SIX WAYS TO SCORE SIDE CASH IN THE SHORT-TERM RENTAL MARKET
These days, the news is all about The Great Resignation, reporting that scads of employees are leaving the daily grind in search of fulfillment. Whether you have a conventional gig or not, a side-hustle is always a good idea, and working with short-term rentals is an area with plenty of potential opportunities.
RENT ARBITRAGE allows you to rent a property with the intention to sublet it on vacation rental sites. To be viable, the rental needs to generate more than your monthly “nut”, the total combined figure of your living expenses.
If you’ve ever watched a Woody Allen movie or a “Seinfeld” episode, you know that in many cities, the search for a sublet becomes predatory.
NEED TO KNOW: Some cities don’t allow subletting, period. Assuming that you’re interested in renting where sublet arrangements are permitted, obtain written permission from the landlord before advertising the property. Many landlords are not receptive to this arrangement, so tread lightly.
Read the fine print. Many long-term rental agreements prohibit tenants from listing sublets. Failing to follow any of these rules puts you at risk of being evicted, so research thoroughly before posting your rental site.
SHORT-TERM MANAGEMENT of an Airbnb can be the definition of easy money if the situation is right. Managing an Airbnb requires that you make yourself available to the property owners, property inspectors, and of course the renters. These are important responsibilities -- do you know how to get a rattlesnake out of a kitchen cabinet?
NEED TO KNOW: You may need a real estate broker’s license and/or a property management license to legally do this work. Although the work is not as repetitive as your average office job, managing multiple properties can be stressful.
You’ll confirm bookings, supervise check-in and check-out, and market the property. One of the potential challenges is dealing with the renters themselves, who usually bring a short-timer’s attitude to their stay. Be sure that the pre-rental condition of the property is documented with current, accurate photographs.
CO-HOST AN AIRBNB to get your feet wet in this potentially lucrative side-hustle. This role is more like an assistant to the host, versus being a manager. Your tasks will be administrative and maintenance-heavy, from resolving credit card charges gone astray to making sure there’s plenty of TP in the bathroom cupboards.
NEED TO KNOW: Co-hosting is not as demanding or as profitable as managing or arbitrage, but it’s an excellent way to get your first taste of the experience. You don’t need a license.
JOIN A VACATION RENTAL FRANCHISE if you don’t want to start from scratch. By joining a vacation rental franchise, you pay a fee to obtain a special license from an existing franchise owner. This enables you to use their resources and sell services under their brand name. Because the territory and process are already defined, your chances of success are increased.
NEED TO KNOW: You’re not in charge. Branding guidelines are established by the franchisor, with the expectation that you follow them. This arrangement does require commitment. There’s an initial fee which is usually substantial ($55,000 - 100,000), and typically you’ll need to sign a contract for a set number of years.
ARE YOU EXPERIENCED? With props to Jimi Hendrix, if you already know the ropes of managing Airbnb rentals, consider becoming an Airbnb consultant. Find your niche, then market yourself to hosts.
NEED TO KNOW: This is an entrepreneurial role, and as such requires several key elements to result in success. Quite obviously, you need to have the needed expertise. You also need to be a self-starter, since you’re your own boss. For someone (you?) who’s got fire in the belly, this is a great arrangement.
DO THE DIRTY-WORK: Start an Airbnb Cleaning Service if you’re interested in serious cash. Cleanliness is a make-or-break issue for renters. Filth is a universal topic of complaint in the Airbnb world. This means that there is no shortage of work for skilled crews who will make a rental smell fresh and sparkle inside and out.
NEED TO KNOW: Any time you plan to employ people, check on the state regulations. Insurance and licensing requirements vary and must not be ignored. Develop a realistic operating plan before marketing your services. For example, you don’t want to pay retail for your paper towels! Your success will also depend heavily on the work-ethic of your team. While professional cleaning is far from glamorous, there is satisfaction to be found in this hard work. Compensate fairly, and incorporate employee kudos in your marketing materials!