People are always looking for ways to earn money from real estate. They can go one way, such as buying one of the homes for sale in Central Florida. That, however, is a long-term strategy for making money. Instead, these people can buy a home with an eye to renting it out for monthly income. They can do this either directly or through a short-term stay website like Airbnb.
In whichever city they buy these homes, they can try to take advantage of the stories of owners “raking it in.” This is especially true if their properties are conveniently located, well-kept, and gorgeous. Of course, not all people can retire on rental income, particularly if they’ve bought a property to rent it. Homeowners, both old and new, are, however, taking advantage of the market to rent their properties in the short term.
The most popular short-term rentals might bring $500 or more a night. Even less popular properties could fetch $100 to $200 a night. Owners looking to rent must remember all of the costs associated with maintaining the property, paying for insurance, and furnishing the property, or even paying a mortgage on it. Making $6,000 a month, or $200 a night, won’t be $6,000 on the 30th. Still, the market is there, and savvy homeowners might gain a comfortable income even if they’re not “making a killing.”
Market Characteristics
Where the property in which you’re interested lies is crucial. Based on where you are planning to have your short-term rental, there might be different reasons people will want this type of accommodations as well as potentially some rules. For simplicity’s sake, call the three kinds of markets metro, national vacation, and regional vacation. Metro markets, such as New York, Los Angeles, or Chicago attract visitors for a variety of reasons: tourism, business, and “lots of people to visit.” “Uncle Phil” might have to stay in an Airbnb because there’s no more room at the family house, for example. The chief disadvantage to offering a rental property in such places is that the hotel industry is firmly entrenched, and many travelers seek the best deals they can on various travel websites.
National-vacation places have a smaller section of the pie for “sisters, cousins, and aunts”, but they correspondingly have a larger section of the pie based on tourism. Places like Orlando and Fort Lauderdale are prototypical. In places like these, residents often, just for fun, rent a place they don’t have to clean or take care of, but still have the accommodations such as a kitchen and laundry room. Many “staycations” include such short-term renting.
The income of owners who rent in regional-vacation places is almost entirely based on tourism, largely from people who can drive there. Bridge players, for example, descend on Gatlinburg, Tennessee, every April for the largest and most popular regional bridge tournament in the country. Many bridge players enjoy the peace and quiet provided by a short-term home rental rather than the hustle and bustle of hotel life.
Owners who offer short-term rentals should try to differentiate their properties from those of their competitors. Otherwise, one $200-per-night property looks very much like any other.
