Risks and Costs of Having a Short-Term Rental

It seems like I keep hearing more and more about Airbnb and other short-term rental websites. More and more people seem to be listing their apartments and houses on these short-term rental websites in order to make some cash.

Some people are even buying homes to specifically place on these websites too.

Even though this market seems to be growing very quickly, it doesn’t mean there are no risks. Below are a few risks and costs you may want to think about before you decide to rent out your real estate for a short-term period.

Risks and Costs of Having a Short-Term RentalAdvertising.

Since this is a short-term rental, you will have to advertise the property if you would like people to stay in it, of course.

You may use one of the many websites out there such as Airbnb, Homeaway, VRBO, and so on.

You may even place ads on other websites so that potential customers can find you.

All of this costs money!

Property management fee.

There is usually a lot more work to do with a short-term rental. This is because with a long-term rental, you usually just sign papers, give the person the keys, and collect a monthly rent payment.

However, with a short-term rental, you may be giving the keys to a new person every few days, the property will need to be checked, it will need to be cleaned, items will need to be replaced (such as toilet paper and soap), and so on.

This can add up to a lot more work and a lot more time. Because of this, many people with short-term rentals end up hiring someone to manage the property for them. If you do this, you will have to pay a fee to the person who manages your property.

Competition can be fierce.

One major risk with having a short-term rental is that you don’t know if the rental will be vacant or not. You may have a high vacancy rate because of a lot of competition in the area as well.

You have to think – you are competing with other short-term rentals and any hotels in the area as well.

There may be laws stating you cannot rent on the short-term.

Many cities are starting to fight short-term rentals. They may be placing new laws restricting any rental for less than 30 days which may ruin your short-term rental plan.

Are you interested in owning a short-term rental? Why or why not?

 

Image via Flickr by su-may

Long-Term or Short-Term Rentals For Your Real Estate?

One day, I would like to get into real estate investing. We have a house of our own, but we live in it so we aren’t making any money from it. One debate that we are currently having is whether or not we should have a long-term rental or a short-term rental (such as a vacation rental). There are positives and negatives for both, and I will be discussing those below.

Long-Term or Short-Term Rentals For Your Real Estate?Long-term PRO: With a long-term rental, there is more stability.

Stability can be argued against almost anything, but for the most part, a long-term rental will have more stability because the same person will be renting it for a long time. This is opposed to a short-term rental where a person may only rent for a few days, a week, or MAYBE one month.

With a long-term rental, there is less likely of a chance for the rental to be vacant because you will have a contract with a renter for usually 6 months or more.

Short-term PRO: You may be able to make more money.

You can usually charge a higher price because everything is determined per day or per week. A $2,000 a month rental for a long-term renter may make you $300 a day for a short-term renter.

Long-term PRO: Less time is needed with a long-term rental.

With a long-term rental, you won’t have to have someone check on the property as often in most cases. This is because with a short-term rental, you will need someone to clean up after each stay, someone will have to give this person the keys and show them the place each time, and so on.

Short-term PRO: If the property is not being used, you can use it.

Short-term rentals provide a lot of flexibility. If there is a vacant slot in your rental, then you may be able to use it as a vacation home for yourself as well.

Long-term CON: If you have a bad tenant, you are stuck with them.

Bad tenants seem to make up a lot of the real estate industry, or at least most people talk more about the bad than the good. If you have a bad tenant in a long-term rental, you are stuck with them for a long time.

Short-term CON: There are a lot of other vacation rentals out there.

Vacation rentals are a booming industry right now. More and more people are renting out short-term properties and their vacation homes, which means that in some areas competition can be quite stiff.

If you are interested in real estate investing, are you looking for a long-term rental or a short-term one?

 

Image via Flickr by kansasphoto

How To Teach Overseas

Are you interested in teaching abroad? Maybe you want to experience new cultures by traveling the world, but you need to find a way to make money at the same time.

Well, you are in luck. If you plan on living in each place that you travel to for at least one semester or at least one year, then you may be able to find a job teaching english in the country that you move to.

There are many positions open around the world at military bases, business schools, international schools and so on.

Make sure you are certified. 

If you want teach English overseas, then you will want to become certified. Not every school will require that you have certain degrees or certifications, but usually the positions that you will want will have certain requirements.

