Looking to become new host in Detroit

[Sheldon33]

Hi all!

I’m new here and I’m looking to become a Airbnb host in the next few months after saving some additional capital to get started.

I had a couple questions that I can’t seem to get clarifying answers on and was wondering if anyone could offer any advice.

1. When renting Airbnb’s through an apartment building, I know you need to have a sublease amendment that allows this otherwise your going behind the management back. Does anyone have experience negotiating these amendments and what can you offer to the landlord/property management to incentivize them to allow you to do this?

2. . What are some strategies you can use that will allow you to rent from an apartment building under an LLC? Can you usually negotiate that as a normal lease agreement or do you need to apply using a corporate lease?

3. This is a follow up to the previous question really. If you don’t want to take the route of creating a subleasing amendment, how is it possible to rent an apartment using a corporate lease? I’m assuming you would need to have a LLC formed to do so or go through a property management company, but if you just formed an LLC as a sole proprietor what are the chances that your corporate lease would even be approved without previous credit history and backing for your company?

4. When renting multiple units out, does it make sense to do so using your own name as the lease signee or should you just go through the LLC more so? I don’t even have my own apartment now, so my biggest concern is if it possible to have multiple apartments in your name in the same city and the likeliness of that getting approved via your credit.

My initial goal is to start with one apartment unit and eventually expand out to 5-6 through Detroit and the suburban area, but I’m not exactly sure on the process of actually acquiring these units and the best route to go about getting the permission from the property management to allow me to sublet for Airbnb.

Any advice or answers to these questions would be greatly appreciated!

Thanks

[Vivian860]

Good morning,

1. I would ask the landlord with not too much details; some landlords can be greedy. I would ask if it is ok and let the landlord know that at times when you are traveling, not sure when those dates are, you want to pay rent but can't afford it so subleasing is the only practical way. Never offer a commission to the landlord, they usually are greedy, sneaky and intrusive people. If they get pushy it might not be worth it. If they say yes but seem suspicious, call the Detroit housing association for some help.

2. If you own an apartment building you have the power to do whatever you want. A renters policy through your insurance should cover this. Call your insurance company to see what they can do to cover you, they can give you an estimate. 

3. Again, you do not have to have an LLC to own an apartment building unless your state requires it. You can own a building and INSURANCE is what covers all liability. You would probably need a commercial business policy and/or renters policy to cover all angles. I would get a quote from your insurance company. If you have American National Insurance call them, they are fantastic!

4. Owning an apartment building vs renting out spaces is very different. If you own an apartment building I would use an LLC. You can register your business through the state and then get the appropriate insurance for coverage. If it is just you renting out spaces/places, I would keep it in your name and sublease under your name. If you go this route make sure you have a tenant policy to cover damages, etc. 

I hope this helps! Good luck

[Jason114]

1. It's always best to be upfront about your intended use of the property - it starts a good long-lasting relationship and if you find the right owner, they may have more properties for you to rent. I show up to properties as a professional with my own lease agreement with its own custom clauses, including subleasing among others. I'm very frank and honest. I also have stellar credit and business track record. And I simply provide a lot of what other tenants don't. 

2. I put the name of my LLC on the lease. I show finances of my company to prove ability to support the lease upon request. I have other owners that vouch for me and provide great references.

3. You can use a property management agreement but in some jurisdictions this may require you to be a real estate broker (especially if you're holding rents in trust) and/or may be more of a headache than you bargained.

4. Use the LLC name, it protects you personally from liability. It's also a good idea to have a Commercial General Liability Insurance to protect from personal injury claims and claims of faulty eviction from guests.

Don't be afraid of rejection and keep trying. Good luck!

[Helen3]

Have you factored in you will be liable for rents whether or not you are able to STR your rental.

A highly risky approach when you live in a country with one of the highest levels of Covid in the world where in many areas the STR market had collapsed. @Sheldon33 

@Vivian860  Why would you suggest @Sheldon33  lies to landlords and says they want to be able to sub-lease when travelling when the reality is they want the property  for an STR business and have no intention of living there.

Not sure why you generalise about long term let landlords calling them sneaky,  greedy and intrusive when you are the one suggesting the OP lies in order to secure a rental so they can generate excess profits by sub-letting, in that scenario the one being sneaky and greedy surely is the person looking to lie in order to arbitrage a property.