Some of you may know this already, but for those of you who do not, I have quite a few rental properties in “Sin City” Las Vegas. I grew up there, and I still have lots of friends and family who live there. One of the perks of investing in Vegas for me is the ability to write off some of my travel costs when I go back to Vegas as part of my investment expenses against my rental income.
My Vegas rentals have performed well for me in the past, and odds are that I will continue to invest in that market. Why, you may ask? Well, for me personally, the answers are simple:
I know the area well. The returns meet my investment criteria. I have a team in place there to assist me. I get to write off my Vegas trips when I go back to visit my mom!
Now, I know some of you may completely disagree with me. In fact, I was speaking with Jeff Brown just recently when he told me that he thinks Vegas is a terrible place to invest. Whether you feel Vegas is a good market or not, one undeniable thing about Vegas is that it is a major travel destination. Even though all of my properties there are the traditional bread and butter 3-bedroom, 2-bath long term rentals, I did recently become aware that there are better ways to rent out my Vegas properties.
Using Vacation Rental Sites
I was speaking with a client of mine, Ron, last week who also happens to own a few properties in Las Vegas. Ron’s property was built in the early ‘80s and in Vegas standards, it is often considered an “old” property. In the past, Ron told me about some of the hurdles he had in terms of vacancies and low rents for this particular property. This is why I was so surprised when Ron called to tell me that he needed to come in to get some tax strategies in place in order to protect himself from taxes on the income his Vegas property was generating.
What I learned from Ron that day during our meeting was that he made a shift in how he was renting out his Vegas rental this year, and this change will likely double or even triple his income. What was the change? He turned his property from a regular rental into a short-term rental on Airbnb. For those of you who are not familiar with Airbnb, it is an online service that helps you market a property for short term rentals similar to a hotel. Rental days may be a long as several months or as short as one day.
For Ron, who had traditionally rented out his property to long-term tenants, the change in marketing as a short-term rental has paid off significantly so far. When I spoke with Ron in June, he informed me that the money he made so far this year already surpassed the rents that he earned in all of last year. What a great way to put a property into its best and highest use, right?
Just then, I started to realize that Ron was not alone. In the last year or two, I have had dozens of clients turn their traditional rentals into these short-term rentals. In fact, I have a handful of clients who rent out rooms in their primary homes on a short-term basis using online sites like Airbnb. As with anything, there are pros and cons to this, of course.
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