You will most likely want some sort of undergraduate degree. A teaching degree is not required but it is a nice little plus to have on your resume.

You will probably need a TEFL (“Teaching English as a Foreign Language”) certificate. You can earn this certificate in a physical class or online. These classes are good to have because they will teach YOU how to teach others the English language. An in person class may be best if you do not really know how to teach others correctly. You want to be the best at what you do!

How To Teach OverseasChoose a location to teach.

You will need to determine where you want to teach. Different countries will have different requirements that they need from you. You will want to research where you might be teaching and what you should exactly know. Each country is different.

Have a passport and possibly a work visa.

You will need a passport to leave the U.S. and enter other countries. If you are going to be teaching English in other countries, then you will most likely need a work visa as well. You can’t work unless you have both of these!

Prepare for submitting your resume and for interviews.

Make sure that you have a quality resume, a great cover letter and that you are prepared for any interviews that may happen. These might be over Skype if you are not in the area of the school that you are applying at. Remember to keep it professional in Skype interviews and still dress professionally!

Are you interested in teaching overseas? What tips do you have?

 

How To Find The Best Rental

Getting into rental real estate can be a tough decision. However, if you are looking for a way to add passive income to your income each month, then rental real estate may be for you if you are prepared for it.

Here are tips to find a home to rent to others:

What will the location be?

Are you looking for a home right next door to you? I have heard of people buying multiple homes in a row to make things easier on them. They can then collect rent and check up on their rentals very easily, as everything is closer together.

How To Find The Best RentalOr, do you not care about how close the rental home is to you? I know of someone who rented a home out even though they lived around 45 miles away. They had to hire a property management company because they knew that they wouldn’t have time to fix things if something were to go wrong since they lived kind of far away.

Look for the best rental home for potential tenants, not yourself.

Many people make this mistake. Just because you like something, it does not mean that renters will. You need to figure out what renters in your area want and how you can meet their needs.

Does the neighborhood allow renters? 

Some neighborhoods do not allow renters at all, and there is just no fighting that. Before you buy a home to rent out, you should know the rules and laws of where you are buying. If the neighborhood that you buy in does allow for renters, then you may want to check out cheap landlord insurance from CIA just in case anything does happen from the renters causing damage to the property.

Does the home need a lot of work? 

You may find a GREAT deal on a rental home, but what if it needs a lot of work? Usually local government is much more strict on homes that are being rented than homes where the owner will actually be living in. You will probably have an inspector come to make sure that the home is live-able. Do you have enough cash so that the house will pass inspections? Or will it fail immediately?

Are you interested in getting into rental real estate? What tips do you have?

 

Interested in Flipping Cars?

Do you consider yourself great with cars? Can you tell whether something is an expensive fix or a cheap and quick fix? Can you fix cars yourself? If these scream “me, me me!” then you might be interested in flipping cars for some side income.

I will say that flipping cars can be a risky way to make some side money, but if you know exactly what you are doing then there is money potentially to be made by you.

Many states do have rules as to how many cars you can flip. This number may be as low as six (or even lower!). Any amount over this number usually means that you need to get a dealer’s license.

Related Post: How To Make Money From Your Car.

Find a potential car to flip.

You need to decide what kind of cars that you are going to flip. Are you going to flip classic cars? Or cars that are 10 to 20 years old? Will you be doing full on restorations of cars or will you just be cleaning them up? Some car flippers also like to stick to a specific car brand that they know how to work with.

Interested in Flipping Cars?

Photo by modomatic via Flickr

Try to get it at a deal.

In order for you to make any money, then you are going to want to find your car at a deal. Many times car sellers will price their cars low to sell it quickly, because there may be something wrong with it, or just because they don’t know the correct value.

Now, I did just say that there may be something wrong with the car. If this is the case, then you want to analyze whether or not you can fix the car and what the realistic and potential costs may be.

However, sometimes cars may just need a new battery (you would be surprised by how many people do not realize that), or the car may just need a really good and deep cleaning.

Make sure to get the title.

If you are going to buy a car, make sure that you know what you are doing so that you do not get scammed. Make sure to get the title and anything else that you may need (such as a bill of sale). You also need to get the title and make sure that there are no liens on the car.

When showing the car to potential buyers be safe.

