One of the things I love about this industry is that it’s just changing so quickly.

Short Term Rentals were really not that popular just a decade ago, right?

But now we have all these listing platforms, we have all these management companies, we have all this different software that can help us manage and facilitate the operations and to create the best guest experience, and these options just keep coming.

And this week, I’ve got another one for you, and this is going to be especially helpful if you happen to be in a market where maybe the regulations got a little more strict lately, maybe they prohibited you from even renting your property.

This is going to be a good option, so stay tuned.

I can’t believe it.

It’s episode 257.

Let’s jump right into it.

Welcome to Short Term Rental Riches.

We’ll discuss investing in real estate, but with a specific focus on short term rentals.

Quick, actionable items to acquire, manage, and scale your portfolio.

I’m your host, Tim Hubbard.

Welcome back to the show, I’m happier here again.

Episode 257, that’s a long time, that’s over five years in the short term rental industry, just doing this podcast.

But I started long before that.

It’s been a 10 year journey now, and these new programs and new options to help us with our short term rentals, or to help us earn more money with our properties, these options just keep on coming.

And so today I’ve got another one for you.

I’ll just jump into it, it’s called Padsplit.

So you may have heard this out there, but Padsplit is essentially a way for you to split your Pads.

So instead of renting your Airbnb as a whole property, obviously Airbnb has this option as well to rent by the room.

This is all that Padsplit does, and there’s some really good benefits to it.

It may help you increase the revenue on your property, but also not have a crazy amount of work to do.

So I want to jump through just what it is, why I think it’s going to work for quite a lot of your properties and your markets, I should say.

Just some of the basic features, and then how you get started.

So just a real quick recap on Padsplit.

Before we dive in the actual details though, I want to preface this podcast just with a quick note on the economy, right?

And referring to the US economy, our middle class is getting squeezed, right?

Inflation has taken a huge toll.

Groceries are higher than they’ve ever been.

Rents are higher than they’ve ever been.

Property prices are higher than they’ve ever been.

And unfortunately, a lot of people cannot buy their own homes.

Interest rates are really high, although they have come down a little bit.

Hopefully that trend continues.

But the reality is that people are having to find cheaper options for their housing.

And one way people can easily do that is by rooming up with someone else, by having a roommate, by moving back in with the family.

And so I think Padsplit, which is designed to facilitate this, it’s designed to help us with our rental properties, earn more money on our end as a landlord, but also help the tenant pay a lower amount per month because they’re sharing the space.

So this isn’t going to work for all of you and all of your investment properties out there, but maybe you have a property where you’re thinking, you know what, I can’t rent short term in this market, but my long term rents aren’t that great, or I think I could double my long term rates if I just rented by the room.

This is pretty common in college areas, for example.

Okay, so that’s my just quick recap on the market and why I think this is probably going to become more and more popular over the next few years.

Let’s jump into the details.

So Padsplit is an option for you to rent out by the room, but not by the night.

Their minimum required stay is 12 weeks, but their average length of stay is actually eight months.

And so their platform is designed to connect you as a landlord or you as an owner to these types of tenants or these types of guests, I guess you could say, looking to rent for a shorter period of time.

A couple of the features here.

So you as a landlord, you’re going to get paid weekly, and Padsplit facilitates all the payments for you, just like Airbnb does.

If you have a property that’s well suited for this type of option, again, college towns or really the more urban type of property you have, the denser where housing costs are higher, those could be good options for this type of model.

So the other benefit may be that your overall vacancy is just higher.

So we’ve got to think when we have a single family home and someone moves out of it, our vacancy becomes 100%, right?

When they move back in, then the occupancy is 100%.

When you have a split sort of model like this, let’s say you have four bedrooms and two people move out, well, your occupancy is only going down to 50%.

So if you have a property that does well under this model, it’s really rarely ever gonna be earning $0.

So that’s one nice benefit to this model.

It’s sort of like owning a multi-family apartment building as well, right?

If you have 10 apartments and one moves out, you’re not at 100% vacancy.

So another thing that they do is they do background checks on all of the tenants that will rent at your property.

