Co-hosting using long-term renters on-site

[Heather86]

I currently live in my house full-time and have an attached studio that rents via airbnb full-time. I am going to move a couple of hours away in the next few months and considering options. I'm seeking info from others who have been in this situation, esp #3. Options are:

1) Rent my house to a long-term renter, rent the studio to a long-term renter. No airbnb.

2) Rent my house to a long-term renter, rent the studio to a long-term renter in low season only and airbnb high season. I'd have to cobble together housekeeping and my own occassional trips back to manage airbnb (in my city we can do this a max of about 90 days a year). This would not involve the long-term house renter at all. Two units, though attached, would have no access to each other. Risk: long-term renter could be loud, etc with no incentive to be respectful of the attached studio guests. Con: me managing, from afar. Pro: I make a bunch more money.

3) Rent my house to a long-term renter, and as long as I add the long-term renter to my city permit, have them co-host and we to rent the studio on airbnb year-round, splitting profits (what %, no idea, but split in some way that incents them to be good hosts).

Any thoughts regarding #3? The difference financially is a long-term renter $1,300/month vs airbnb $1800/mo slowest 1-2 months, and $4000/mo in summer months. In the low season, perhaps my long-term tenants would be psyched to be managing the property and getting several hundred bucks credited back to their account. But I'd lose out, a little. In the high season, everyone wins. It somehow seems like I would pay them for more than just cleaning...more like it would become THEIR airbnb (esp since the units are attached and when no one is in the aribnb they can use that space) and I'd get "royalties"in a sense. It is so easy to manage I can imagine someone being psyched to get $500-$750/month to manage. Am I wildly off base here?

I am also not sure how to find clean, repsonsible, motivated renters in a very tight market who aren't just saying that yes of course they've always wanted to be airbnb hosts!  

Sorry so long, but any thoughts?

[Regina38]

can you airbnb both and hire a co-host either through Airbnb or a management company.

[City-Limits-Ranch0]

Do you have a supply of long term renters that don't want to stay during High Season (like students?)  Because if not, you might have trouble finding a long term renter willing to depart when you want them to.  And if they refuse to go and you have to evict them that could really negatively impact your Airbnb reservations.

Why only 90 days if the studio rents full time?  Is that if you are not living there or is that some other reason?

I can easily visualize a tenant in the large space managing the studio.

What about a tenant in the studio managing the house as an Airbnb?  A tenant in the studio would more likely be a single person instead of a family.

[Heather86]

Hi City Limits --

EXCELLENT idea to also think the converse -- finding a long-term renter for the studio and airbnbing the main house. I hadn't thought of that too much. But I have a friend who tried to airbnb a house and there was definitely less demand in terms of paying more money to have those two bedrooms etc, versus just a 500 sq ft studio, since so many travellers seem to be couples.

As for your other comment/question, the 90 day thing is related ot city permit. See my reply to Regina. Required to have long-term occupany for 270 days a year in Portland. And yes, fortunately, I live right down the street from a college and was thinking about a student from Jan-May for the term, and then airbnb for summer. 

Housing rules and tenant protections are a big deal in Portland. But I can have a Jan-May lease and when the lease ends, it ends. If I rented to someone and then tried to "evict" them, that would not only not be cool (to spring it on them) but I'd also have to pay relocation expenses!

Thanks for that other idea...will mull over the studio vs the 2-BR house on airbnb.

[Heather86]

HI Regina -

I don't think that one can have TWO non-owner occupied rentals on airbnb, at least not in Portland. I know in my city, I learned from some hosts that airbnb took their listings down if they had more than one!

And for our City permit rules, we have to occupy a home at least 270 days a year. But fortunately, one thing that is allowed is to add a co-host to the permit, a long-term renter that can "count" like the owner would.

Different rules, in different cities, I am sure.

[Paul154]

Glad you're searching for solutions. You do understand the problem.

How does one motivate tenants to do what we want?

Added into your mix is business unfriendly regulations.

It is enough to drive one crazy and bankrupt because it is nearly impossible to follow all the rules, maintain a property and eek out a profit.

Worse than that, the regulations embolden tenants to become intransigent (higher risk of bankruptcy....)

From a business prospective, it would be best to go rogue. Screw Portland's foolish rules and be discreet.

