Airbnb – Short Term Rentals

Airbnb is one of the fastest growing components of the hospitality industry. We are offering Airbnb as a solution for may of our investors. Let’s cover some of the ground rules and requirements to participate in our Airbnb program.

There are some downsides that you need to be aware of before you jump into Airbnb:

  • You probably don’t fall into the Township of Las Vegas. It’s a very small area North of Sahara shown in the diagram below. If you want to do short term rentals, you will have to operate illegally until you are licensed or the townships in Clark County change their laws.
  • The Township of Las Vegas passed a bill in June 2017 that requires all short term rentals obtain a “Special Use” permit. No one knows how difficult or how long that process will take. Click here to see the bill and sections that we have highlighted.
  • We cannot prevent some random visitor from causing extensive harm to your property or furnishings. Even though there are some precautions provided by Airbnb, you could get a visitor who doesn’t respect property. Airbnb offers insurance to damages and we have had a great experience getting compensated by them. Occupancy varies tremendously depending on the season and the price. Just like normal rentals, if you want a ridiculous price for your property, we won’t be able to meet your expectations.
  • It will take some time to “dial in” your property in terms of price and processes. Every property has kinks and it will take time to determine the optimal price for your property. We are getting more data daily.

Legally qualified Airbnbs must meet 3 Location Requirements.

1 – Township Of Las Vegas – Must be in the townships of North Las Vegas, Henderson or Las Vegas. There is a large section of Las Vegas that is actually Clark County and not in the township of Las Vegas. Homes in an unincorporated area are being searched by the Casino Mafia. They are actively looking for Airbnb operations and working with the government to shut them down. They don’t want you messing with their casinos.

2 – Not in an HOA – 95% of the HOAs out there have a rule that prevents stays for less than 30 days. Some HOAs are more stringent than others. It’s a good idea to check the rules before you spend a bunch of money doing this.

3 – Away from other Airbnbs – You have to be 660 feet away from another Airbnb. That’s pretty easy to find by searching Airbnbs on the map.

We can still manage your illegal Airbnb but we are not liable if you are shut down by an HOA or the local government. If for any reason, some government entity or local association prevents you from operating and Airbnb location, we will not be held accountable. 

The property needs 4 conditions met before we start advertising:

  1. The property must have smoke detectors.
  2. The property must have at least 2 fire extinguishers.
  3. Limestone Investments must be “additionally insured” by your insurance company (this doesn’t cost you anything).
  4. The property must be properly furnished. This spreadsheet has basic requirements. The more features, the more money. If you want to furnish your own property, go for it. We charge $1000 set up the basic furnishings and will provide you an estimate up front. There is a lot to furnishing a property.

We charge 8% of the gross amount collected AND $500 to start up.

  1. All these fees need to be paid up front:
    1. Start up fee $500.
    2. Furnishing fee will be $2000. The cost to modestly furnish a 3 bed 2 bath is about $10k.
  2. We will get photos & video of the property.
  3. The Airbnb add will be created and you will have an opportunity to approve the add. You will be the co-host and we will be the host.
  4. We will settle your account near the end of each month. That settlement statement will include a report that has your income and expenses.

Can you help me purchase a property for an Airbnb?

Info 100Yes. We specialize in identifying excellent investment properties.  Investors who want to be on top of their game START HERE. That page leads to further links that help even the most seasoned investors get the right property.


Info 100Can you guarantee that my property will be legal in Las Vegas?

No. We cannot guarantee that your property will be properly licensed. In July 2017, the City of Las Vegas has allowed licensing only with a Special Use permit. Properties that have been operating with a license will be required to have this special use permit by July 2019. All properties outside of the township of Las Vegas are currently operating illegally.


Info 100Where can an Airbnb potentially be licensed with a special use permit?

The pink area of this diagram. You will notice that very little of the metropolitan area of Las Vegas is actually in the township of Las Vegas.

W-city_boundries_map.gif

Info 100Are 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 not licensed and could be fined or shut down for code violations. The meager 2% who are operating legally are now required to 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.


Info 100What would happen if I buy an Airbnb and simply take my chances of not getting caught?

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.


Info 100How can I get caught?

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 Lunchbucket next door, you will probably get away with an Airbnb for a very long time.


Info 100What happens if or when I get caught?

You will get a love letter from code enforcement. We deal with code enforcement all the time. The love letter essentially states that you have x number of days to remedy the problem or you will get fined. Every love letter we have received had about a 30 day remedy and occasionally we had to ask for an extension. We were never denied an extension and the code enforcement officers we deal with are super cool. We know all of them and they all know us. We take care of code enforcement issues promptly and they love us for that. NOTE: The City of Las Vegas has like 3 code enforcement officers. Their hair is on fire. We think they will only deal with the Airbnbs that are getting a lot of attention from neighbors.


Info 100Should I purchase a property for an Airbnb that is 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 of 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.


Info 100Do all HOAs have 30 day minimum lease requirements?

Yes. We have not found an HOA yet that does not have a minimum rental restriction.


Info 100Are their many properties available that can be licensed 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. That little section is in a rough neighborhood AND thousands of investors are fighting over what’s available. Welcome to fight club.


Info 100What’s the purpose of having an Airbnb if I can’t have it by the strip?

You will still make more money than a regular rental. Preliminary numbers indicate that you will make about twice as much as a regular rental. We have a property in North Las Vegas (about 12 miles from the Strip) that generates twice the amount it used to rent for. Folks who have been staying there are not interested in gambling or partying like rock stars.  


Info 100What 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. You could still advertise on all the short term rental sites and 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.


Info 100What 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. We have found that properties that doesn’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.


Info 100My 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.


Info 100Now that I have been warned that I may not be able to get a license, what happens after the property has been purchased?

You need to get it rehabbed and furnished. We can take care of that for you OR you can do it. 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 $2000 to furnish the unit. This page covers a basic 3/2/2. This Airbnb cost about $10k to furnish. It was done with love, care and stuff we found on Craigslist. One thing we have discovered is that it is not practical to have 2 cooks in that kitchen. You either furnish it or we furnish it. We are not going to both work on furnishing it.


Info 100What 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. We honestly don’t care if you roll up your sleeves and drive all over town in this heat picking up couches and lamps. If you want to see an example of our work, the video below will show you what we put together with used furniture from craigslist and yard sales for about $10k.


Info 100Now that it’s furnished and ready to go, how is the Airbnb managed?

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. You will get to see all the dialogue between us and your guests.


Info 100How much do you charge?

$500 to set up and 8% 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. We collect all your money and then give you 92%. We have to do it this way because we are doing all your cleaning and repairs.


Info 100How and when do I get paid?

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. 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. Here is a video of how it works and what it looks like.


Info 100Do 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. That number will change as we dial in your property. Little piggies who leave your place a mess may cost more.


Info 100How good are you?

We rock.  Technically we are a SuperHost which means that when you are posted on Airbnb, your property falls in that category. Some travelers only book SuperHost properties because they don’t want to deal with amateurs.


Info 100What 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 400 doors.  Grab another cup of coffee and dig deeper…