Should I rent my Warner robins House as a short-term rental?
Many landlords have heard that Short term rentals are making big money, but is it worth it?
Short term rentals used to be reserved for mom-and-pop landlords in tourist areas near beaches and mountains. AirBnB and VRBO platforms have now opened this industry to the entire world. Anyone that needs a space to rent larger than a hotel can now get a room or whole house for comparative cost of a hotel. Many people are now asking, “Should I rent my house as a short-term rental”? Let’s look at what a short-term rental requires and you decide if it is right for you.
Hospitality comers first
First of all, short term rentals fall into a “hospitality service”. The landlord is providing short-term living accommodations for a tenant (usually for a month or less). The landlord will be responsible for expenses that are normally paid by a long-term tenant:
- Phone service
- Small maintenance job
This will add to the overall cost of operating the rental.
Prepping the house for tenants
In addition to covering the cost of operating the house, the landlord will need to furnish the house. These tenants may stay for only one night or a couple months. Just like a hotel, the landlord will need to provide all the furnishings like:
- Basic furniture
- Towels and Linins
- Pots and pans
- Cooking utensils
- Washer and dryer
- Dish and laundry soap
Some of these items on this list are, of course, optional. Some areas, it is not custom to provide bed linins. It depends on the type of client you are accommodating and what your competition is offering. A downtown house may need to provide items for more business-related clients while a beach house will provide more fun items.
Tenants (guests) in a short-term rental will be leaving in the morning and the next tenant will be arriving after noon, the house will need to be cleaned and prepped for the next guest. A landlord will need to be ready to clean the house in a small turnover timeframe (3-5 hrs.) or have a cleaning crew ready. Also, like a hotel, guests will sometimes have issues that need to be addressed at odd hours. Guests may call for leaking plumbing or an AC unit not cooling at midnight.
Making the money
After all the work required to turn a house into a short-term rental, there is some money to be made in the wake of all this headache. The market for short term rentals relies heavily on the area and the market conditions. Make sure to answer these questions first:
- What kind of travelers are coming thru the area?
- When and how often do they come thru?
- Is the traffic in the area seasonal?
- Will the economy affect the number of travelers coming thru the area?
Most cities now have short term rentals already operating in the area. Check to see what the average price per night landlords are charging for a comparable house. Next, calculate the total monthly cost of running the house as a short term rental. Now, divide that by 13 (this is what I use). That is the cost per day for operating the rental short term. If this number is equal to (or less than) the comparable nightly rate to rent the house, chances are good for renting. This shows that the house only must be rented for 13 days per month to cover all operating costs.
Example: A 3-bedroom house rents for $121 per night. The owner’s cost for mortgage, internet, lawncare, etc. is $1275/mth. 1275/13= 98.08. This house will make money. Another way is: $1275/$121= 10.5. This house will break even if rented for 11 days. The rest of the month is profit.
Every investor has different goals. Make sure the extra time and effort is worth the extra money this may make. Free time is an asset too.