Get an independent co-host and airbnb both properties. Pay 15-20%.

You cannot get a stranger to be a tenant and  trust him  to have your interest at heart.

It is impossible. A tenant is an adversary. You take his money. Period.

Worse than that, you cannot motivate a tenant. What is your recourse if he doesn't do what you want?

You would be in a position of a poorly managed place AND an unhappy tenant who will do financial damage.

Best of luck.

[Heather86]

Hi Paul - Thanks for your persepctive. I don't see tenants as adversaries as you do, but then again I've only had positie experiences when I was a landlord in the past. Plus, I aim to find a tenant through word of mouth if I can, and also they will be incentivized to be good co-hosts as they will be paid on volume/ratings or some combo. So I am hopeful.

I would never go rogue and violate the rules from airbnb and/or City of Portland: too stressful, the fines are up to $5,000 in Portland and people -- even people from across the country -- look for unpermitted and rogue airbnbs just to turn them in. Risky, and don't recommend anyone go rogue. It also hurts the reputation of aribnb for others.

Coincidentally, I just read this article on this topic. Pasting a url here from Willamette Week paper about people who airbnb their whole house in violation of city rules. In case it won't let the url post, it's from the Aug 23 issue of that paper if anyone wants to check it out: http://www.wweek.com/news/2017/08/23/a-new-analysis-suggests-airbnbs-attempt-at-self-policing-only-s...  As you will read, a dude from NYC did this "study" of Portland airbnbs. People like this turn in hosts for violations all of the time. 

[City-Limits-Ranch0]

I would never suggest 'just' evicting a tenant.  However, when a tenant in our community is in the property and their lease expires or they are given a 30 day notice (on a month to month lease) they may refuse to leave.  If they remain in the place then the law requires the landlord to institute eviction proceedings that can take 60 to 120 days and cost lots.

I had a friend who had a tenant in a travel trailer on her property.  The travel trailer was not a legal dwelling or legally hooked up to utilities.  If zoning had come in and red tagged it, the tenant would have had to leave immediately.  However when my friend gave the tenant  a 30 day notice to leave because she was selling the property, the tenant refused and went to a free legal aid agency which provided him with a lawyer and fought the eviction.  It cost $4000 and took six months to get him out because it was  the property owner that wanted him to leave and the county zoning department was not involved in an enforcement action.

[Lisa658]

@Heather86

Another option would be to rent the entire property at a higher rate and allow the tenant to sublet or do AirBnB on the second dwelling.  This would keep you out of the secondary rental altogether and generate a higher fixed monthly income throughout the year.  

They would cover the insurance, utilities, cleaning, etc and you would not be part of their business at all.  You may not earn as much as if you had a percentage but there is extra peace of mind not having your income hinge on the tenants' performance as a host.  An added bonus is that any damages are the tenants' responsibility.  They should earn more if the risk is being shouldered by them.  

If I found myself in this situation, I would prefer to have both properties with long term tenants year round.  For me, if I did not live in the area, the extra money would not be worth it.

Lisa

[Samantha179]

Hi Heather,

I happen to come across your post in my research about the benefits of becoming a co-host for Air BnB in the Portland, Oregon area and thought I'd reach out. 🙂 Feel free to disregard this if this is not the kind of response you were looking for, I totally understand.

I live in Northeast Portland currently and work in advertising at a local media group, specifically was in the real estate vertical for a few years now. I am very familiar with how to creatively advertise listings across all digital platforms, and I LOVE it! Combined with my strong interest in personal finance/financial management and planning, I have begun research on how to explore the Air BnB space myself as a side business, especially with how popular Portland is becoming, but I'm just getting started. As I'm getting familiar with the industry I thought it may be beneficial to begin with partnering with someone as a co-host. I would love the chance to work with scheduling new renters, property maintenance, learning the whole scope of the business. I am currently a Rover dog sitter on the side so already have experience with customer service, scheduling, and professional communication with clients through sharing apps.

If your option #3 is still on the table but you're having trouble finding a trustworthy, respectful, professional renter to occupy your main house while simultaneously managing your studio, maybe we can work together! I'd love to chat with you more if so, I could also provide professional references and would be happy discuss more details on my credentials. Best of luck to you either way!

Best,

Samantha