DO YOU CURRENTLY OWN A BUILDING WITH EMPTY UNITS? With the traditional tenant system, It’s hard for landlords to keep properties at-capacity all year long
Semi-occupied buildings can be frustrating, and every day without a tenant is lost profit. Luckily, there’s another option: the short-term rental. Popularized by websites such as Vrbo and Airbnb, this rental model offers many unique benefits for landlords seeking to fill vacant spaces.
Primarily, it is the short-term rental model’s significantly heightened profit margin which encourages homeowners to start leasing out their spaces to temporary guests. How much more can be made with a short-term rental? Here’s a quick and clear example:
In central Philadelphia, the average rent for an 800 square foot apartment is around 1,500 dollars. In a 31 day month, this means a landlord’s profit (pre-expenses) from a traditional renter is about 48 dollars a day.
A similarly-sized Philadelphia apartment on a short-term rental site like Airbnb will rent for 70-150 dollars a day, dependent upon the location and amenities. Assuming a median price for this short-term rental, say, 100 dollars a day, the property will therefore be over twice as profitable than the traditional renting model, if occupied all-month long. For deluxe properties, or those in high-demand areas, the landlord need only rent occasionally to bring in a much greater profit for than a traditional lease.
If you’re interested in turning your property into a short-term rental but this all sounds a bit too new for you, not to worry— there are a multitude of products to make the transition as smooth as possible.
The housing market may be moving toward the short-term model at lightning speed but luckily, so are the services which take the guesswork out of the process for landlords and property managers. 24/7 remote check-in devices, short-term specific laundry and cleaning crews, various associations and meetup groups of landlords in this business, all these things exist to facilitate the transition from a year-long to days-long lessees.
This profit margin soars when other amenities, not usually included in regular tenant relationships, are added to short-term rentals.
A simple breakfast, quick WiFi, or discount deals with local businesses, are all incentives which landlords can and have used to rent properties for greater per-diem rates. Short-term rental guests are looking for an experience, local and authentic, and this is a simple way to make ample returns on otherwise vacant rentals.
The promise of an authentic experience is also a fantastic way to market other goods and services to houseguests.
There are many websites and models (Airbnb, Vrbo, ABODO are amongst the most profitable, although startups are entering the market at a rapid pace) and each has a unique model and offerings for potential renters. Excursions, tours, arts and crafts, meals, all are sold across the various short-term rental sites, each with its own added profit for the host. All that’s required is a bit of creativity and a genuine sense of hospitality.
If your units are sitting empty, the short-term rental model is certainly worth a shot. The rental process is as simple as it has ever been and demand is rising every day, as more and more cities work with property owners to develop and streamline this type of rental to encourage tourism. The short-term rental is low-risk, immensely profitable, and a unique way to fill vacancies in otherwise empty units.