Updated: Aug 22, 2020
Turn your liability into an asset in 5 steps
(Make your Personal Residence a Short term rental)
What? As many of you know from Rich Dad, Poor Dad; a personal home (though it appreciates) is not an asset, it’s a liability. Many people would love to start over, house hack or live-in-flip but currently cannot because of family, current financials, jobs, etc. What if I were to tell you there is still a way to make money from your personal house? Is that something you would be interested in?
Where? If you live in an expensive, highly traveled, or vacation heavy market and local ordinances allow; renting your home out short term may be a way to turn that liability into an asset, or at least reduce your monthly payment.
Who does this work for?
- Frequent traveler or frequent vacationer.
- Ability to compartmentalize emotions; and justify renting your own home.
- Home layout that allows for locking closets/garages.
When I was traveling a lot for work, the rest of the family usually traveled as well (grandparents, friends, etc.). Additionally we took 4 vacations that year. 1 large week long, 1 short, 1 to some far away family, and one just the wife and I. Work and vacation travel combined we had an empty house for about 2 months that year, we earned about $3500; enough to fund our next family vacation!
I first heard of this idea from BiggerPockets Podcast #114 where the guest explained that in addition to owning multiple AirBNB properties, they also Airbnb their own when they travel.
- Other people will be staying in your personal home.
- Some admin and capital required to get it up and running.
- Had to change some locks (closets) to allow for locking and storage.
- Went through 3 cleaners before we found one that was reliable.
- One complaint from the neighbors.
Why? However… there are ways to get through all the Obstacles! With a little work you can turn your liability into less of a liability and gain some Short Term Rental knowledge in the process.
How it works:
Search your local county and city website for STR ordnances (make sure it’s allowed).
-The website will also likely show you the licensing process and the tax requirements.
AirBNB.com has a calculator with estimated income.
AirDNA.com shows local vacancy, rental rates broken down by bedrooms and time of year.
Use our Short Term Rental Calculator.
VRBO also has a calculator.
If it looks like your house would be in demand… continue to step 2
Plan out which spaces will be for guest use:
o Technique: Lock the shed, garage, and closets for your personal stuff.
- Purge your house of everything you and a guest wouldn’t need (spring cleaning!).
- Make a house binder.
· How to operate the TV, Hot tub, Computer, Thermostat, etc
· Local attractions
· Best local eateries
· Closest grocery
· Local shopping
· Local travel pamphlets
Up front capital:
o Make a store run for the following:
- 2-3 tubs to quickly put away pictures, chargers, personal items, etc.
- 2 sets of bedding for each bed.
- Bath linens for the maximum number of people your house can serve (2 sets).
- Purchase new door Locks.
· Turn or replace your closet locks so they can lock from inside the house.
· Label all the keys and organize them on a key ring!
- Have some reserves set aside for WHEN things break.
o House cleaner:
- Property managers will likely have a good recommendation.
- Ask other Short Term Rental investors for their recommendation.
- Thumbtack allows you to put in a job request specifically for STRs.
- Schedule a test run cleaning (with you present).
· Ask specifically for the best linen exchange process.
· Give a checklist to the cleaner.
· Ask the best way to schedule (text, call, email, TurnoverBNB).
o Find a HOME photographer:
- Your realtor will likely have a good recommendation.
- Thumbtack also allows you to filter by photographer type.
- Get photos of your house taken… AFTER cleaning.
Finish up your listing on AirBNB, VRBO and booking.com
o Things you’ll need to have ready:
- Calendar of availability
- Your spouse to bounce ideas off of
o Some questions you’ll need to decide:
- Will you charge for cleaning, or include it in the nightly rate.
- Check-in/out Time (allow for cleaning)
- Pets allowed?
- Late Check-out fee?
- Parties allowed?
- Automatically allow anyone to book, or approve each?
- Security deposit?
Most websites do a good job getting new listings to the top of the search results, so expect a quick booking!
o Welcome your guest to your home!
o Include directions, check-in instructions and a warm note.
Schedule your cleaner (pre and post cleaning)—Check COVID-19 regulations.
Lock the house and all your personal items.
Sit back and enjoy!
We had some excellent guests and some not so great guests. You’ll be able to review them appropriately and warn future hosts.
Each turnover was a learning experience and helped us refine our process.
By the 3rd or 4th hosting we were comfortable and on autopilot.