Hey Everyone! My partner and I have seen a couple of UTube videos lately where the speaker is recommending leasing properties to list on Airbnb instead of owning them. We just aren’t sure this is the best idea and wanted to know if this is a common thing! Thanks! Janet
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Expect your landlord to evict you UNLESS your lease agreement specifically allows short term rentals. Those fools on YouTube are promoting violating your lease agreement for a short term gain. Yes, you can do that BUT eventually the landlord, HOA, neighbors, or city will find you. Then you will be faced with eviction, if you’re lucky, the owner won’t File a lawsuit for violation of contract, and the city won’t levy fines & penalties & taxes.
If you buy something check local & Home Owners Association regulations/rules so you can stay in compliance.
BTW you will find threads on this topic on this website. The hosts that are trying their best to follow rules/laws/statues/taxes etc. were very vocal in discouraging STR sublets.
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Assuming it’s allowed by the lease contract and the local government, what you lose out on is the equity growth in the property. For whole-place Airbnb listings where a property manager is taking a fair commission on the payouts, the equity growth may be the only “profit”, and that’s without the additional profit markup the property owner will add onto your lease.
Another thing that seems like it would be problematic is acquiring appropriate short term rental insurance on the leased property.
I’m not saying it would never be possible or practical, but it’s far from a sure thing. Have a very detailed business model in place before you sign.
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And be aware that Airbnb has been around for 10 years and a lot of markets are seriously over saturated.
Many cities are now legislating to prevent the rise and rise of STR’s, which can kill your business. It is not an easy way to make money and your reputation rides on every stay.
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You would need short term rental insurance which you cannot get unless you’re the owner. I think it’s best to purchase a property than to lease because the owner would be liable and that’s not fair to him/her. I personally would not lease my property if I knew the person wanted to use it for Airbnb.
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Avoid those “rental arbitrage” hucksters on YouTube.
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Yes, you can get short term rental insurance if you are leasing the property. Proper has one for this type of short term rentals. We lease one property from a friend, she has landlord insurance on the property and we have sublet short term insurance from Proper.
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You have to run numbers yourself. In some markets you can’t charge more than $80 a night for a full condo (the profit comes from equity built) while others might have enough gap between property rental and short term rates to make it self-sufficient.
Whenever I see people making money off the “idea” of a business rather than the actual business, I take what they’re saying with a huge grain of salt. If those YouTube folks are making so much money off their arbitrage business, why are they devoting time to videos rather than taking on another property?
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