- Hello, everybody, and welcome back.
This is Kevin Smith,
the Southern California Realtor Specialist.
Today, I had a question that had come up
with an Airbnb rental, so today I'd like to talk
to you a little bit about maybe the pros and cons
to doing an Airbnb investment property versus doing
a long-term monthly rental income property.
(contemporary music)
So if you haven't used Airbnb or VRBO,
it's a great experience.
I've actually gotten a five bedroom, five bath in Rome
at one time for ten of us to go on a Mediterranean cruise,
so you get the kitchen and a great location to see the city,
and typically you're spending maybe $200
to maybe $500 dollars per day, so it's great
if you're looking for a rental that may be bringing
in a larger cash flow per month, but there's a certain kind
of thing that you're gonna have to be cautious of,
and it has to do with the actual location
that you're purchasing this property.
So, one of the things you're gonna have to watch for is:
Is it in an HOA or an Association Complex where the rules
don't allow a rental less than 30 days?
So you're gonna have to check that out,
make sure that that's viable and then also the zoning.
I know that there's certain cities now that are not allowing
any type of short term rental except in certain zoning areas
that are permitted, of course so that the city
can establish a tax base and collect taxes
for long term or short term rentals.
Versus a long term rental where you're buying
a single family home, you may be bringing in, let's say,
$1,500 a day, excuse me, $1,500 a month,
versus, let's say, $200 to $500 dollars per day,
which could total up to maybe $9,000.
So those are some of the things you might wanna look for.
Other pros and cons might be on the commissions.
On a long-term rental you're probably gonna be paying
be paying about 10% per month on the total income
to a property management company that's gonna take care of
the maintenance and the cleaning
and the day-to-day operations.
Now on an Airbnb, typically the commissions obviously
are gonna be more complexed, so you're gonna have
people checking in on a daily basis, weekly basis,
so the commission rate is probably
gonna be more about the 50% range.
So those are some things you're gonna have to take care of
and make sure that the agreement that you have
with the property management fee is
fair and amicable for both sides.
The other thing you're gonna have to worry about is when
your prop, when you've been doing the Airbnb for several
years or months and you're looking for an exit strategy.
You're gonna wanna make sure that that home
is in a good rentable area if you're planning
on keeping it for long-term rental,
or if you're looking to sell it, is it gonna have
a good sales value and will you be able get
the money back out of it, the money you've invested in it.
So if you have any more questions in regards to Airbnb
or possibly investing property for long term or short term,
feel free to reach out to me either by email, text or phone,
and you can click the links below to get ahold of me
that way, and of course we'd love to have you subscribe
to the YouTube channel and hit the little bell
for notifications for our next videos.
So thank you very much, hope you have a great week.
We'll talk to y'all soon. Bye-bye.
(light music)
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