If you’ve thought about short-term rentals or even if you’ve been renting out a property to short-term and vacation guests, we understand the draw. There’s a promise of high nightly rates and more flexibility with the property you own and possibly use yourself.
We prefer long-term lease agreements, however, and there are many reasons for this. The laws regulating short-term rentals are extremely detailed. There are taxes to pay and so many hoops to jump through, that it’s hard to imagine the money you’ll earn on this sort of endeavor is worth it.
Typically, short-term rental property owners will come to us looking for help. We’ll show them the best reasons to convert that short-term property into a long-term rental. If you’re willing to hold your investment for a few years, you’ll find there’s a lot more money to be made, and much more stability to be achieved.
Here’s how you can transition with ease when you want to turn your short-term Riverside County rental into a long-term property for tenants with a lease agreement of a year or more.
Get to Know the Riverside County Rental Market
With a short-term rental, you’ve likely been renting to people from all over the country – all over the world, even. That’s a different demographic than the tenant pool you’ll find in Riverside County once you decide to rent the property out for the long term.
That means you need to do a little market research. Get to know the types of properties that are presently being rented. You’ll want to know how much they’re renting for, how long they’re vacant before a tenant is placed, and what kind of properties are most in demand. Do those homes offer in-unit laundry? Is there an outdoor space? How does your rental home compare?
This type of comparative market analysis will give you a good idea of your starting point, and where you’ll find most of your challenges and opportunities.
Remove All the Furniture and Review Property Condition
All short-term and vacation rental properties are furnished, and you’ll likely have some beds, plates, small appliances, linens, and other furnishings to contend with. Before you can put your rental home on the long term market, you’ll need to remove all furniture and personal possessions. It’s a good time to sell them, donate them to charity, use them in your own home, or put them in storage for another purpose later.
Long term tenants are going to have their own furniture, and they’ll want to move those things into the property that they’re living in for a year or longer. While you’re removing everything, make sure you check for any minor maintenance issues, fix anything that needs to be fixed, and provide a good, thorough cleaning to the property.
This is a good opportunity to make some small improvements and upgrades, too. If you’ve been successful keeping your property occupied in the short-term, your rental home is likely well-maintained. Before you look for long-term tenants, consider a fresh coat of paint.
Establish a Rental Price
Next, you’ll need to settle on a rental value, and this may look a little different than it did when you were renting out a short-term rental home by the night or by the week.
Long term rental properties take in less money on a per-night basis, but that doesn’t mean you’re making less money on a long-term rental. Remember that you don’t have to worry about the vacancy and turnover risk. You won’t be looking for new tenants every week or every month. There’s more stability, and while that means less money per-night, it means more money on average per year or over the life of your investment property.
Again, you’ll have to spend some time researching the market. Take a look at what homes similar to yours are renting for in the area. If you’re not sure where to find the right numbers, get in touch with a property manager in Riverside County. We have some great reliable data that can help you establish a profitable and competitive rental value.
Don’t risk overpricing your property. That’s only going to create a longer vacancy period, which will delay your income and hurt your ROI. Forget what you were earning when you rented your home by the night or by the week. This pricing structure is much different.
Learn Your Landlord and Tenant Laws
Renting out a long term property requires you to understand the fair housing laws and other state, local, and federal rules. California is well-known for its tenant protections. You’ll need to understand rent control and whether it impacts you. Just cause eviction laws are on the books, and there are considerations to be made around Section 8 tenants and security deposits.
You don’t have to allow pets, but you do have to allow service animals, for example. There are specific things you can and cannot do when you’re marketing your property and screening your tenants. The home will have to meet habitability standards, and there are timelines and other limits involved in security deposits.
Don’t set yourself up for an expensive legal mistake. Get to know the laws or talk to a property manager who can ensure you remain in compliance.
Find a Long Term Tenant
Once your property is ready for the rental market, you’ll need to do some advertising and marketing.
Similar to vacation rentals, you’ll get most of your traffic through online rental sites. Instead of vacation sites, however, you’ll want to focus on pages like Zillow, Trulia, Zumper, HotPads, RentCafe, and others. The way you advertise is also different. Renters will be less interested in vacation amenities and more interested in school districts. Highlight the features of your property thinking about what tenants are looking for. They’ll appreciate fenced yards, for example, and updated kitchens.
Be strategic with marketing and use social media to get as much attention for your property as possible.
Invest in Professional Property Management
The best way to effectively and efficiently convert your rental property from a short-term rental to a long-term rental is by working with a Riverside County property management company. We can help you avoid expensive mistakes that many landlords make, and we can introduce you to the tools and resources that will help you succeed.
Contact us at Diamond Property Management.
