Short-Term Rentals May Provide Homebuyers the Chance to ‘Test Drive’ Homes
Staying in a Home as an Airbnb Before Purchase
As a homeowner, you have a variety of options when it comes to monetizing your property. Listing your home for sale is an obvious option, but with the real estate market currently in flux, finding a buyer quickly can be challenging. In a softer market, homes can take longer to sell, and you may find yourself needing to generate income from your property in the meantime. That’s where short-term rentals come in.
Benefits to Both Buyers and Sellers
Short-term rentals, such as those listed on platforms like Airbnb, can be a great way to monetize your home while also listing it for sale. By renting out your home on a short-term basis, you can generate income from your property without taking it off the market. This can be especially beneficial if your home was formerly a rental property, as you can continue to generate income from it until it sells.
Buyer’s Perspective and Benefits
From the buyer’s perspective, you can open your home to buyers who don’t want to attend an open house, spend 30 minutes in your home, and quickly make an offer. By operating your home into a rental property while it’s for sale, renters can spend significant time in the home and determine if they truly want to buy it. You can be confident that if they do make an offer, it’s much stronger than one from someone who attended an open house for an hour. They’ve had the opportunity to walk around the neighborhood, meet neighbors, and gauge their commute. Seeing how the light hits every room in your home throughout the day, finding their favorite spot to have coffee in the morning or curl up with a book, and finding their favorite nearby restaurant are all incredibly valuable things to know before making such a large purchase.
If and when a former renter of your home makes an offer, the fact that they’ve spent time in the home means they are likely very serious about purchasing.
Seller’s Perspective and Benefits
Homes are now sitting on the market for extended periods of time. With interest rates continuing to rise, your former investment property may sit for months and months (possibly longer!). Your agent may encourage you to continually drop the price. With your home off the market, months of expenses accumulate, and it may begin to feel like a money pit.
Monetizing during this period of time can help reduce the stress of expenses piling up. You’re also making your home much more visible to potential buyers – each guest becomes a possible buyer. We all want to sell our homes to people who truly love them, and the best way to determine if you love a home is to spend considerable time there.
For every potential homebuyer who stays in your short-term rental property that’s also for sale, the likelihood of closing increases.
Benefits of Monetizing Your Home While Listing it for Sale
Generating income isn’t the only benefit of operating your home as a short-term rental:
Here are six more reasons to consider this option:
Short-term rentals allow you to choose when and how often you want to rent out your home. You can list it on a short-term rental platform and only accept guests when you aren’t using the property yourself. This allows you to generate income from your home while still maintaining control over when it is available for rent.
Short-term rentals increase the visibility of your home to potential buyers. By listing your home on a platform like Airbnb, you can reach a much wider audience of people who may be interested in purchasing a home in your area. This helps increase your chances of finding a buyer for your home, especially if it’s in a desirable location.
3. Tax benefits:
Renting out your home short-term may provide tax benefits. Depending on your circumstances, you may be able to claim deductions for expenses related to your rental property, such as mortgage interest, property taxes, and insurance.
4. Increased demand:
Due to the current state of the real estate market, many homeowners are opting to sell their homes and rent instead. The result is increased demand for rental properties, which is good news for homeowners who are looking to monetize their homes. By listing your home on a short-term rental platform, you can take advantage of this increased demand and potentially generate more income from your property.
5. Potential for higher returns:
Short-term rentals often generate higher returns than traditional long-term rentals. In fact, a short-term rental property may generate twice to triple the amount of monthly rent compared to a long-term rental (source). While long-term rentals can provide steady income, they may not be as profitable as short-term rentals, especially if they’re located in a popular vacation destination. Not having a long-term tenant also makes your home a more feasible purchase for most buyers. By renting out your home on a short-term basis, you can potentially earn more money per rental period, which can be especially beneficial if you are trying to sell your home in a softer real estate market.
6. Your Home Stays Buyer-Ready:
With frequent guest turnover, short-term rentals receive regular, professional-level maintenance and upkeep much more often than long-term rentals. This means that when you are ready to close, your home will be move-in ready and pass inspections with flying colors.
Two Successful Short-Term Rental Properties Currently Listed for Sale
At Open Air Homes, we’re currently selling two successful rental properties. The first, a home in the Hollywood Hills, nets about $15,000 a month and has showings around the rental schedule. As the seller of this home, I’m much less concerned about it sitting on the market while we find an ideal buyer.
The second home is a dreamy triplex in Venice Beach that’s available for 30+ day rentals. Each of the three bungalows rents for about $6,500 a month. We have established agreements with the tenants that allow us to occasionally show the home to interested buyers. We provide a free deep clean in exchange for an hour’s tour during their stay, and our guests are happy with this exchange.
Monetization & Effortless Ownership with Open Air Homes
At Open Air Homes, we pride ourselves on offering the best of Airbnb, short-term, and mid-term rental management. From bespoke design to stunning photography and comprehensive marketing, monetizing your home has never been easier. Along with our knowledgeable real estate agents at OpenAiRE Brokerage, we make the rental-to-selling process streamlined and stress-free.
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