How To Make Money with Short-term Rentals

???So, what types of short-term rentals are there??There are obviously vacation rentals, the VRBO or Airbnb.??You can do short-term rentals, and it’s very lucrative.?I’m always going pro and con with this.?The pro is you’re going to make more money, and you’re going to cash flow better.?The downside is you also have to have property management, and the TI (tenant improvement) support.?The more frequent, the more TIs and management you’re going to have to have.

????I’ve seen a lot of single people that have a beautiful home.?They rent by the room in high construction areas.?That’s a huge one.?In the Boise market, we’ve been up there the last few years, and really doing a lot of projects, so they’ve need to move in a lot of workers.?So, folks that had three extra rooms, they rented it for five-seven hundred dollars a month.?You tap three rooms, at 700 bucks, you just made an extra 2,100 hundred dollars a month and created a primary residence into a cash machine.?I would put an entity around that, even if it’s your primary residence, now is the time to make it an LLC.?Because now you’ve got liability in your home called three renters, or two renters, or consistent flow.

????The other thing, just in general about structure, the mor frequent you have humans, which are a huge liability, you want to wrap the assets into an LLC.?So, if anything happens at the property, they can’t sue you for the actual home.?They can’t sue you for a whole variety of other things, anything else you want.?So, you want to lock up your assets and liability in the right structure.

????Tiny houses have been on the total growth.?And they’re also things that you can put on your property.?So, if you have a large enough property, if you had five acres, you could probably put two or three tiny homes out there and rent them.?You can do short-term or long-term.?But now, you’ve monetized your property.?So, all sorts of ways you could do short-term rentals, and reconstitute a property into making money.

????Glamping is just living in a trailer.?With the pandemic, it has been fascinating to watch the amount of really high net worth people do a sell-off.?Buy a 200,000-dollar RV and go glamping to go to park to park to park.?They go whether it’s mobile home parks, to camping parks.?They travel around, and it’s called glamping.?You could also rent out your campers now.?I know some people that are renting out their RVs, renting out their boats.?People are willing to live in various situations.?I have a client who Airbnb’s their boat, and a lot of people want to check out boat living.?So, they’ll rent it for a month.

????How do you get started in Airbnb??Well, if you don’t have any money or means, you could be the manager in between.?So, you could find people who own their own properties, who want to convert their property into an Airbnb, and represent them, and then you run the ads to find the people to come and rent.?If you just do the management and do the fulfillment to make sure they are full all the time, you can make 10 percent-ish, kind of in their eight to ten percent.?If you actually do all the turn, where you are coming in with the cleaning crew, and every time doing the cleaning and making sure that all the dishes are working, and the electronics are working, you can get up to 20 percent of the rent.

????Airbnb arbitrage is something that a lot of young folks are doing, just to get into it.?You know there’s a little creativity, and I’ve suggested this to a few clients, is why don’t they, instead of taking 20 percent, take that extra 10 percent, and if the owners are open to it, earn some equity into the property.?That’s the way you can start earning equity into all these projects.?So, you’re an actual owner, not just sitting in the middle arbitraging.

????You can sublease an Airbnb if have to, because in some HOAs, and some towns, they’re banning Airbnb’s.?The suburb areas don’t want visitors turning in their weekend homes, and the people living there full-time are complaining.?They rather have a six month or year renters, and have a consistent neighbor, rather than having strangers come and go, come and go.?So, be very careful where you select.?I would get to the building planning commissioners.?I would get to the chambers.?I would find out what’s going on in the town, and is it really a long-term opportunity, or a short-term opportunity, depending on what’s going on in the town.

????How do you get OPM (other people’s money) for short-term rentals??If you have good credit, go down to your local bank.?They’re actually still some of the best interest rates you can get in this environment.?There are extra fees for using mortgage lenders, and if you don’t have good credit, go find somebody who has OPC (other people’s credit).?Maybe you have the money, and they have the credit.?Together you can do a deal.

????OPM is everywhere.?There is so much cash on the sidelines right now, with the market the way it is, crypto the way that it is.?You could get hard money loans from other people.?You could get funding, zero percent financing for 21 months, that’s my favorite, because it costs you nothing, but good fundability.

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