You definitely want to be safe if you let someone test drive the car. You will probably want to ride with the person to make sure that they don’t steal your car.

Be safe when receiving payment.

There are many scammers out there. They might ask for all of your bank information, give you a bad check, and so on. Learn about all of the scams out there so that you know what you are dealing with.

Have you ever flipped a car? Would you ever do it?

 

Should You Advertise Your Company On Groupon?

The other day I received an email from a potential client asking if her company should use Groupon to advertise her business. It can be a hard decision. I’ve seen Groupon work very well for some companies, and then for others I have heard a few horror stories where Groupon did not help their company at all, and actually cost their company money.

Positives of advertising your company on Groupon:

You can attract a lot of new customers.

Groupon can really help get your name out there and have a lot of people buy your deal. Since your price will be lower, customers may be more willing to try your services out since there will be a discount.

You might make some money.

You might be able to sell a lot of your services and/or products which will hopefully lead to some sort of profit.

You might gain long-term customers.

If you advertise on Groupon, then a long-lost customer may find you. Maybe they never heard of you before you advertised on Groupon and they really enjoyed your services and/or products.

 

Should You Advertise Your Company On Groupon?

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Negatives of advertising your company on Groupon:

You can attract a lot of new customers.

Wait, this was on the positive side. How could this be a negative as well?

You might lose some money.

You have to pay 50% to Groupon. So if you advertise your service at a discount and charge these Groupon customer $10, then Groupon gets $5 and you get $5. So if you normally charge $20 for your service, then you are really only getting $5 which is a significant discount. Can you still make money with that discount?

You might only deal with bargain-hunters.

There is a chance that you may not gain very many long-term customers. A lot of people who use a Groupon may not be loyal to your services, and they may prefer to use a coupon every time. This is a risk that you will need to take.

 

Have you ever advertised your company on Groupon? Why or why not?

 

Different Ways to Advertise Your Business

When you start a new business, something important that you have to do is advertise your business. People can most likely only find you if you advertise your business in some form.

There are many ways to advertise your new business:

Have a website.

When someone searches your company online, they will most likely want to find something about you online. If they can find a professional looking and sounding website, this can then really help you. Whenever I can’t find a company that I want to use online, I wonder why they have no online track record. I like to have something that I can physically see and research!

Different Ways to Advertise Your Business

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Start a blog.

If you have a website, then you may want to think about starting a blog to go with your website. You can find someone who is an expert in your industry to write for you. There are many positives of this.

One positive is that it makes you look even more knowledgeable in your industry. Also, a future potential client may find the article on your blog before they actually find you. This is just an extra way to be found.

Engage in social media.

Do you have a Facebook, Twitter or Pinterest account? If not, then you probably want to think about getting all three. Engaging in social media can make you more personable to your clients and future clients, and it can also help drive clients to your website.

Advertise on Facebook.

Have you ever advertised on Facebook? At first, Facebook advertising didn’t seem like it was the most effective. However, lately I have noticed that Facebook advertising has worked for many companies. You just need to tailor your Facebook advertisement just right so that you can get the most clicks over to your website as possible.

Advertise on websites/blogs.

Another way to advertise your business is to advertise your services or products on a related website. An example would be if you have a wedding related company. You may want to advertise on a wedding blog so that you can hopefully gain new clients.

 

Have you ever seen a company not engage in any advertising? Were they successful?

 

What To Know Before You Airbnb

I’m sure you have heard about Airbnb. If you haven’t, well, it’s an awesome website that allows you to list your home, or a part of your home, to those who are traveling for a certain amount.

Some rent their whole home, some rent a just one room of their room, some rent a guest post, a boat, and so on. There are many different options, and even one option is to rent a “treehouse.”

Placing an ad on Airbnb for your home can be a good way to make some extra money. However, there are many things that you need to think about in order to keep you and your home safe.

Is your home even a place that people would want to stay?

In some areas, many people may be waiting in line to stay in your home or apartment. However, in some cities, no one may even be interested. Is Airbnb something that you are trying to live off of? Is that realistic for you?

What do you need to buy?

So, if your answer to the above question was a “yes,” then you need to think about what you need to buy so that people would want to stay in your place. Maybe you are only renting a private room and need to make it more live-able. You will want to provide a bed, blankets, pillows, and so on.

How much should you charge?

