Blog Post

Is a Short Term Rental a Real Estate Asset I should Consider?

Dustin Edwards • November 14, 2020

Long Beach is a Prime Vacation Destination, is it Right for Your Investment?

Short Term Rental Image
One question we get asked about on a regular basis is regarding short-term rentals. With the continued popularity of platforms such as Airbnb and VRBO and our location in Long Beach we understand why this is a consideration for many of our property owners and potential clients. While we don’t currently manage short term rental properties we understand their value to an investors real estate portfolio and wanted to share more about these investments to help you decide if it is a match for your real estate goals.

What to Consider with a Short Term Rental
  • Occupancy - With a short term rental a key indicator of how much money you will be able to generate is your occupancy rate. Occupancy rate is the number of days you will have your property rented in a given month. For example if your property was occupied 15 days out of a 30 day month then you would have a 50% occupancy. Understanding occupancy is essential, especially if you are considering buying a property specifically as a short-term rental property. Calculate conservatively on a 40-50% occupancy rate and if you beat that, then you are only doing better!
  • Daily Rate - Having a short term rental is like having a hotel and you will be advertising a rate per night of stay. For popular weekend destinations, like Long Beach, the weekend rates (i.e. Friday - Sunday) do tend to be higher than on the weekends. Plan for the variety of rates when you develop your model.
  • Annual Gross Revenue - Your annual gross revenue is driven by calculating the number of days occupied by your rate for those days. Keep in mind that this number can look substantially larger than your mortgage commitment (it should anyway), but there are fees to acquire that revenue that you should consider as well.
  • Fees - With a long term rental, generally you are only served with a property management fee. With a short term rental you could expect a property management fee (if you aren’t managing it yourself), cleaning fees (if you can’t pass on to those who stay at your place), and transactional fees from the platform (i.e. the host fee). As you evaluate the potential benefit of your short term rental consider that the host fee alone can be anywhere from 3% to14%+ depending on the platform.
Forecasting Potential Revenue for a Short Term Rental

If you are considering purchasing a property with the goal of making it a short term rental the occupancy rate and daily rate can vary dramatically based on the location, property, number of occupants possible, etc. While we certainly could help you with a close annual revenue estimate you can use a calculator by AirDNA to help you estimate your true earnings. This is a great free tool you can use to see if based off of what you are putting down, your expected mortgage, and the associated market factors (i.e. oppancy, daily rate.etc.) will yield a positive cash flow.

When it comes to deciding if a short term rental is your next real estate investment (even if it’s your first) there are many items to consider. With our knowledge of the rental market and real estate agents available we can even help you to purchase your first short term rental asset. To help you understand your options you to call us today at (562) 888-0247 and let us know you’d just like to discuss short term rentals. 


