Maximize Rental Income with Padsplit: Rent by the Room Strategy

welcome back to the show I'm happy you're here again episode 257 that's a long time that's over 5 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 pads split so

you may have heard this out there but pad split is essentially a way for you to split your pad 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 pad split 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 uh 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 into the actual details though I want to preface this podcast just with a quick note on the economy right uh 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 uh 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 shortterm 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 why I think this is probably going to become more more popular uh 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 8 months and so their platform

is designed to connect you as a landlord or you as 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 the more urban type

of property you have the denser where housing costs are higher uh those could be good options for this type of model so 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 occupance is only going down to 50% so if you have a property that does well under this model it's really rarely ever going to be earning 0 so that's one nice benefit to this model it's sort of like owning a multifam apartment building as well right if you have 10 apartments and one moves out you know 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 the tenants so they have a communication platform and they help on that in 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 walk through 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 going to help our guests make a decision especially those properties where someone wants to rent it

for a longer period of time maybe 1 month two months and we get this question all the time uh can I come visit your property and a lot of times we have guests in the property right so we're not going to 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 going to do the same thing that person's going to feel much

more comfortable before they decide to book your property for 3 months or however long it happens to be so there's some obvious benefits to this model it's definitely growing and popularity but it is a different sort of management style right uh 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

rening 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 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 your task load as well so I know this is working for a lot of people out there uh 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 strr riches.com my team and I have also managed

over 40,000 guest 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 uh but definitely if you're in a college town if you are in a into 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 uh it's really easy to get started from what I can tell I am not sponsored by

pad split 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 takeaways um if you're going to be there I'd love to catch up you can contact us again at strr riches.com and I'd love love to catch up so to get started it's 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 certain types of regulations and things that your property is going to have to meet you can use their vendor 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 you know 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 uh and again I just love the innovation in the industry there's there's new ways to rent out our property that didn't exist or at least didn't exist in a very easy way uh 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 I just want to make you all aware I hope you have a wonderful week and I'll see you back here next week want to get on the fast fast track

to Financial Freedom through short-term rentals well it all starts with the properties you acquire but you want to make sure that you acquire the right properties I want to give you my ebook that will show you how to do just that there is no charge it's my gift to you for being one of our subscribers