2018 Guide: Taking The Work Out Of Short-Term Rentals
There are a lot of costs which come with owning property. You’ve got care, maintenance, taxes, HOAs, repairs, advertisement, neighborhood relations, and the list goes on. If you want to get the most out of your property, you’ve got to take these things into account, and plan for them. One aspect of being a landowner that is especially considerable in this arena is subleasing.
If you’re not familiar, subleasing works like this: you’re a landlord with a property, and you’re renting said property to someone who signed a lease with you. In turn, the individual who signed the lease with you makes an arrangement with someone else to use the property over a limited time. This is often done during vacation.
For example, say you have a tenant in a building in Hollywood. Now say that individual has a bit part in some television series shooting out of state for a few months. That person may sublet while they’re out of town in order to recoup the rental costs on their unit. While this could work out great for them, it’s not so good for you as a landlord.
What kind of individual will stay in your lessee’s apartment over their absence? Do they know? Do you know? Who knows? Well, there are ways around this difficulty. Where it is legal to sublet, a wise plan of action involves acquiring services specifically designed for leasing over such short periods of time.
Solutions Designed For Short-Term Rental
Working with groups like Rentbelly can help you take control of subleasing, or “short term rental”, as it is called: “Rentbelly is a web-based services for building owners, property managers, and HOAs that enables you to implement and enforce your community’s Short Term Rentals (STRs) policy.”
If you’re savvy enough with a solution like Rentbelly, you’ll be able to double-down on the profitability of your property. For example, you may allow a lessee to sublet, provided they sublet at a higher price than they pay.
This has a number of advantages. Firstly, it’s likely to attract a higher quality of subleasing individual. Secondly, you see greater profit for that which you’ve invested. Thirdly, you increase your revenue. Of course, you’ll need to match such price expansion to the market—it may or may not be feasible to charge more. Just ensure you pay attention to the market.
Additionally, you can use short term rental strategy to ensure units are filled with individuals when the rental market is in a slump. Of course, if you’re in an area like Los Angeles, this is less likely to happen. But every region has ups and downs. In the wake of the 2008 financial crisis, housing in Hollywood dropped like a stone. Anybody savvy enough to buy at this time, and sell a few years later, could very easily have seen some substantial profit.
Overcoming Entropy Through Strategic Property Maintenance
That’s one of the prime considerations when it comes to property ownership: the long-term game. You want to upgrade your property continually; install a DIY deck if you can, or maybe institute some “green” renovations as they’re appropriate. Whatever suits you. Only, don’t leave your property to “tread water”, as they saying goes.
The sun will steadily erode your property. Natural wear-and-tear will as well. Pests will creep in. Appliances will break. Entropy will prove a scourge if you’re not careful to manage it. As a landlord, you’ve got responsibilities. But it is possible to reduce the load and increase profit through organizational solutions designed specifically for such a purpose.
Property management can be a great way of maintaining financial stability over the long run. If you put the work in, you will see your investment maintain its value, and you’ll even see return on that investment over time. But property is an asset which is perhaps the least liquid of all assets—it is by definition stationary.
So last, but not least, whether or not you sublet, ensure that any property which you acquire has been strategically purchased such that natural ecological and economic realities don’t knock you out of the game before you get a chance to truly make an impact.