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This episode is Part 3 of a 3-part series on the topic of short-term rentals as investment properties, not just with investors buying single-family homes but short-term renting in your own home and the effects that it has on the market.
You can also listen to this podcast episode HERE!
The short-term rental world is full of myths infused by the fear of people that invest and are afraid of losing that investment.
Excuse #5 deals with the idea that is that it is more likely to have a good tenant in a long-term rental rather than have them in a short-term rental.
From my own experience since 2015 I have had about 400 guest reservations. There is always going to be someone that has an issue with something. That is perfectly fine because it is impossibe to please everybody.
However, they leave, and financial transactions are made before the tenant enters your property. This is in thanks to AirBnb, or the platform you are using. Therefore, you just have to worry about providing the best service you can give to your guests.
99.9% of the people that have stayed in my Airbnb(s) respect the property and respect my rules too. So this myth that long-term tenants are better than short-term guests does not ring true for me. It is true that the guests may move your furniture around or leave something in the wrong place. Maybe when checking the property after your tenants left, you find that there are items missing. That comes with the terriotory when renting but it certainly the exception rather than the rule. I will say that since 2015 I have never expereinced a guest stealing from my Airbnb.
Super host your way to consistent cash flow
I am a Super Host because I have learned from my mistakes. I have done my homework and make it a priority to know the ins and out of short-term renting on Airbnb. It does not take much to be a host. However, to be a great host and earn the title of Super Host (from Airbnb) then set yourself up for success and consistent cash flow by being responsible, have an open vision of the market in which you are working, and be honest with your guests and yourself.
Earnings: Long-Term vs. Short-Term
I have been asked several times why I choose to have a short-term rental when a long-term rental may offer more consistent cash flow. With a long-term rental the monthly rent is the same. Short-term rentals are different and thus do not typically offer the same income each month. You have to keep in mind that income from a short-term rental will not be the same every month. However, in time it will be more predictable becuase you will be able to gauge the market and see the demand for your area.
Typically, if a guest cancels their reservation on a short-term rental you are only losing a very small percentage of your annual income. Therefore, becuase it’s such a small amount it becomes more predictable than if your long-term tenant vacates the property without notice. In that type of situation you may end up losing up tp 20% of your annual income. It takes time to find another tenant and run background checks!
If you learn how to project your rents you will see that even though traditionally long-term renting would offer more consistent cash flow, short-term renting can prove to be consistent on top of bringing in more annual income.
What will make you a professional Super Host of short-term rentals is knowing how to read YOUR market.
It is recommended that you do not have a flat rate for the whole month. Market prices fluctuate and it is a neccessity to test your pricing in orer to stay booked. The hotel industry does this reguarly. Airbnb does offer “smart pricing” but you will need to evaluate this in order to find a balance. Acquiring an an acceptable profit means having more consistent reservations.
Until next time…
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