All Forum Posts by: Kim Becker

We are seasoned Airbnb hosts and long-term landlords who are pivoting to monthly rentals.  Our first bite was ALE solutions, a relocation agency who contracts with Liberty Mutual to locate properties for displaced claimants.   The claimants need a place for 6-8 months. ALE, who actually pays the rent,  wanted us to sign a 6 mo. lease.  We stated we only do month-to-month. They agreed to that. 

After doing background and reference checks we drafted and signed a month-to-month lease with the claimants (tenants) as required by ALE. Tenants don't appear to be high risk, though they do have 3 cats. The terms are great, with a large non-refundable cleaning/pet fee and generous rental rate.  HOWEVER.....

Today I get a "Payment Letter of Commitment" from ALE that I am supposed to sign.  It states this:  "All extensions will renew on a month to month basis at the same rate with ALE Solutions, Inc having the first right of refusal."   What does "first right of refusal" mean in this case?   Does it mean that if we want tenants out before ALE does, they have power to negate that action?

Then this statement: "To the extent that the Lease terms are inconsistent with the terms of this Payment Letter of Commitment, the terms set forth herein shall control."  So ALE terms supercede whatever is in our lease agreement.  Are we losing control of our property?  

Am I understanding this correctly?

We are transitioning from Airbnb to corporate month-to-month rentals. We already have an inquiry for a 5-month stay. One requirement we have is a complimentary monthly cleaning with maintenance inspection.  Is there any legal issue with this?  The property is in Florida - I did an online search and can find nothing.  

I use VRBO and Airbnb for our listing. Much prefer Airbnb! I can better screen guests, as there is an option to upload an ID to their website, which we don’t see, but is verified by Airbnb. We require it for our listing. Typically more active communication with Airbnb and a review is almost always submitted by guests, which we want. With VRBO it’s typically less communication and often have nooo idea who our guest is. They often don’t review even it they loved your place. Airbnb app is awesome and streamlined. VRBO lags behind with website and app. If you want to fill less busy times you need to get creative and do some marketing and market research yourself. Would the property work for business travelers or nurses? Are there sports events, hockey, etc? Don’t depend solely on the standard platforms. Talk to bigger employers, medical centers etc and let them know about your listing for visiting staff. One parameter we have for any STR potential listing is that it must attract other demographics besides vacationers. We don’t want to put all our eggs in that basket.

Michael Davis- Your best bet for rental arbitrage is stand alone units- as in full apartments, house, condo. NOT on the same property as the landlord. After having done Airbnb for a full year, I could imagine a host of potentially terrible situations if the landlord/guest were on the same property. Just my humble opinion, I’m not nearly as experienced as many on this forum.

Whoops should have specified which Michael! Michael Melendez, I’m definitely on the same page with your post. I was addressing Michael Davis, who mentioned rental arbitrage with a private room in someone else’s house. Which I think would be extremely awkward and a huge can of worms. Maybe it’s out there, but I hadn’t heard of it.

Not really understanding the vehemence against rental arbitrage here on this thread. It’s happening everywhere; it’s a great business model as long as Landlord/Lessee are on the same page and there is proper insurance in place. The main competition I get in my area is from those doing this exact thing. I own the property that we list on Airbnb, but looking to find a good rental arbitrage situation as well. Michael, I’m not sure how realistic it would be to find private rooms to rent and then sublet, that’s a curious business model that I hadn’t heard of. I’m only aware of subletting with stand alone units. Also true that everybody and their brother is jumping into STR, creating a glut and forcing us to price our units unrealistically low. Even with lower rates, we are making a good return, but wonder where this will all go in years ahead with oversaturation and regulations.

Peter I agree with your assessment of the Saint Pete area. We travel Florida on business and think it is awesome. Some great little neighborhoods right on the beach that have that retro beach vibe going. Recently the Florida state legislature renewed laws that kept municipalities from imposing any new regulation on short term rentals, the only laws applicable are for those grandfathered. So I'm not understanding your comment regarding regulation. Are you referring to HOA's? I realize that is a horse of another color. Could you elaborate?

Originally posted by @Peter Miller:

I highly recommend the Pinellas county beaches. (St Pete Beach, Treasure Island, Madeira Beach, Redington Shores, Clearwater Beach, Dunedin). 

These areas are so underrated!

Anna Maria Island, Bradenton Beach, Sarasota and Siesta Key are really nice too.

Have to be careful about doing VRBO's in these areas though, every municipality has recently been adding new regulations on minimum rental requirements.

Love it!  I messaged you. 

Originally posted by @Aaron K.:

@Kim Becker  my thinking as an owner would be that once they see the success of your business it would be only too easy to not renew your lease and take over if they wanted to.  Also unless they have heard of this style before or you in an area where STRs are in demand it will be difficult to convince them that this is legitimate.  I as an owner would also make the assumption (maybe incorrectly) that the host would not be able to pay the rent if they didn't get any short term renters.  In addition I would be very concerned about liability.  If you approach an owner I would also suggest showing them the relevant state or local regulations so they understand that everything is legal.

 Good point re:  concern for being able to make the rent should bookings not meet expectations.       If a host approached me on my long-term rental, I would be looking at their track record and history more than anything. Because the host would definitely make or break the success of the venture. 

I have left no rock unturned re: insurance and regulation, as that Would be my top two concerns as a property owner.   That’s covered.