They provide support with the tenants.

So they have a communication platform and they help on that end.

They create 3D tours of your property.

So there’s no preview of the property.

Someone can’t show up and kind of do the walkthrough, but they create a 3D tour.

And for those of you out there with short term rentals, you really need this for your short term rental as well.

We know that this is gonna help our guests make a decision, especially those properties where someone wants to rent it for a longer period of time, maybe one month, two months.

We get this question all the time.

Can I come visit your property?

And a lot of times we have guests in the property, right?

So we’re not gonna ask our current guests to entertain someone coming in to rent the space.

It’s just not a good situation.

So we don’t do this either, but having a 3D tour of your property is essentially gonna do the same thing.

That person’s gonna feel much more comfortable before they decide to book your property for three months or however long it happens to be.

So there’s some obvious benefits to this model.

It’s definitely growing in popularity, but it is a different sort of management style, right?

There could be issues between your tenants at the same property.

Of course, if you’re making twice as much money from this property, then you can figure out those sort of management challenges, right?

And they’ve actually created a whole vendor network of people that are familiar running out on pad space to plug you into.

So if you don’t want to handle any of that part, they do have a network where you can find other professionals in the industry, in your market.

They’re all over the place now, and so you can sort of alleviate that task from your task load as well.

So I know this is working for a lot of people out there.

If we come back just to the setup of our property, we know that as a short term rental, sometimes it doesn’t make that much sense to invest the money to add a third or fourth bedroom to our home, right?

We really need to look into the market fundamentals and see how much the three bedrooms are running for versus the four bedrooms.

And we’ve talked about how we can do that in the past.

If you’re new to the show, by the way, thank you for joining.

You can catch all of our prior episodes at strriches.com.

My team and I have also managed over 40,000 guests with my own portfolio that’s spread across the US and also outside of the US.

So again, this isn’t going to work for all of you out there.

But definitely if you’re in a college town, if you are in a dense urban area, especially one that has really high housing costs and maybe also has really strict short term rental regulations, this could be a good option for you.

It’s really easy to get started from what I can tell.

I am not sponsored by Padsplit.

I just came across them and I see them at all the industry conferences I go to, which I am going to the industry’s largest conference next week.

That’s the VRMA in Phoenix.

And so I will report back to all of you the following week with my biggest take aways.

If you’re going to be there, I’d love to catch up.

You can contact us again at strriches.com and I’d love to catch up.

So to get started, it’s really easy.

It’s really similar to Airbnb, right?

So they have a host side and they have a guest side.

So you just sign up as a host.

They have some verification that you need to go through.

They do have some compliance that your property is going to have to meet some certain types of regulations and things that your property is going to have to meet.

You can use their inventor network to find someone to help you with the property, but that’s really it.

Afterwards, they’re going to market on a whole bunch of different listing platforms for longer term tenants.

So, Facebook, a lot of the traditional long term rental platforms, they’re really sort of taking the place of like Craigslist, for example, that was really hard to trust what comes through there.

And again, I just love the innovation in the industry.

There’s new ways to rent out our property that didn’t exist, or at least didn’t exist in a very easy way just in the recent past.

And there’s new tools all the time.

So, this may work for you.

Just wanted to bring it to your attention.

And if you are in one of those areas, unfortunately, where the regulations got really strict, well, you might want to consider this.

So until next time, check out Padsplit.

If you think this might be interesting to you.

Again, I’m not sponsored by them.

Just want to make you all aware.

I hope you have a wonderful week and I’ll see you back here next week.

Whether you’re just getting started or you have dozens of properties, one thing remains the same.

Poor management can crush your investment returns.

Our team has learned a lot managing over 40,000 guests and we’ve compiled our biggest takeaways into a handy guidebook to help you better manage your property.

Equipped with checklists for guest verification to pricing strategies, it breaks down our whole process from start to finish.

Best of all, it’s free for you for being one of our loyal subscribers.

You can get your copy by going to strriches.com.

That’s strriches.com and I hope it helps you earn higher returns with less headache.