Happening NowShort-Term Rentals / Airbnb

Whether to furnish an empty unit in a fourplex for travel nurses or put it back on a year lease.

Here is a scenario to work through. Four unit building, owned three years. Unit 3 goes vacant, a 1 bed that has been getting $1,150 on a year lease. There is a small college and a hospital about a mile away, and the owner keeps hearing that hospital travel nurses pay real money for a furnished place by the week. What is known so far: the city requires a short-term rental registration, $250 a year, and it caps non-owner-occupied buildings at one registered unit per parcel. So exactly one of the four could be done. Rough numbers, and the room should say where they are wrong: furnishing at $8,500 for a 1 bed done plainly. Gross at 65% occupancy and $95 a night, about $1,850 a month. Cleaning at $80 a turn, maybe 7 turns a month. Then the platform fee, the utilities the owner would now be paying, and internet. That lands somewhere near $1,100 net if nothing breaks, which is basically the long-term rent with a lot more work. The weekly nurse stays are the part that could change it, since longer bookings mean fewer turns and fewer cleaning bills. The thing to keep circling is the other three tenants. They share a stairwell and a laundry room in the basement. Nobody can say in advance how a rotating set of strangers with suitcases plays with people who have lived there four years and pay on time. In a building like this, two of them are usually the reason it is easy. The decision in front of this owner is whether to list unit 3 in the next two weeks as a long-term or spend the money on furniture and try one season. Where would the room land?

renee_dubois PS1APRO 12

Answer

tashaford30 SG2CPRO 16

Before the furniture money, call your insurance carrier and your lender. A landlord policy written for annual leases often does not cover nightly guest stays, and some carriers want a different form or a commercial policy for it. Mortgage documents sometimes carry language about the use of the property as well. Get whatever they tell you in writing, because a phone answer from whoever picks up is worth nothing later. The other thing in your numbers: you have utilities as a line but no amount. In a four unit with shared laundry that can be a bigger jump than you expect once a guest runs the heat at 74 all week.

tashaford30 SG2CPRO 16

2 replies

laurenkim53 PF4APRO 14

Your travel nurse angle is the whole deal, and the right label for it is furnished mid-term rather than short-term rental. The demand and the platforms are different, and the turn count is much lower. If that is what actually fills the calendar, underwrite it that way and stop looking at nightly comps, because 65 percent at $95 in a college and hospital town is a number somebody sold you rather than one you counted. Also, your registration is one unit per parcel today. Caps like that have a habit of being one thing in March and another thing in October. Worth reading whether the cap sits in the ordinance or in a resolution the council can move on a single vote.

laurenkim53 PF4APRO 14

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