Allowing Someone to use my rental property as a short term / Medium Term Rental

[Adam Walker]

I have a 2/1 800 sq ft, house in Durham, NC. I have been unable to rent it for about 5 months now and I am not seeing the price point I was desiring when I closed on it (around $1700-1800). Currently property management has it listed at $1450 and still struggling to get a renter in even during the summer season. My mortgage on the property is $1773 and it is a brand new construction. 

Today I was approached by someone who is offering me around $1800-1900/month to rent the property from me to run a short term / medium term rental out of it, primarily for traveling nurses or other business people. They would pay all utilities and maintenance on the property and provide 2 months security deposit. 

My question is, is this to good to be true? Should I have concerns or is this a legitimate opportunity? What are the questions I need to be asking? 

Thanks for your help everyone! 

 

[Stephanie Walker]

The risk is the same for an unqualified "operator" of STR/MTR and an unqualified tenant. Their goal is to use your property to make a profit. If they can't make a profit, they are still on the hook to pay the rent. If they don't have the money, they won't pay the rent and you'll need to go through the proper steps and channels to evict. You need to make sure they can qualify to afford the rent regardless of whether or not they make a profit on your property. Think of it this way when you're going through the qualifying process: can they afford the rent for your property plus the rent/mortgage where they live? Most PM companies have a requirement where the tenants income needs to be 3x the rent per month.

There’s more to it than that - but it’s a lot to type out.

It's a popular strategy for those looking to get into STR/MTR and can't afford or can't qualify to purchase a home themselves.