Little over a month now...

[BandB]

I am not sure being a landlord is a good idea for anyone these days, but I also think if I was I'd prefer AirBnB to a long term tenant.

My brother has a rental condo in a resort designed for short term rentals.

He exclusively rents via AirBnB and vets the applicants, never taking a reservation from a new member or one who has no reviews. He turns down a lot of requests. It's a party kind of resort.

AirBnB also theoretically takes responsibility for people who trash apartments.

My brother has never had an issue, over several years.

My brother's neighbour (a RE agent) rented long term to a tenant who proceeded to stop paying rent ($2,500 weekly) for the next 8 months, the exact amount of time he could get away with it before being evicted.

Just days before the tenant could be legally evicted a mysterious fire happened in the condo (I was a few yards away in my brother's rental).

Later the tenant was charged with taking a hammer to the inside of the building's elevators.

He was finally removed as the condo was deemed unfit for living. I suspect the tenant knew or thought insurance would have to find him a new place to live. He might be right, I don't know.

Anyway, with laws greatly favouring tenants over landlords these days, AirBnB or similar is the only way I would go. I am not sure, but I don't think a short term tenant has the same ability to stay for months without paying.

Just my 2 cents.

p.s. these tenant laws are in Canada, and have nothing to do with the pandemic. Any tenant can do the same, if they know how to play the game.

But all you've really outlined is all the reason to very carefully screen potential tenants. They must be screened by professional tenant screeners, not just any credit screening. Many who are credit worthy have horrible records as tenants.

 

[LakeMJim]

No, there is a real difference now in the 'tenants rights' of long term tenants vs short term.

It's so drastic that I think it tilts the balance completely in favour of having short term tenants.

As you know, during the pandemic the US made it legal for people to stop paying their rent.

I don't think that's possible with AirBnB who have to pay upfront for the entire period.

I am currently renting an apt in Vancouver for 1 month, paid full in advance. I don't think I have the ability to use tenants laws to stay here without paying for another 8 months, whereas long term tenants do.

Even the best tenants can turn into a nightmare if the government tells them it's fine.

 

[LakeMJim]

Short term tenant's rights

I just looked up what the rules are, and of course every state and province is different, but it looks like as long as the 'guest' stays less than 30 days, they have no tenant's rights and do not have to be evicted.

All you need is a keypad lock on the door and when the short term guest's time is up you can change the entry code.

So if it was me, in this current environment where there are 'popular' movements to not pay rent to evil landlords, I'd stick with weekly rentals if allowed.

If you have to go longer term, I would go to extreme lengths to check not just their ability to pay, but their willingness as well. I'd be looking at their social media before even replying to an applicant.

 

[BandB]

I just looked up what the rules are, and of course every state and province is different, but it looks like as long as the 'guest' stays less than 30 days, they have no tenant's rights and do not have to be evicted.

All you need is a keypad lock on the door and when the short term guest's time is up you can change the entry code.

So if it was me, in this current environment where there are 'popular' movements to not pay rent to evil landlords, I'd stick with weekly rentals if allowed.

If you have to go longer term, I would go to extreme lengths to check not just their ability to pay, but their willingness as well. I'd be looking at their social media before even replying to an applicant.

You're speaking of a specific area in Canada perhaps, but in each US state it differs. In Florida, for short term rentals you must get a vacation rental license and you must collect tax from the tenant. The tenant falls under the transient lodging laws and must be given notice that you want them to leave. However, once given that notice they are guilty of a crime, a misdemeanor. You then notify law enforcement and they will arrest the tenant if they refuse to leave. Once arrested they are considered to have left and all their tenancy rights over. You have to follow this procedure though, cannot simply lock out.

However, even on longer term leases, Florida eviction is simpler than most states in normal years. Month to month just requires 15 days notice. Expired leases require none. Most evictions that are not approved are due to failure to properly file the paperwork.

The wrong or bad tenant is very costly regardless. More for the damage they might cause on top of rent lost. AirBnb tenants have been known to cause thousands of dollars worth of damage. Some even greater damage though has been homes rented to athletes or celebrities or even corporations using them for event parties and entertaining. There have been waterfront homes leased for FLIBS with over $100k damage. The worst AirBnB has been fraternities and sororities.

We've found the key is active local management. Our "sister" is managing quite a few homes now and both short term and long term rentals.

Your comment on social media is a good suggestion. Also, rather than blindly giving them a combination to enter, meeting the renter in person on their arrivals. One thing Tiffany is doing is providing many with a housekeeper and/or chef. This is not only profitable, but means someone is on site daily seeing everything going on.

 

[Mischief Managed]

1. We are in NH. We are required to obtain a state "meals and rentals" license and we have to pay state tax every month. Our place is not treated as a long term rental by law, it;s the same as a hotel room, so we don't need to evict people if they are problematic.
2. We have a key pad entry door knob and the guest codes expire at check out time.
3. We have a strict "no additional guests" policy and our property manager monitors the ring doorbell camera to ensure the correct number of people are going into the condo.
4. We only rent to age 25 and older.
5. We have a sound monitor in the condo and if it alarms once, the tenants get a warning, if it alarms a second time, they tenants are kicked out.
6. Our neighbors also use the same property manager when they rent and won't hesitate to call the managers about any problem guests.

