How to turn a short-term rental property into a long-term rental
Follow these tips to ensure that you’re ready to take on this unique type of landlord-tenant relationship
While the long-term rental market in Denver is currently booming, the short-term rental market, which consists of rentals that last fewer than 30 days, is a different story. For one, the COVID-19 pandemic has lowered travel numbers substantially. For another, because of their high turnover rate, short-term rentals are often harder to care for, which has led many landlords to choose a long-term strategy instead.
With that in mind, here are tips on how to turn a short-term rental property into a long-term rental. Read over these tips to learn how to get your rental property set up for tenants with a lease who plan to stay for at least a few months at a time.
Update the property for long-term residents
Before you do anything else, it’s important to get the unit ready for long-term tenants. In some respects, this process won’t be much different than if you were turning the unit over for short-term tenants. For example, you’ll still want to clean the unit thoroughly. However, you may want to take extra steps to freshen it up such as repainting the walls or putting in upgraded appliances.
Additionally, long-term tenants also have different needs that you’ll need to cater to as well. Although your short-term rental likely came furnished, a long-term tenant will be much more likely to want to bring in their own furniture. To that end, if your unit is currently furnished, you’re going to want to make arrangements to sell the furniture or store it elsewhere.
Learn local landlord-tenant laws
Next, you’re going to have to take the time to learn local landlord-tenant laws. Often, these laws are applicable on a state or local level. For instance, in Colorado, a security deposit must be returned within 30 days if another amount of time is not specified in the lease. However, even if another amount of time is specified, it cannot exceed 60 days.
Luckily, the state government has provided a handy guide to help you familiarize yourself with your rights and responsibilities. In addition, the American Apartment Owners Association is also a good resource to turn to on this topic. Beyond doing your own research, however, you may also want to work with a real estate attorney to make sure you understand all of your obligations.
Advertise the unit properly
After your rental unit is ready and you’ve familiarized yourself with your obligations, the next step is to figure out how to advertise a long-term rental. When you were renting to short-term tenants, you likely used websites such as VRBO or Airbnb in order to secure your rentals. However, long-term rentals use different platforms.
In this case, you should investigate websites such as Zillow, which can help you secure a tenant who’s looking to stay in the unit for the foreseeable future. For a small fee, you can also use Zillow’s rental manager feature, which allows you to do tenant background checks, sign leases, and collect payments.
Alternatively, if you’re short on cash, you can look into using Craigslist, which will allow you to post your rental listing for free.
Find the right tenant
After that, it’s all about screening tenants. Because long-term tenants are going to be living in your rental unit for a considerable amount of time, you’ll want to spend some extra time making sure they are the right fit for your property. Typically, this process involves doing a background check, credit check, and verification of employment. You likely need to invest in some type of property management software for these tasks to keep organized.
Once you have a short list of candidates, you’re also going to want to talk to each of them to see which one is the best fit for your unit. Ultimately, as long as the financials make sense and you stay compliant with fair housing laws, picking the tenant who’s the best fit for your unit is a matter of personal preference.
Rewrite the lease
Finally, you’re going to want to take the time to rewrite your lease agreement to fit a long-term rental situation. In particular, you’ll want to specify how long the lease term lasts, how much rent is and when it is due, the responsibilities of the landlord and tenant, and any specific activities that might be prohibited under the lease.
The bottom line
When you’re implementing a buy-and-hold investment strategy, it’s important to decide whether you intend to go after short-term or long-term rentals. Put simply, both of these rental types have different expectations that need to be met. However, it’s OK to change your mind and to switch your property from a short-term to a long-term rental. Follow the tips above to ensure that you’re ready to take on this unique type of landlord-tenant relationship.