How to create value and get owners permission to short term sublet

This is what all my nomadic friends do.

 

@wylie I specified in my original post, it would be short term rentals exactly like AirBnB or similar. We are certainly not planning on opening a halfway home in a rental property, as you and several others have alluded to.

Also buying a home (which we hope to do in the not too distant future) is not exactly an either or option, at least not for us. Obviously we need a large deposit and then we'd have mortgage payments to cover, this also locks us into one place for a very long time and as you may or may not have gathered we live a somewhat nomadic lifestyle.

When we do eventually buy our own place, we do plan to do the same with our own home but wondering and discussing (theoretically as is the benefit of a forum) - if we could do it in a rental property before that with the express permission of the owner, best case scenario we reduce our rent and we can save a little extra to buy our own place sooner and we take more TLC than a usual renter because it is mutually beneficial for us to do so. We understand there would be lots of logistics but we run our companies remotely so we are pretty comfortable with that type of thing.

While I appreciate your advice for alternate ways we could approach this my original question was and still is: What would appeal or are the most important aspects to homeowners to agree to sublet and why?

 

Just wanted to thank everyone for their input, the responses are almost exactly what we had anticipated but it's good to have an active discussion.

So far it seems there are two camps, those who are open to the idea of subletting and those who are terrified of 'what if' or traumatised from a negative past experience, the reality is there are no guarantees in life (except perhaps that there is almost no way of convincing those in the second camp).

If my husband and I, do decide to go down this path we will try and go direct to the landlord where possible as we have spoken to PM's who have said they'd feel it was extra work for them and unlike the homeowner they don't significantly benefit from 10-20% extra rent. For anyone reading this in the future.

I do wonder as an aside, of those who are deeply against subletting especially short term, have you personally stayed in an AirBnB property for example?

 

I don't think people are against subletting in general.
But people here that are property owners are against having their tenant run a AirBnb out of their property... it comes down to skin the game, a tenant can just run off, and for me, to help mitigate would be for the tenant to pay me a very large bond that can cover repairs (ie. Put some skin the game)

 

@wylie not a nerve, just clarifying to make sure there is no misunderstanding as the examples you provided initially where way off track.

Thanks anyway and @neK I also understand your position loud and clear. Its a no from both of you and thats totally fine.

 

@Awesome Adventure Couple I think you need to tell us about some of your Awesome Adventures as a Couple...

 

Having said I would never allow it, back to your original question.

There has to be something in it for the landlord.

These simply maintain the situation as if you were present. No incentive for the landlord to allow sub-letting.

And if there IS a big problem with an unruly tenant or out-of-control Airbnb party, who are the police going to call? Not you, off in a remote FIFO camp. It will be the landlord copping the flak. Extremely unlikely sure, but news reports show these things DO happen.

I reckon you would have to offer at least an extra $100 per week to get the landlord to even consider it. And that is every week of the lease, not just when you choose to be absent.
Marg

 

Yes tell us more OP .Have you thought of a cheaper, second hand caravan or two? You can short term rent these also whilst you're away. If you get too hot/cold drive it somewhere else...There are some very cheap blocks of land in regional areas, some with a garage on there for storage...could be a solution for you.

We're building a dual occ house at the moment so we can rent out one floor whilst we travel and have somewhere to leave our stuff. In the past we've left all our things in a garage and just rented the house out without the garage.

 

I have a client doing this with around 100 properties being sublet. Its doable. Owners have agreements in place with my clients to sublet.

 

@MikeLivingTheDream - so your client is short term subletting multiple individual rental propertys?

Is he running a rental arbitrage business?

Do you happen to know what the owners terms usually involve?

 

We currently have a professional company (Made Comfy) manage our AirBNB properties for us.

Don't see how the proposed arrangement would be superior to that as a landlord.

 

@Tonibell thanks for sharing - as a renter we could also employ the services of a similar company, this might circumvent a lot of the management concerns with us being out of the country, the only difference that we live in the home part time. And if we are paying more to the landlord then it's a win for them but with less risk, since we'll be liable for rent regardless.

 

This motto doesnt really work when you are asking landlords to take extra risk for little benefit. Take a risk, live a little! For what?

Airbnb doesnt mean subletting.

Your not presenting any benefits to the owner.

Being liable for rent is pretty thin comfort when your a nomadic couple. You disappear to thailand, what happens?

 

No thank you

 

yes they are. not really rental arbitrage as they provide a lot of valued add. terms confidential

 

@MikeLivingTheDream
The setup you're describing sounds a little like that "worse case" scenario others have said I was describing.
From a landlord perspective it's great as long as the rental keeps coming in. Only problem is at the end of these there is no "make good" clause, or if there is, its mixed in between "standard wear and tear" whereby that main person leading does as minimal or shoddy work to bring a place up to scratch.

 

rent is paid regularly at a premium. who said no make good clause ? in fact these have a unique condition which makes it attractive. both gave up $200k jobs to focus on it full time over 3 years ago. that has well been replaced. worst case ? i have seen the figures...nothing worse about it at all.

 

Okay I’ve done this.

Easiest way to explain is to break it down to its components.

1. Subletting
2. AirBnB
3. Renting Holiday Home

1. Getting permission from owners is simple enough. Pick your area, reach out to agents, offer long term lease, regular cleaner, take on minor maintenance, essentially treat it like your own place. More money is the last thing I offer. Just like buying a property, you make your money at the buying stage. If the rental market is struggling, pretty easy to negotiate and lock a place down. Even in tightly held areas, the owner may just want to know they have a long term tenant who will maintain the property as if it were their own. I’ve done this a dozen times, and had permission to knock down walls, repaint, lock in 3 year leases, and so on. Another way to look at it, is as if it were a commercial deal.

2. How will you manage it, will you have someone full time? Do the numbers actually stack up on this property. You will deal with the usual tenancy issues, Airbnb tenants have been spoiled, they will ask for the world, you have to supply all extras such as hair dryer etc. Organise cleaner, and inspections if you do not have a manager who takes 12-20% of your income. I HIGHLY recommend you do your own market research, IMO like Uber, the Airbnb market is quite saturated, we made most of our money from bookings.com. Most people will talk about their best weeks renting a house, and completely ignore the insane seasonal variability which will kill your profits.

I set one up at an apartment where the strata management wrote a letter politely asking us to desist. I called a lawyer, and we drafted a letter politely asking them to jump of a bridge. They let us be. However, I’m hearing there is new legislation passed that will make it harder to Airbnb a place, limiting rental to 3 months a year? I can’t recall the specifics.

3. Just like renting a holiday home, the peak period where you make your money is exactly when you want to use it. It’s different to rent your PPOR whilst you’re travelling for the summer, and making summer $$$. This is most prevalent near the beaches, though it will somewhat affect inner city apartments/homes also. When were you planning on using these properties?

The overarching question is, what is the point of this? To save money? Unless you plan to use the places off-season, and as a means to reduce expenses, this is an emotionally arduous strategy.

From my experience, airbnb is great for pocket change on a PPOR, not a worthwhile long term strategy. May be easier to sublease a house + granny flat combo, rent the house, hold the granny flat, that may reduce costs.

Hope it helps.
NHG.

 

With everything there are good operators and bad ones. Perhaps the ones I saw were bad ones. The condition of the place (it was about 5 years old) were terrible.

The structure from what I could work out was
Person A rents property
Person A connects all utilities in their name
Person A makes contacts within the specific race community
Person A hires a student to manage the ingoing and outgoing of tenants.
Generally things aren't reported because in their view (which I heard them say) - its better than the conditions they were use to in XX country.