30 minimum stay for insurance reasons?

Eva170
Level 5
Hollywood, FL

30 minimum stay for insurance reasons?

Hello hosts!

 

I live on one side of a duplex that I own and I'm currently in the process of preparing the other unit for Airbnb and am excited to start hosting guests. Unfortunately, it turns out my current home insurance carrier does not like short-term rentals one bit and will no longer cover me if I rent out rooms for less than 30 days at a time. So I got rate quotes from a few different carriers and I'm looking at a 60% increase in my annual premium as well as a higher deductible if I change to an Airbnb-friendly insurance. I live in hurricane-prone South Florida a few miles from the ocean so insurance rates are high to begin with. I'm also not sure I could get my current rate back if I switched back later.

 

So I'm considering, in order to keep my current home insurance, to list the unit with a 30-day minimum stay. I'm assuming there is a much smaller market for stays that long. Does anyone here have experience with such a listing? What kind of guests do you get? Retired people? Foreign students? Workers relocating to the area? People from Europe who actually have that much vacation? 🙂

 

I'd appreciate any experiences you can share.

Thanks!
Eva

12 Replies 12
Rachael26
Level 10
Murphy, NC

@Eva170

Be careful and do your research carefully on this one. Lots of help here on the Airbnb website - but most of all read up on your local state laws on short term rentals - when you rent more than a 28 day continuous term your guest becomes a tenant with all the legal rights of a short term rental and you will have to go through the courts to evict should they decide to stay longer.

Best Wishes 

Rachael26
Level 10
Murphy, NC

@Eva170

Be careful and do your research carefully on this one. Lots of help here on the Airbnb website - but most of all read up on your local state laws on short term rentals - when you rent more than a 28 day continuous term your guest becomes a tenant with all the legal rights of a short term rental and you will have to go through the courts to evict should they decide to stay longer. 

Best Wishes 

Thanks Rachel! So many important things to consider. I have experience with long-term tenants and I know that Florida is a very landlord-friendly state when it comes to evictions, but it's definitely not something plesant. I will probably go ahead with the new insurance carrier, I'm just worried how much this increases my start-up costs. Because of this, I don't have the option to dabble in Airbnb hosting occasionally, I have to jump in with both feet for it to be worth the investment. So that's what I'll do. I can always switch back and rent long-term again if my losses are too great after the first year.

 

Eva

@Eva170

Best of Luck to you. You will help yourself a lot by taking time with the selection process.... Do not use Instant Book, then you can ask questions and chat with prospective guests to make sure a good fit is possible. Really sharpen up your listing, house rules and expectations - the more honest and open you are about the listing and rules - the less problems you should have and secure that all important review at the end of the period.

 

Sounds like you will do well, and do keep in touch to let us know how you get on!

 

Besy Wishes.

Thank you so much for the encouragement! I'm both excited and a bit scared to become a host, but there is no reward without risk so I will keep preparing and learning as much as I can before getting started.

 

Eva

Joanna85
Level 10
Las Vegas, NV

I am currently  hosting a 30 day guest.  It has been less than desirable...and it was IB, as I got the booking when I was nearly a brand new host and hadn't had many guests yet, so I didn't know better. Aside from the fear the guest may not leave and I will have to evict, I just never wanted a roommate.  Hosting short term guests are easy because they are in and out and less chance of them sitting around living in my home the way a long term guest would.  I agree with what the other woman said--run a background check on the prospect and take your time to make sure it's a good fit.  Also really think about your house rules--even if you think it's common sense, put it down in writing so that way if something goes wrong you can say, "This is included in my house rules that you can't paint the ceiling black"....! 

To answer your question about who you get for long term...I live in Las Vegas and we get mostly people moving here with no job trying to make a fresh start and it almost NEVER works out, so they end up hanging on for dear life to whatever they can.  That's the kind I have in my house now..the old "I've just moved to town and am looking for work."  Meanwhile they have figured out real quick it's not easy to find a job, their problems have followed them here and they are broke and can't even get enough cash together to move into an apartment.  The flip side is we also get construction folks here in summer for long projects, lots of people here long term for meetings or work or conventions.  If you live in a seasonal tourist town, I imagine your long term guest pool for seven or more days may be a lot more than you think.  Just use caution.  Long term guests will require being treated as a regular rental in most cities (here no matter if it's a day and they don't leave I have to follow the eviction process with the courts) so maybe do a little research.  It might pay you better in the long run to just pay a higher insurance premium, bump your rate up to cover the increase and take all types of stays.  Maybe bump your rate but for 30 day stays or longer give a big discount, so that will attract more long term guests...that way you can still have guests, cover your higher premium and see if you get any bites for long term guests.

Thank you for sharing your experience, Joanna! I would actually prefer short-term guests, maybe a week or two at the most, for exactly the reasons you have stated. I've had long-term tenants and that's what I'm trying to get away from. I was only considering the 30-day stays as a way around buying this expensive insurance, but I think I'm going to bite the bullet and do it. Hopefully this turns into a regular business and will be worth the investment.

 

Eva

I started doing it because I had a renter for three years in that space and missed the extra cash.  I thought I'd post an ad on Airbnb and would be lucky to get a few nights booked...have a little 'mad money'....I was SHOCKED at how quickly I was booked.  I LOVE people staying a day or two, enjoying the chit chat and meeting people from all over, then having them go back home!!  This 30 day guest I have is just sucking the good mojo out like how my three year tenant did...not nearly the fun and joy short stay vacationers are!!  I hope you have a great experience!!!  Play around with the rate to make it work how you want-- you will figure it out!!

Yes, that is exactly what I'm hoping for! We're in a beach town so vacationers are my target audience. I already have some international friends and acquaintances who keep coming back to the area year after year. I'm hoping to convert a few of them from hotels to Airbnb and have them stay with us. That would be fun!

 

Eva

Do you have trouble renting under regular lease? If I do have a choice for long term ( 9-12 month lease), I would just do that instead of Airbnb, so much work and not that great return. In fact I'm in the process to move most of our units back to long term, it's exhausting 

I've had long-term tenants for the past four years and I need a break from that. I like the idea of having access to the unit between guests and being able to maintain and improve it better. So difficult with someone living there permanently. Sorry to hear you find Airbnb exhausting. I see you have 7 listings so I can see how that could get a bit much.

 

Eva

Dls-2009-Llc0
Level 1
Las Vegas, NV

We are considering selling our current Airbnb investment home.   The small profits don’t equal the work involved.  Paying a 13% room tax and all the utilities doesn’t leave much for us.  And we are not going back to long term renters.   Nightmare after nightmare.   

A 30 day minimum could be an interesting alternative.   It would eliminate the room tax since it would not be short term.   (City of Las Vegas law).  But I can see the house taking more of a beating over time.   People become slobs as they become more comfortable in a home. 

 

Or I can just sell while the market is high and run.