With the housing boom right now, there are so many houses that are being purchased just to turn around in 6 months for a tidy profit. If you have one of those houses, why not get some ongoing revenue out of it without having to deal with tennants in the interim months that you’re waiting to sell? Heck, if it’s profitable enough, just keep the house and continue to rent it as a hotel.
With the ability to advertise to a specific audience for pennies, now-a-days (Google Adwords), it would be quite easy (and inexpensive) to advertise your 2 or 3 bedroom house as a nightly rental, essentially. Especially if it’s near the airport or a major freeway.
Take my situation. Our house is about 2.5 minutes off of I-5, just south of Portland OR. According to the overture keyword suggestion tool, there are about 250 searches a month for “wilsonville hotel”. If I can advertise my house for nightly rental at $80 a night, and I can rent it for say 30 nights a month, that’s $2400 a month in revenue. I have a nice house so I could probably get even $100 for it a night (keeping the price low so that it definitely fills up every night.)
If my mortgage is $1100 a month, that’s quite a profit. Even taking into consideration daily maid service… etc.
And I wouldn’t have to deal with the headaches involved with renting a house out to a traditional renter.
Heck, you could make quite a living from this. Just buy up houses near major freeways, buy ads on Google’s Adwords (or Yahoo… wherever) and sit back and watch the incredible revenue stream.
Of course, this would take some work managing it all, but it would be well worth it to get double your money on your property each month while increasing your equity at the same time.
Add in the use of a car, if you have a house near the airport. This would increase the value proposition even more. You could have a nice $20,000 car parked in the driveway to be used by your guests. So, you could charge maybe $150 a day and pay off the car with the extra cash.
This is done all the time through exchanges. My mother-in-law has done house exchanges with people from other countries where she flies there and stays in their house and uses their car and they fly to her house and uses her house and car. Yes, you’d have to make sure your guests are trustworthy and if you’re dealing with just one every two or three nights, that’s easier than hotels dealing with 50 a night… etc. So, there’s some liability issues, obviously, but I’m sure the overall profitibility far outweighs the liability exposure.
This gives people a totally new perspective on real estate speculation I would think. You couldn’t do this even 5 years ago because the common person didn’t have access to a pool of ready and willing buyers. But now that anyone can place an ad through Google’s Adwords program, anyone has instantaneous access to potential overnight guests.
I love technology!