Our unit has been a short term rental unit in the warm months and a "Winter rental" during the cold months since the condo building was constructed in 2016. We found out from our neighbors that our unit has never had any problem guests. We are doing everything we can to keep it that way. We also found out, through our neighbors that have had problem guests, that Airbnb takes care of the issue and goes after the guests for the money. I know things can suddenly turn sour, but it really does seem like a very acceptable risk. It helps that we have zero sentimentality about anything that's in the condo, we bought it fully-equipped.

 

[OldDan1943]

"All you need is a keypad lock on the door and when the short term guest's time is up you can change the entry code."

and how do you prevent a short-term tenant from making duplicate keys?

 

[BandB]

"All you need is a keypad lock on the door and when the short term guest's time is up you can change the entry code."

and how do you prevent a short-term tenant from making duplicate keys?

I doubt they're using keys. Likely combinations or cards like hotels use.

 

[BandB]

1. We are in NH. We are required to obtain a state "meals and rentals" license and we have to pay state tax every month. Our place is not treated as a long term rental by law, it;s the same as a hotel room, so we don't need to evict people if they are problematic.
2. We have a key pad entry door knob and the guest codes expire at check out time.
3. We have a strict "no additional guests" policy and our property manager monitors the ring doorbell camera to ensure the correct number of people are going into the condo.
4. We only rent to age 25 and older.
5. We have a sound monitor in the condo and if it alarms once, the tenants get a warning, if it alarms a second time, they tenants are kicked out.
6. Our neighbors also use the same property manager when they rent and won't hesitate to call the managers about any problem guests.

Our unit has been a short term rental unit in the warm months and a "Winter rental" during the cold months since the condo building was constructed in 2016. We found out from our neighbors that our unit has never had any problem guests. We are doing everything we can to keep it that way. We also found out, through our neighbors that have had problem guests, that Airbnb takes care of the issue and goes after the guests for the money. I know things can suddenly turn sour, but it really does seem like a very acceptable risk. It helps that we have zero sentimentality about anything that's in the condo, we bought it fully-equipped.

And you've outlined how to prevent things from going sour.

Only difference I see is that in Florida you do still have to semi-evict through telling them to leave and then calling law enforcement but if law enforcement has to remove them, then it's a crime.

With cameras and ring type bells, monitoring is far easier than ever before.

Even on longer term rentals it's best to monitor. The manager for our sisters management company in SC regularly goes to homes as courtesy checks to find out any problems they're having. Clearly the greater reason is to see any damage or any things going on that shouldn't be.

Whether you do it yourself or have others do it, the key is "professional management."

 

[LakeMJim]

The left coast

Yes I am on the left coast of Canada where the politics are similar to Seattle, Portland or Berkeley.

Landlord/tenant laws are skewed very heavily in tenants' favour.

I think anyone wanting to be a landlord here is crazy, but the consistent increase in RE prices is a temptation few can resist, even though they know tenants can be a big problem.

So much so that many investors in RE prefer to forego rent and leave their condo investments empty. Imagine that. (There's also an element of wanting to sell eventually and claim the unit was 'never lived in'. Hard to see how that outweighs the loss of rent for several years)

Which lead to the infamous 'Empty Homes Tax' to try and force investors to sell or find tenants.

Government and bureaucrats always going after the symptoms and not the cause.

p.s. I am a tenant at the moment, and probably for the foreseeable future.

 

[AZ2Loop]

I bet you will do well!

Congratulations on the lifestyle changes, Mischief Managed. It sounds like you have done your homework, and know your market on the vacation rental. You will hear a lot of cautionary tales, but I suspect you will do quite well. Our experience: We had a vacation rental property 1400 miles from our primary residence for about 14 years. We managed it ourselves from that distance for 12 of the 14 years. It slept 14 people, so I was worried going in that we would have too many "wild party" groups and lots of damage. We didn't. It was a great experience. In 14 years, I can count the problem tenant guests we had on one hand. I did hardly any vetting, but listened to my gut/instincts with guest inquires. The price kept out the younger crowd. We had about 270 rental contracts, averaging about 12 people per reservation, so that is over 3,200 people who stayed at that lake house over the years we owned it. I probably only met 3 or 4 of them -- yet had hardly any issues. As I said, we were 1400 miles away. It was a fair amount of work each summer coordinating the reservations, but worth it. We just sold the home this summer. Lots of great memories and it served us well. I wish you the same kind of success.