Share this post

By Dustin Edwards January 10, 2025
Having clear communication with your tenant is essential for maintaining a healthy landlord-tenant relationship. By being transparent in all relevant interactions, landlords can prevent misunderstandings while resolving repairs and disputes efficiently while improving tenant satisfaction. Having good communication with your tenant is beneficial for landlords too. Effective communication also protects your investment property. Remember that while your tenant is living in the property, landlords need to take care of the repairs. Below are the three best things to do during tenant communications. Prompt Responses Addressing tenant concerns quickly is essential for building trust and maintaining a positive relationship. Tenants feel valued when landlords respond quickly, knowing that their needs are being prioritized. Building this trust not only enhances your tenant’s satisfaction it lowers the possibility of conflicts or misunderstandings to arise. This ultimately creates a healthy and successful rental experience for you and your tenant. Some of the most common inquiries will oftentimes include repair requests, among others. As an example; if your tenant reports a leak under their faucet and the repair is delayed, this can be damaging to your landlord-tenant relationship, as well as your property. If left ignored, that leak can result in hundreds of dollars in water damage and a vacancy . Which can further affect our bottom line negatively. For landlords with multiple properties, this can become difficult to keep track of. A property manager can help with scheduling repairs and communicating with your tenant on your behalf. Document Everything Keeping a detailed record of all interactions with your tenant is an important element when managing a property. There are many choices for documentation including email, text, or written notices. Although many property management companies and landlords have opted to use apps or dedicated tenant portals to log communications. A great example, for instance, a tenant may claim they’d reported a repair issue that was never addressed, if everything is to be documented, both you and the tenant would have a copy of the request. Maintaining transparency with tenants. Having thorough documentation ensures agreements and requests between all parties are clearly tracked. Documenting communications with your tenant provides landlords with a foundation for addressing misunderstandings, or disputes if and when they arise. Provide Regular Updates Regular updates show tenants that their landlord is organized and has an attentive approach to managing their property. Giving tenants ample time for maintenance, inspections or policy changes is a simple way to build trust with your tenants while showing your professionalism. Giving tenants advanced notices reassures them that you’re aware of how changes can affect them and you understand that time might be needed in order to adjust. Surprises are best kept for birthday parties. Proactively notifying tenants of changes helps clear the communication channels and minimizes disruptions which helps tenants feel valued and satisfied. These small yet consistent efforts can contribute to a positive tenant stay, which can encourage lease renewals and long-term tenancy. Additionally, having a good relationship with your tenants can give you a great reputation which can provide you with leads when looking to fill a vacancy . It cannot be understated the importance of communication for a healthy landlord-tenant relationship. Even if your tenant may not agree with some of the decisions a landlord needs to make, by giving your tenants ample time to process the change tenants generally are more accepting of said change. If you’re having trouble communicating with your tenants or if you need help managing Beach City rental property, we invite you to call us today at (562) 888-0247 or complete our Owner Application online .
By Dustin Edwards January 2, 2025
Keeping tenants safe, translates to happy and long-term tenants. Read to discover 5 Inexpensive ways to keep your tenants safe.
By Dustin Edwards December 26, 2024
Owning a rental property near the beach offers an undeniable charm, with amazing ocean views, refreshing sea breezes, and year-round access to beach activities. Unfortunately, the winter season presents many unique challenges for landlords. Which if left ignored can result in higher turnover rates and additional maintenance to your rental property. Below we’ve compiled a short list of five unique challenges for beach properties in winter and ways to help deal with them. Coastal Humidity Coastal humidity is challenging year-round, as it may cause issues like mold, mildew, and accelerated wear from the salty air. Unchecked moisture can lead to accelerated corrosion on surfaces and even structural damage if left unchecked. For this, it's good practice to have regular inspections and preventive maintenance to protect your investment. Although, during the winter season, the coastal humidity can feel worse for your tenants. To help with this, consider installing a dehumidifier and ensure the property is properly ventilated. This is also a great time to seal any leaks or drafts to prevent excess moisture into the rental property. Many tenants resolve this issue by using the HVAC system more frequently which can add unnecessary wear and tear to the system. Coastal HVAC systems oftentimes have a shorter lifespan when compared to their inland counterparts. The humid and salty air can cause corrosion that reduces their efficiency which puts more strain on the HVAC system. During the winter season, excessive heater use may reveal wear and tear caused by salt exposure. For this, regular servicing is even more important in preventing breakdowns, maintaining reliable performance, and providing tenant satisfaction . Holiday Tourism During the holidays, Long Beach , much like many coastal cities, receives an influx of tourism. While necessary for many small businesses, holiday tourism can be a hindrance to some tenants, depending on the location of the rental. With tourists, comes increased noise levels from cars and people. To help alleviate this, you should consider installing proper noise insulation and soundproofing. This can be a significant investment especially for soundproof insulation as this needs to be done with exposed wooden studs. Alternatively, noise-reducing windows and paint can be used to mitigate some of the noise from holiday tourism. Additionally, parking may become a nightmare especially when parking spaces are limited. This can leave long-term tenants frustrated. While adding dedicated parking to your rental may be impossible for some. For rental with dedicated parking, ensure that your tenant’s space is protected from people who steal parking spots from local residents. Outdoor Maintenance Outdoor spaces are important for beach properties, although they demand extra care during winter. This is due to how marine layers can damage beach rental properties . Sand and debris can accumulate and make patios, walkways, and entryways less inviting. While heavy rainfall may damage furniture, railings, or fences. Regular cleaning and maintenance keep these areas safe and appealing for tenants. The sand and salt can cause premature corrosion on items left outdoors. Pests Winter can drive wildlife like seagulls, rodents, or even raccoons to seek shelter in warmer areas such as your rental property. During the winter, pests can create unexpected challenges for beach properties. Seagulls can be incredibly noisy, while rodents seek a warm and dry shelter. Additionally, the added humidity can weaken wooden structures inviting ants, termites, and roaches. To help prevent pest problems during the winter season, landlords should focus on maintaining proper cleanliness and sealing any exposed entry points. Consider hiring a professional to inspect and identify potential gaps, cracks, and openings where pests may gain entry to the rental property. Also, be sure to keep trash bins closed and far enough away from the rental to keep hungry pests away from the home. Increased Utility Usage The winter months bring with an increased use of heaters and other appliances. This can strain older systems causing them to work less efficiently which can elevate the rental’s energy bill and lower your tenant’s satisfaction. This can be tricky to resolve as other than preventative maintenance when systems begin to fail a replacement is required. However, when the system inevitably fails, you should not only replace the unit or system, you should upgrade the system to an energy-efficient system. This can not only ensure reliable performance but it can also lower the overall utility costs for you and your tenant. Proactive improvements help to maintain tenant comfort while also keeping your property competitive in the rental market. Winter presents unique challenges for beach properties, though with proper care, landlords can maintain their investment while keeping tenants happy. Which can ultimately improve your bottom line. If you need to address unique winter challenges or if you need help managing Beach City rental property, we invite you to call us today at (562) 888-0247 or complete our Owner Application online .
Show More
Share by: