A QUICK GUIDE ON SHORT-TERM RENTALS

Investing in a short term rental is a great way to eventually make passive income and even manage the business remotely while you focus on other priorities and aspects of your career. But first you need to get started and that’s where DOBI is here to help

What is an STR (Short Term Rental)?

What qualifies as a short term rental is any furnished living space that people can rent out for short periods of time. Most commonly you have folks renting for vacation or business travel purposes. One key element to getting started is deciding on your listing type whether it be a house, townhouse, condo, tiny house and everything in between. This will inform your business strategy going forward. Additionally, location is gonna be integral. If you’re just starting out, keep it relatively local to you, but with notable attractions and amenities nearby. This way it’s not a massive inconvenience to check in on your property as well as using it for yourself!

“Choosing the right property to invest in is the first and most important step of the short term rental business. Be sure to research the area you are investing in, as the industry changes with the needs and expectations of the renter. It is also important to make sure you will be able to rent out during peak and non peak seasons.” –Kristen Patterson, DOBI Real Estate Agent

Acquiring The Property

Once you get the keys, this is your time to customize the space from painting, ripping up carpet to laying new flooring and just making it special from the get go. You do the work up front and your guests will immediately start leaving reviews about how great their stay was. Another thing to consider is if your STR does take off and starts to consistently get booked, you’re not going to have the time to get in there for a remodel, not to mention putting a halt on your cash flow.

Furnish Your Space

Once the remodeling and touch ups have been completed, it’s time to choose a style and furnish your unit. Consider the architecture and surrounding location. Are you going for something rustic? Mid century? Minimalist? Boho? Once you establish the look and feel, you have to figure out your cost of materials. Is this going to be a premium or budget experience? From the bedspread to the can opener, consider the most cost effective ways to complete the list of amenities for your guests. Target, Home Goods, Marshalls, TJ Maxx are all great places to start and don’t forget to save those receipts!

Once you’re officially up and running, you’ve cleaned it, you’ve staged it…offer it to a friend or family member for the weekend to get honest feedback on the experience. Encourage them to do what they would at any STR like cooking and showering. Maybe you forgot to include a spatula or maybe the water pressure isn’t that great. Again, you want this feedback upfront to address any immediate issues before the public starts giving you unfavorable feedback right out of the gate.

Assemble A Team

Eventually, after things are up and running and you’re getting some of that income rolling in, you can consider getting some of your time back by hiring out a cleaning crew, handy person, pest control, lawn maintenance and a contractor. If you just had to choose one from this list, the cleaning crew is paramount. They’re the ones that will inform you if something was damaged by a guest or if something needs to be replaced or restocked. Everything else can be hired as needed.

Before sending this off to a property management company that’s gonna take 15%-30% of your gross revenue, dedicate yourself to really getting in the weeds and understanding every facet and variable of the business. You need to experience dealing with customers, building your own terms on refunds, repair policies and so on. This will better prepare you to take on your next AirBnb investment.

Automate it

In the overall theme of making this passive income and getting your time back, another tip is to automate where you can. There are plenty of third-party apps such as Guestly For Hosts to automate everything from your welcome, check-in and check-out messages to letting your cleaning crew know that the unit is ready to be tended to. Even pricing, depending on if it’s a high or low season can be an automated process through apps like Beyond Pricing or Price Labs.

Hopefully you found this list helpful to getting your first STR property up and running successfully. It’s all about doing the work up front to ensure a smooth stay for your guests which will result in a positive experience for everyone involved. For more content like this, follow DOBI Real Estate on social media as well as subscribing to our bi-weekly e-blast.

Sources and Resources:
Robuilt
AirBnb on Pricing
TurboTax STR Tax Tips