 

[OldDan1943]

I am a landlord of 1 boat slip.
I asked the dock master if I fall under the same rules of a land based landlord. (subject to the new Fed rules) He said NO.
ie, if they fail to pay the rent can I toss them. He said marinas are a bit different. Of course he is not a lawyer (SHRUG)
If my current tenant fails to pay the rent, I'll just chain his boat to the dock and file the necessary paper work and notify the USCG and the sheriff.
In all the years I have been in this marina I have only heard of one renter who thought he was too good to pay rent. (big boat)
Chained his boat to the dock, served an evection notice etc. Next day, all the rent was paid, dockmaster unlocked his boat and the owner moved the boat.
I have also heard of "spiriting" a boat away, hiding it from the owner. Not too sure about that one.
Seems boat owners' are real proud and dont want their boating ability restricted. Of course, we dont have trashy boats in the marina.
There is a 130ft boat that belongs to a Arab prince or king.

Interest note: we are about 4 miles to the first cut and all bridges are 'high clearance bridges. I suspect if there is a 'run to the sea', that 'no wake' rule will be difficult to enforce.

 

[LakeMJim]

I spent my Sunday walking around the Fisherman's Wharf area of docks at Granville Island, Vancouver.
I saw a few beautiful boats, Nordhavn, Grand Banks, etc.
But I was very surprised to see the number of complete wrecks in the water. Some covered in tattered tarps, many with junk strewn all over them.
There were a handful of owners maintaining their boats, but I would say at least 50% (probably much higher) of the boats were in total disrepair and have not had even basic maintenance in many years.
I can't quite understand it, as that marina cannot be cheap. A few of the sailboats I saw would not be worth the cost of 3 month's moorage.
I have a feeling this might not be unusual for 'urban' marinas?

 

[Jeff F]

I spent my Sunday walking around the Fisherman's Wharf area of docks at Granville Island, Vancouver.

I saw a few beautiful boats, Nordhavn, Grand Banks, etc.

But I was very surprised to see the number of complete wrecks in the water. Some covered in tattered tarps, many with junk strewn all over them.

There were a handful of owners maintaining their boats, but I would say at least 50% (probably much higher) of the boats were in total disrepair and have not had even basic maintenance in many years.

I can't quite understand it, as that marina cannot be cheap. A few of the sailboats I saw would not be worth the cost of 3 month's moorage.

I have a feeling this might not be unusual for 'urban' marinas?

I've visited Granville Island and assumed that the run down boats are liveaboards. I see that in Toronto, where marina costs are cheaper than local rent. Lots of the full time liveaboards don't maintain their boats in operational status.

 

[LakeMJim]

I think that must be it Jeff. Rent here of course is very high. I doubt the boats I saw could operate.
A little incongruous seeing a total wreck covered in bird droppings in a slip 10 yards away from a gorgeous Ocean Alexander 50 something footer.

 

[BandB]

I have a feeling this might not be unusual for 'urban' marinas?

It happens in some areas, but other areas the marinas simply won't allow it.

 

[Mischief Managed]

Another update:


Our first full season of living aboard here in NH started on May 6 ended on October 20. We had a great time and inspired several other couples near us in our marina to live aboard as well. It made for a tight-knit community that felt like family and it was absolutely wonderful. We were all sad when the season ended.



The condo we rented and lived in all last Winter, and bought in April, was rented from May 15 to Oct 15 by short-term tenants with very few gaps. We grossed 9.8% of the purchase price of the condo in the 5 month span it was rented and there were zero problems with our tenants. We paid 20% of gross revenue to an excellent pair of young and ambitious guys that managed everything about the rentals and we will use them again next year; they made it utterly effortless for us and delighted our tenants as well.


Our net rental income is almost enough to pay all our housing bills (we have a mortgage for 2/3 of the purchase cost of the condo) for the year. We are basically living here for just over 6 months this year, for free. According to Zillow, the condo has already appreciated 9.6% since we bought it in April too, so our 1/3 down payment out-of-pocket investment has appreciated 28.9% in 7 months. As you can imagine, we are pretty chuffed.



We are currently looking for another rental condo to invest in, but are waiting for a cream puff deal.



If you are on the fence about down-sizing your home and moving aboard part-time, I say go for it. We are having the time of our lives and have no regrets.

 

[BandB]

According to Zillow, the condo has already appreciated 9.6% since we bought it in April too, so our 1/3 down payment out-of-pocket investment has appreciated 28.9% in 7 months. As you can imagine, we are pretty chuffed.

We are currently looking for another rental condo to invest in, but are waiting for a cream puff deal.

You were doing fine until you got to "According to Zillow." I must point out that Zillow is shutting down their home buying and selling part of their business. Why? Well, of the homes they sold last quarter, the lost an average of $80,000. Just imagine though the thousands of homes they've been unable to sell.

While Asking prices and Zillow and other online prices have continued to rise, the actual selling prices are leveling off and many homes that a few months ago were selling for listing price plus are now selling for less than listing price. Many of the homes with high asking prices are not selling and converting to the rental market which has also been highly inflated. So, just can't trust Zillow's Zestimates.