It seems like just about everybody is giving short term rentals a shot or at least are considering it. The risk versus reward is attractive and there are so many success stories that it's hard to turn down the opportunity for such easy money.
There are pros and cons to short term versus long term renters but it sure seems that the pros certainly out-weight the cons. Let's take a look at some of these.
- Most renters don't stay long enough to do any real wear and tear damage that can be expected with a long term tenant. This is because long term tenants have patterns of where they walk and what they do. With short term renters, everyone is different so the wear patterns don't tend to build up very quickly.
- Plus, the space is being cleaned regularly where with most long term tenants you would never know, nor can you control it.
- The screening process for renters couldn't be easier.
- The platform provides a calendar, payment processing, damage control and so much more.
As I'm sure you can tell, I am an advocate for short term rentals. I've rented and owned my own and I can tell you, if you can swing it, do it!
That's not to say short term rentals are for everyone. Sites like Airbnb and VRBO are tremendous opportunities for homeowners and this doesn't quite look like what it used to. There are many ways people are able to use their home, or second property to capture short term rental income.
Don't skip this paragraph!! Always, and I mean ALWAYS, check your local regulations both at the city, county and state level as to not violate any codes. The Airbnb market in Denver is no exception. There have been landlords being severely punished for not operating their properties within the local codes.
Places like Denver have mandated a process in order to Airbnb or VRBO a property. The biggest one is that it has to be your primary residence. Now who really wants random, unknown guests in their own home where they live? Some do, but for many of us that is not a desirable situation regardless what it pays.
Some homeowners are opting for seperate spaces like a basement or accessory dwelling unit but still that may not fit everybodies lifestyles. Here's a creative around this that I heard recently. The idea is to create two spaces. I mean actual walls and doors that are closed off and completely separate. Lease one space to a long tenant and discount the rent with the agreement that they will manage a short term rental in the second unit. The long term tenant is the primary resident and as such can obtain the proper license and operate completely legally. It's a win win where you don't have to manage it and receive the additional income while the tenant gets to live in a neighborhood they typically would have been priced out of.
There are property management companies that will set up this exact system for you and direct deposit your rent each month. They also market the property and monitor renters insurance and have their own million dollar coverage on properties.
Still not buying in? That's okay, there's another option. Denver may be the largest front range city in Colorado but there's other towns nearby that also allow Airbnb, VRBO and other short term rentals. Colorado Springs allow short term rentals and, at the time I'm writing this, do not require it to be your primary residence. Plus, prices are way below Denver values and, believe it or not, the rental market in Colorado Springs is just as strong in Denver. Possibly stronger if you consider that their market is built on military and tourists for local geological formations, a world ranked zoo, olympic training, business hub...possibly more diverse than Denver.
None of this matters though if the property you have or are looking to get isn't desirable for short term renters then you can toss this whole idea out the window. But how do you know if the property is desirable. Just like your home's WalkScore, your home also has a short term rental score. This is based on, activity in the area and the characteristics of your property.
Wondering what your Short Term Rental Score is?
I am so glad you asked! We provide a free digest outlining your home's short term rental score and potential rental income. Enter your address below to find out your score.