Look at similar places to yours and see what you need to charge. Charging $1,000 a night when your monthly mortgage is only $500 is probably not very realistic.

Is it legal?

In some cities, short-term leases on Airbnb are not even legal. You will want to make sure that what you are doing is legal in your city so that you are not forced to pay any fines.

If you are renting out your whole home, where will you stay?

Many people rent out their home even if it is their main home. You will want to make sure that you yourself have somewhere to stay. If you have to stay in a hotel, then your profit will most likely not be as high.

Find someone to manage the property.

If this is a place where you don’t visit very often, then you might want to hire a property manager. You will also need someone to clean the property as well.

Would you ever list your home on Airbnb? Why or why not?

 

What To Know Before Renting A Room In Your Home

A way to add some extra income each month to your life might be to rent out a room in your home. If you have extra space, then why not? So many people buy homes way too large for what they actually need, and have too many extra rooms. Some people even have rooms that just sit completely empty.

Here are some things to think about if you plan on renting out a room in your home to someone:

Can you trust the person who is renting from you?

Do you know who is renting from you? You should have some kind of idea of who you want to rent to. And, if you have a family, then you should definitely be more picky, as these people will be around your family a lot. If you have family, then you may only want to rent to those who you are very close to, just to be on the very safe side.

You want to make sure that this person will pay, will not destroy the house, is reliable, and so on.

What To Know Before Renting A Room In Your Home

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Is there value in it for you?

How much will you charge your renter? Charging something extremely small such as $25 is most likely not worth it to you. Place a realistic value on the room and your house.

Also, determine how bills and utilities will be split. Will they pay their share or will the rent amount include everything?

Make sure you have a contract.

As with most things that involve money exchanging between you and someone else, make sure that there is some sort of contract. You want to be covered in case anything goes wrong. It doesn’t matter if it’s a friend or a complete stranger, you should have a signed contract.

Have rules.

Make sure that you have rules when you are renting out a room. It will save you and your future roommate a lot of trouble.

Some examples of possible rules include: cleaning duties, who will pay for things such as toilet paper, trash bags, etc., and when they will be paid for, if any guests are allowed over, any noise issues, and so on.

Make sure that your city even allows for you to rent to someone.

Even if you think that no one may notice, you should still make sure that you are even legally allowed to rent to someone. In some places, you are not able to. You never know if a neighbor will report you, and then you will most likely be in a lot of trouble.

You are also being unfair to the person you are renting to as when it is all found out, they might have to find a place at the very last second.

Have you ever rented out a room in your home? Why or why not?

 

Mistakes Made When Flipping A Home

Before the economic downturn, it seemed like many people were finding homes to flip. This seemed to die down for a few years, and now house flipping seems to really be back. However, how do you know if house flipping is for you? How do you know if you can even make any money?

No matter what the TV shows say, flipping homes is not for everyone. Not everyone can make money, and it can be very stressful to flip a house and actually make a living from doing so.

 

Not knowing what you’re doing.

If you dive head first into house flipping and you don’t know what you’re doing, then this may be a recipe for disaster. You should know what you are buying, how much you can possibly profit from it, how you would profit from it, whether the amount will allow you to live off of it or whether it will be a part-time job, and so on.

Mistakes Made When Flipping A Home

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Not thinking about the buyer.

You might have a great idea when flipping a house to make it better, but would a buyer appreciate what you have done?

As a house flipper, you need to be fixing it up the way that a buyer would want it.

Not having the right skills.

If you have never installed flooring before and decide to try without any help or instructions in a house, then that may not be the best idea.

You should not assume that you can repair and replace everything in a house by yourself. Half-doing everything in not the answer, and a house will take much longer to sell if the material and labor are not up to par.

Paying too much for a house and marking the price up.

If you pay too much for a house that needs to be completely done, there is a chance that you may just lose money on the whole house flipping project. However, that is just how the game is.

Usually you cannot overpay significantly for a house and tack that on to the overall final price. If you buy a house for $150,000 and it cost $100,000 to completely fix it up, but the houses in the neighborhood are only selling for and valued at $100,000 then it would be very hard to make any money on the house that you want to sell.

This should all be a part of your plan when you determine whether or not a flip can be profitable to you.

Have you ever thought about flipping a house? Why or why not?