REI Wealth Magazine Featuring Kaaren Hall with uDirect IRA Services | Page 16
when the vineyards are more in bloom. Other likely have an additional cleaning fee that may or
cons include the movement by cities to either tax may not match the actual cost of cleanup. In
the income via a “transient” tax or to not allow addition, the Air BNB rental will need to be
rentals for shorter than 30 days. This has recently furnished including bedding, towels, and other
been a big issue as neighbors complain about necessities whereas most typical rentals usually
noise, constant flow of traffic, and so many come unfurnished. This adds to the cost of the set
different renters coming and going as well as the up and continuing maintenance of the Air BNB as
belief that property values go down when living well as having someone keep an eye on the rental
next to this type of rental. Since the number of to make sure the unit is in the same condition from
renters using Air BNB for more than 30 days is tenant to tenant.
much smaller, the odds of getting a renter for
more than 30 days to make up for the lack of As with Uber, Air BNB has gained traction. With
days being rented in totality as compared to the Uber, it took some time for the general public to
desired occupancy of the Air BNB rental are very see that this was similar to taking a taxi and, once
slim. In addition, someone desiring to rent under people got the hang of it, it became the norm. With
these circumstances is usually not willing to pay Air BNB many vacationers feel comfortable staying
the typical nightly rent for the whole 30 days. in someone’s house that they know has been
Either the “landlord” will advertise a bargain rate prepared for them in the same way a hotel makes
for 30 days, or the prospective renter will up a room. There is no room service with Air BNB,
negotiate a lower rent. A typical $300 per night nor are the sheets changed on a daily basis, but
rental using Air BNB might go for $150 per night the costs can be quite attractive to the renter as
for a 30 day rental. well as the usually much larger space they get by
staying in a house versus a hotel room.
Security deposits are normal for both Air BNB
and typical rental situations, but Air BNB will most
A r e
I n v e s t m e n t s
i n T e m p o r a r y
R e n t a l s
a G o o d
I n v e s t m e n t ?
From a lending standpoint, most lenders will
severely discount the anticipated rent expected
from the borrower who wants to buy a house to
place in the Air BNB system. In fact, many
traditional lenders will not look at lending in these
circumstances with unknown income. Traditional
lenders may impute income if the rental is a typical
leased situation [although usually discounted
somewhat], but Air BNB income is not like a hotel
that has many rooms. Either the Air BNB unit is
100% rented or 100% vacant. Hotels have the
luxury [from a lenders point of view] that the hotel’s
experience may show 6080% occupancy.
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