Buildium LLC's Blog

A guest post by Ashley Halligan, Analyst, Property Management Software Guide

Short-term rentals, of all natures, have become a hot commodity – and a controversial one at that. Short-term rentals can include vacation rentals and temporary housing, often sought by vacationers, business travelers, or people who have recently relocated while seeking long-term living arrangements. Either way, it’s become an ongoing topic of debate and an attractive investment opportunity for property owners and managers. In comparison to traditional rentals, short-term rentals can charge significantly higher rates given their nightly and weekly availabilities. Some property owners have earned as much as 25% of their mortgage in a single night. And during special events or peak rental periods in a given area, potential rental rates can be very attractive to property owners. Because of the income short-term rentals can procure, the opportunity for profit potential may be exponential – but there are several considerations that should be kept in mind.

First and foremost, it’s essential to keep the added costs of maintaining a short-term rental in mind. These rentals can be subject to Hotel Occupancy Taxes in certain cities, while other cities require specific licensures and inspections not required of traditional, long-term rentals. Penalties for not abiding by short-term rental laws in your city may result in hefty fines. There can also be increased insurance costs. Additionally, the cost of regular upkeep and maintenance, including utilities, should be calculated. In order to continually attract tenants, your property must be kept in prime condition, both functionally and cosmetically. From a marketing perspective, this could include offering unique amenities like sporting equipment or movie libraries, all of which are additional expenses. On the flip side, the regular maintenance of these properties has been credited with helping to increase neighboring property values.

By Ben Holubecki, STML Realty Group, Glen Ellyn, IL

One area that really took a hit during the economic downturn over the past few years was the ability to lease property to employees being hired and transferred. Nobody was hiring, and it seemed that very few companies were taking on the expense of transferring their employees to other markets. Although the job market continues to stagnate, overall it does appear that in many markets companies are beginning to add staff, and once again we are seeing an influx of transferring employees and executives.

By Salvatore Friscia, San Diego Premier Property Management, San Diego, CA

Property management is all the buzz these days, as it is becoming the saving grace of the real estate industry. Across the country, real estate agents and realtors who are unable to maintain consistent listings and sales have turned to property management as a steady income stream until the market “picks up” again. This increase in competition for property management accounts by quasi real estate agents/managers has lead many who want to build their property management portfolio to take on any and all assets.

By Ben Holubecki, STML Realty Group, Glen Ellyn, IL

One of the most important and difficult things to do as a professional property manager is to honestly assess your strengths and weaknesses and build your business around the part of the business that you do best. For those outside of the industry, a property manager is a property manager, and few people can or care to make any distinction between an HOA, multi-family, or single family manager. There are also few who make any distinction between competent professionals and slum lords.

It is not surprising that the general public can’t grasp these differences. What is surprising is that many of us as property managers and landlords can’t even make this distinction within our own companies and portfolios. I’m not pointing fingers here, as my company was as guilty as any other only a couple of years ago. Our management portfolio consisted of hundreds of single family units, multi-family buildings ranging from the worst of areas to the best, multiple commercial properties, as well as some associations. We had spent years building up our volume of managed properties without any regard for the type, quality, or location of the properties that we were taking on. We were happy that our unit count was growing steadily, but no matter how many units we added, it seemed that we were not making any additional profits month over month. It was frustrating, to say the least, so we made an effort to find out what the issue was.