Buying Condo for Short Term Rentals

sounds like a nightmare (too many hassles)

Terrible idea!!! Do you or your parents want to take the downside investment risk? Do you or your parents want to be in the hotel or apartment rental/cleaning business? Many threads on this board have proven that in today's market you can rent for about 50% less than you can buy.

Cheaper for your parents to sublet, stay in hotels or find weekend rentals on VRBO or Craig's List.

Gotta agree with qwerty and Dreamer. Owning a vacation rental is real work, and can be a true pain in the ass. If your parents live only 2 hours away, it seems silly to go to the trouble and expense of buying a pied-a-terre/rental property rather than simply booking a hotel room for a few nights when they want to visit.

My answer would very likely be different if not for the need to rent - if your parents could comfortably afford a small NYC apartment without having to go the short-term sublet route that would be a different thing altogether and might be very worthwhile.

But honestly - do they really want to have to deal with the constant care and upkeep necessary for a rental property? People can be true pigs, especially in rentals. They break things, soil things, stink up the place with cigarette smoke. The short-term rental business is not for the faint-of-heart, and not something I'd recommend for folks about to retire.

I don't think it is a terrible idea but it can be a lot of work. One thing I would watch out for is that most respectable condo buildings now require 6 month or more lease terms in an effort to curb the short stay rental riff-raff in the building.

I think a better approach would be to tell your parents to rent an nice studio in their neighborhood of choice for 6-12 months, see if they like it / use it, and make the decision after that.

Thanks for the advice. My brother and I would handle all the management and upkeep. Was thinking it could be a place they would eventually move into full time after a couple years. Hope the market will have picked up by then so they could sell their house in CT and pay off the condo. I'll do some more research but appreciate the words of warning.

Also have to think competition in this area would be fierce, given all the new developments and speculative activity. With that said, I have used VRBO.com on several occasions and the good apartments there seem to be fully rented weeks and months in advance.

terrible idea because the revenue's not sustainable. These short-term rentals are a violation of the City's hotel law--the City turned somewhat of a blind idea during the past, but as we sit in the recession, they'll wake up, look for tax revenue in between the couch cushions, and start enforcing laws like these.

ali r.
{downtown broker}

I wish this discussion board allowed solid caps, so I could write

PARRRRRRRRRRTYYYYYYYYYYYY!!!!!!!!!!!!!!!!!

[trash the place]

Oh, lookee -- it does.

...also bed bugs, lice, cigarette burns on the furniture, insurance (what happens if a renter falls in the shower?)

What an awful idea.

As Front Porch has pointed out, short-term hotel type rentals in residential buildings are against the law. If breaking the law isn't an obstacle for you, there's activity right now now to strengthen enforcement and fines. So you probably should factor that into your financial model. Plus extra tips to the doormen to let the "guests" arrive and also to keep their mouths shut about your violating probably a half-dozen house rules and bylaws of the condominium. And how would anyone know you were running a hotel? All you need is one noisy "guest" to prompt an adjacent apartment resident to make a call to 311. Besides, how would you like to live next door to a rent-by-the-day tenant....

Hi atinyc, my condo allows minimum 30 days leases. It is NOT illegal to rent short term in my building as it is in the bylaws of the condo board AND the Management's policies. So no, it is NOT illegal to rent short term in every condo building in NYC. I have a one bedroom and have done well renting short term. The building is full service and in a great midtown location.

I was interested in doing this too. I wanted to rent shorter term. There are lots of apartments being rented out by the day - Craigslist, vacation rental websites and agencies. I was wondering if anyone knew any buildings that seem to look the other way on this.

atinyc - Both the Trump Soho and Essex House offer your parents a short term solution and would also get them a return on their purchase with complete and total ownership.

Let me know if you have any further questions about the idea of buying condos to let short term.

-Sam 646.331.8534

What kind of return can you guarantee?