All Forum Posts by: Ravi P.

@Jen Faulkner

You may find more information if you look up Short Term Rentals or Vacation Rentals. You would be operating under the same concept but corporate housing targets a particular niche.  

I do not have any short term rentals but I guess you can operate it as you see fit . I think it would make sense to have a starter kit, and then communicate to the tenant if they are responsible for replenishing it.  

As for rates, you can charge or quote on a nightly basis,  but give breaks the longer they stay. if a guest would like to stay a month, and you state $100.00/night or $3000.00 for the month. what sounds better?  I think this can avoid the sticker shock.  As for one night stays, I would quote a rate that would make it worth my time and cost for a one nighter.  getting the room serviced for a  1 night stay requires the similar amount of work to someone staying a week.  I feel this is why you would give a break on the rate for longer term stays.  

If you haven't already checkout AirBnB or some of the other vacation rental sites.  When it comes to Corporate housing, look up AMLI. They have properties nationwide.

Ravi

 Mary thanks for your wisdom.  You make a great point, a deal should work as a LT rental first before even considering it as a ST rental.  Most investors financial models don't take into account that state and city rules may change.  Also there is another variable, AirBnB's business model may change.  Most online travel agents charge hotels anywhere between 12 and 30% for bookings.  This may be the case with AirBnB, once established they may feel the need please there Private Equity shareholders.

@Rahul Visal,

Self promotion or not, 53 properties in 2 years is nice. Do you think you could continue at that pace? I cannot see properties appreciating like they have in the last 2-3 years. I feel like the easy money(appreciation) has been made. This is what allowed many investors to cash out and purchase additional units. The BRRRR concept that has been discussed in other post.

Since your considering to convert all your properties to AirBNB properties I assume the Incremental revenues are worth the extra time you are putting into your rentals. Or do you have some type of management company or in house operation? 

@Samson Kay,

Its a nice property.  Everything a short term rental would need. Does it include a Washer/Dryer?  I see a $300.00 furniture rental  in your OP, what does that include.  You don't have to disclose it, if you are not comfortable.  

I am just trying to get a better idea of about ST rentals.

Ravi

Samson never indicated what type of rental he has. 1BR or 2BR.  $125.00 for a 2BR or even a 3BR would be a great rate for a family or group visiting DT Chicago, Cubs Game, or even Lollapalooza.    Also, Uber and Lyft make everything convenient.  I figure a Uber from Humboldt to DT Chicago is less than $20.00.  CTA is now $5.00/person/trip. All day pass is now $10.00. And you don't need to worry about getting mugged. 

@Samson Kay, 

My understanding is that you will be flipping short term rentals and retain the operating agreement with the buyer to manage the property?  This is similar to the Condotel model that was popular 10 years ago.    

Also based on your numbers you did not include cleaning and maintenance. Which can add up quickly, considering that these are short term guest you would need to service the unit after each guest's stay and possibly during their stay.   You also mentioned that you began this in May.  Hotels in Chicago also tend to have the highest occupancy and ADR from May-July.  This summer was banging for hotels in the Chicagoland area.  I will also make the assumption that majority of AirBNB travelers are leisure travelers and not business travelers.  As hotels will continue to be busy until October, I am curious to see how well your ADR and Occupancy will be.  

I included a link below to ChooseChicago.com. It will give a better idea of rates and occupancy for Chicago hotels.  You can piggyback on their rates.

http://www.choosechicago.com/articles/view/monthly...

I am still not sure how much a premium I would pay, and how much a bank would be willing to lend on this without historical and projected income.  This may also be why banks cautious to lend on independent hotels/motels.  

Perhaps someone with Vacation rentals can chime in and provide some valuable BP insight

Samson, 

Welcome to Chicago and congratulations on the purchase. 

I like your out of the box thinking! I have been exploring the AirBNB/Vacation rental concept.  I never thought about selling them as turnkey properties/businesses and not sure why somebody would want to buy them.  

There is nothing proprietary and you cannot guarantee income.  You don't know how much rental income you will be generating this winter? how much would you pay for your future rental income?  I think you could market the rental as a feature of selling the 2 flat.  Buyers who are purchasing 2 flats that are not occupying both units would be renting it out anyways. You are just taking advantage of the arbitrage between rates of short and long term rentals.

AirBNB and other Vacation Rental sites are open to anyone.

Why would a buyer want to pay a premium to something they can do one their own?  I am not trying to knock your idea, but if you can this, then maybe you are on to something.

Back to your Winter Rental income you should be able to rent your unit, it just depends on the rate your are willing to accept.  

12 months prepaid rent sounds tempting! I recommending proceeding with caution. I recently completed a City required Crime Free housing course for a Buy and Hold.  This is an approach Gypsies use to get around the background checks.  Once they receive keys they will move 12 people into a 2 bedroom apartment.  It is  difficult to verify occupancy fraud .  They will claim they are visiting family and raise hell for the neighbors.  

Good Luck!