A quick Google search for the term “real estate investment” returns over 200 million results. If you include “Airbnb” in the search criteria, the results drop to a mere 8 million. This plethora of information leaves many people who are interested in getting into the short-term rental business confused and wondering whether short-term rentals provide a viable solution to the ever-shrinking margins of long-term rental property investment.
As the owner and operator of Military First BnB Solutions, I witness the benefits being enjoyed by smart, short-term rental property investors every day, and I understand what is needed in order to make a short-term rental investment strategy work. Most people considering the short-term rental business can easily grasp the need for additional start-up capital beyond what is required to purchase the property. This additional capital provides for furniture, linens, kitchen essentials, outdoor furniture, barbecue grill, fire pits, electronic locks, etc. However, many don’t realize that their responsibility doesn’t end with stocking the property with necessary items: they will also have to perform routine/preventative maintenance on the property and everything they stock in it.
The most successful investors have one very important thing in common: a Long-term investment mindset. Many real estate investors are accustomed to being responsible for long-term property maintenance for long-term rentals, while tenants maintain their personally-owned household items and perform routine maintenance on the property, such as changing air filters, replacing burnt-out light bulbs, lawn maintenance, tightening loose screws, etc. The short-term rental model shifts all of that routine maintenance responsibility off of the tenant and onto the property owner. The short-term rental model also requires a mental shift toward routine/preventive maintenance for large household items like hot water heaters, HVAC systems, refrigerators, etc. A competent short-term property management company can help with this mindset shift by utilizing preventive routine and long-term maintenance schedules that address all aspects of short-term property rentals.
Long-term maintenance begins with cataloging the year, make, model, and manufacturer of each appliance, system, and installed item in a residential property. These details provide vendors relevant information prior to arrival at the property, enabling them to bring appropriate parts in case a repair becomes necessary. While this might seem insignificant, the concept reduces both time and the costs of repairs by eliminating the need to drive back to the office to get the right parts. The catalog helps to establish a preventive maintenance schedule that includes summer and winter HVAC services, refrigerator filter changes, deep carpet cleaning, etc. Our preventive maintenance program also leverages cleaning staff and hosts who access the property numerous times a week and can identify leaks, replace worn items, and facilitate claims for guests’ damages. A well-managed, long-term, and routine maintenance schedule helps to properly maintain the investment property over time and positions the property for both continued use and an increased sales price when the investor is ready to sell.
Investors looking for an alternative to the ever-shrinking margins of long-term rental property investment and researching short-term rental options should consider the differences in the two models. As described above, the short-term model requires a mindset shift, includes the purchase of household items in the property purchase budget, and plans for both short-term and long-term maintenance action plans and schedules. These three simple but important concepts allow short-term rental investors to allocate funds appropriately, reduce overall operating costs, and provide exceptional experiences for their guests.
Military First BnB Solutions, an innovative short-term property management company, can assist property owners with optimization of investment properties. Our expertise and host team members eliminate your stress and increase your property revenue. Please review our website www.militaryfirstbnbsolutions.com and schedule a call at calendly.com/tobyprudhomme-militaryfirstbnbsolutions to discuss how we can help you. We look forward to working with you.