I WOULD LIKE TO BRING TOGETHER AND HEAR FROM THE SHORT TERM RENTAL BP COMMUNITY ABOUT THEIR IDEAS, WHAT THEY ARE DOING/OPERATING, WHAT THEY ARE CONSIDERING BUYING OR OPERATING, AND ANY AND ALL DISCUSSIONS ABOUT SHORT TERM RENTALS.

From vacation rentals w/ bikes and toys, to super-high-end corporate rentals for tech employees in Silicon Valley, to families near the lake, medical students or workers on rotation, and oil field workers who need a home away from home...

THERE IS A NEED FOR ALTERNATIVE FORMS OF HOUSING FOR NICHE TYPES OF WORKERS AND TRAVELERS ALL OVER THE US AND THE WORLD.

I have seen apartments, hippie trailers, house boats, towering castles, spectacular lofts, tiny homes, dirty couches, teepees, yurts, and impeccable $2MM+ homes and estates.

I've personally stayed on VRBO type places in a boat on the canals of Amsterdam, a castle in overlooking the Rhine River in Germany (on the way to Oktoberfest ;) , an old apartment overlooking Al Duomo in Florence, and w/ a wonderful couple in a Rome apartment with cathedral ceilings on a busy alley a stroll from the Vatican. I think high-cost metro areas (and or tech/liberal) like San Francisco, New York, Austin, Portland, Seattle, and many more would be good targets...

PRICING ABOVE ANY NORMAL LONG-TERM RENTAL, BUT GENERALLY BELOW AN EQUIVALENT HOTEL RATE CAN CREATE SIGNIFICANT ADDITIONAL INCOME FROM THE PROPERTY.

BUT ISN'T THIS TOO MUCH WORK??

It's all about systems:  ****TIPS*****

1) Set up the space right, and get everything you need - 3 sets of all linens, iron & ironing board, hair dryer, extras of stuff for them..
2) Have a thorough ad, that answers all questions, w/ FAQ. Have prepared PDF's/ emails w/ local things to do, options from airport, entering unit, etc..
3) Use keypads and lockboxes - so you don't have to be there!!!
4) Find a local cleaner. Ask neighbors. Message other AirB&B hosts. Having someone local or already coming out saves everyone money!

BUT AREN'T THERE A LOT OF COSTS?

There are very few fees for AirBnB. I have not tried VRBO .com yet or any other sites. You charge the guest the cleaning fee. You just need to replace linens occasionally, plus the cost of set-up.

I WOULD LIKE TO BRING TOGETHER AND HEAR FROM THE SHORT TERM RENTAL BP COMMUNITY ABOUT THEIR IDEAS, WHAT THEY ARE DOING/OPERATING, WHAT THEY ARE CONSIDERING BUYING OR OPERATING, AND ANY AND ALL DISCUSSIONS ABOUT SHORT TERM RENTALS.

I'm not selling anything, or doing any seminars or coaching regarding this. I just think there's a lot of opportunity in this sector. I'm also not advocating people dive into this w/o due diligence. But I see big potential opportunities.

I have 2 short-term rentals now. One on AirB&B w/ about a 5 day average stay approaching $10/sqft/mo during heavy traffic (w/o kitchen or living room), and a short-term furnished rental to international students earning a good return, as a test.

What are you doing? Considering a master lease to operate short-term rentals? Leasing out a trailer or extra bedroom? Planning a short-term rental community or business? Let's hear it!!!

[Evan R.]

I've been tracking three markets for vacation rentals since August; Mammoth Lakes, Temescal in Oakland, and the area surrounding Dolores Park in San Francisco.

One of my favorite graphs is vacancy rates. Temescal and Dolores Park track each other pretty well. Mammoth isn't doing too well with vacancy rates around 85%. 

Price per night is flat in Temescal, while being more volatile in Dolores Park and Mammoth. 

There is very little churn, or growth in the three markets. Churn is when hosts leave airbnb, and growth is new listings. Rather than show the graph for growth/churn for the last couple months, this is growth/churn for Q3 with a line fitted. 

Temescal and Dolores Park are growing faster than expected, while Mammoth is down. Bay Area growth could be attributed to the Dream Force conference, Mammoth's decline could be operators quitting after a dry summer with many fires. 

Where this data gets really useful is calculating gross rents. Looking at the average vacancy rate and average nightly rate, we can estimate gross rents. 

From talking to people about rental prices, the Temescal gross rents are higher than long term rents, while the Dolores Park gross rent is around the price of long term rentals. 

Let me know if you have any questions!