Airbnb Investment Property Purchase Strategy

Can you guarantee that my property is legal in Las Vegas?

No. Every city has a different procedures. As of 3/29/22, there are little or no licensible properties for sale. However, in July 2022, Clark county will issue procedures for getting licensed. Only 3,000 of the 12,000 or so unlicensed short term rentals will succeed in receiving a license.

Are you saying that all those thousands of Airbnbs that I see advertised are operating illegally?

Yes. 95% of those Airbnbs you see on the web are unlicensed. Owners could be fined and the properties shut down for code violations. The meager 2% who are operating legally must get a special use permit no later than July 2019. Of the 8,000 or so properties, only about 150 are properly licensed. Since no one has that special use permit, it’s completely unknown as to how difficult it is or how long it takes. The City of Las Vegas could conceivably make that process so difficult as to shut down all Airbnbs.

What happens if I buy an Airbnb and simply take the chance that they don’t catch me?

We don’t know. We have no insight as to how Clark County, North Las Vegas, Henderson or the other tiny little cities like Paradise are going to deal with all these illegal Airbnbs. Our best guess is that they will focus on the properties that get their attention. Party houses or short term rentals that create a nuisance to neighbors will probably get their attention first. Like traffic cops, they can’t physically stop everyone so they will probably spank the worst offenders and let the others go.

How can they catch me?

Your neighbor will snitch on you. If you buy a massive 5 bedroom house with a pool in an upscale neighborhood, your neighbor who drives a Lamborghini is going to be pissed off when he finds condoms in his front yard after 30 people threw a party at your Airbnb. These “High Profile” houses are going to be the first on the list of code enforcement efforts. If you get a modest home in a blue collar neighborhood and offer a case of beer to Johnny Lunch Bucket next door, you will probably get away with an Airbnb for a very long time.

What happens if or when they catch me?

You will get a love letter from code enforcement. Our expertise is in dealing with code enforcement issues. The love letter essentially states that you have x number of days to remedy the problem or they will fine you. Every love letter we receive had about a 30 day remedy and occasionally we had to ask for an extension. We’ve never been denied an extension and the code enforcement officers we deal with are super cool. All of them know us, and we know them all. They love that we take care of code enforcement issues promptly. NOTE: The City of Las Vegas has like 3 code enforcement officers. Their hair is on fire. It’s likely they will only deal with the Airbnbs that get a lot of attention from neighbors.

Should I purchase a property for an Airbnb in an HOA?

No!!! HOAs are really against short term rentals for fear of party houses. Condos are more likely to get hit by HOA violations. All it takes is a pissed off neighbor to turn you into the HOA police. If you cannot prove to the HOA that you have a tenant with a 30 day lease or more, they can fine you until you give up or they take your property. HOAs have sharper teeth than the government and they can legally eat your property.

Do all HOAs have 30 day minimum lease requirements?

Yes. All HOAs we know about have a minimum rental restriction.

Are there many properties available to purchase and license near The Strip?

No. What what what? That’s right. The Strip is technically in the city of Paradise. Pay close attention to the diagram above. The Strip is below the Township of Las Vegas. That little bitty section above The Strip is all that is near The Strip. It is in a rough neighborhood AND thousands of investors are fighting over what’s available. Welcome to fight club.

What can I do if I start up an Airbnb but the government or an HOA sends me a love letter to stop?

You can convert the property to a regular rental or make your minimum stays 30 days. All the cities and nearly all the HOAs allow rentals for 30 days or longer. Advertise on short term rental sites, but just set the minimum stay for 30 days. An alternative is to convert it to a regular rental. It would not be the end of the world.

What is the best type of property to purchase for an Airbnb?

3/2/2s in a “C” neighborhood without a pool and not in an HOA. What the heck does that mean? That means a 3 bed, 2 bath, 2 car garage in an average neighborhood ranging in price of about $180k that doesn’t have a pool and doesn’t reside in an HOA. In our experience, properties that don’t fit that profile make a less return on cash. For example, a property that’s in an awesome neighborhood that costs $360k with a pool, will make about 50% more than a $180k property. You would make more money with 2 $180k properties than you would with one $360k property. By the way, you are also more likely to get caught with one big expensive property in a “A” neighborhood than you will with 2 properties in a “C” neighborhood.

My mom always told me “location location location.” Properties in “A” neighborhoods appreciate more than “C” neighborhoods right?

Wrong. That phrase is big bunch of hoooey. There is no correlation between appreciation rates and neighborhood quality. For example: properties in 89144 (one of the most desirable neighborhoods in Las Vegas) depreciated 11% over the last year because of all those buyers were obsessed with “location.” ZILLOW REFERENCE. You are reading this page because you want to make money. Not to impress your friends.

Now that I know that I may not get a license, what happens after I purchase the property?

You need to rehab and refurnish the property. You can do it or we can take care of that for you. We are a menu driven business. You can pick and choose what you want us to do. Generally we charge 10% over invoice for rehabs and we charge $1000 to furnish the unit. This page covers a basic 3/2/2. This Airbnb cost about $8k to furnish. We created the page with love, care and stuff we found on Craigslist.

What if I don’t like your taste in furniture or finishes?

You can get someone else or do it yourself. We only offer that to help our investors. Furnishings are not our core business and we have never been featured on Architectural Digest. Go ahead, roll up your sleeves and drive all over town in this heat picking up couches and lamps.

Once I furnish the Airbnb and it’s ready to go, how do I manage it?

We assist you in setting up the property in your name. Here is our Start Page. That shows you how we crank up your short term rental. You will become the “co-host” which gives us control over bookings and discussions with the guests. As “co-host”, you get to see all the dialogue between us and your guests.

How much do you charge?

$1000 to set up and 10% of the gross AFTER Airbnb pays us. What is confusing is the term “Co-Host”. Most people who over “Co-Hosting” are not licensed property managers and they charge anywhere from 10%-15%. Airbnb does the process of splitting out that money. Our process is different. We do the splitting. First, we collect all your money and then give you 92%. Because we do all your cleaning and repairs, we have to operate this way.

How and when do you pay me?

On or about the 25th of the month, we will send money to you electronically. We take all the income and subtract all the expenses to determine how much money to send you. Then we send that money to you electronically. Your owner portal also enables you to see vendor invoices so you can dig deep into anything you want.

Do you take care of all the cleaning, check ins and check outs?

Yes. Cleaning fees will vary depending on the size and complexity of your lodging. A 3 bed, 2 bath house about 1400 square feet runs about $230. That includes cleaning and linens. This number will change as we dial in your property. Little piggies who leave your place a mess may cost more.

How good are you?

We rock. Our first property is now a SuperHost and our goal is for your property to become Superhost qualified within 2 months.

What else should I know about your property management?

Jim Eagan, president of Limestone Investments, wrote a book on the subject (A Fistful of Properties). We have 7 property managers and a team of maintenance & accounting folks that take care of over 350 properties.  Grab another cup of coffee and dig deeper…

• Property management FAQs.
• Maintenance and how it works.
• Investor purchase process:  start here if you want to make money.
• Yelp Reviews

Do you have any tips for preparation?

About half way down this page is some good tips in preparing your short term rental. We will be giving you similar advice.