If you know you can’t commit to a full year, subletting a room or living in a short-term apartment might be your best option.
Never subleased an apartment before? We’ll break it down for you!
What does it mean to sublet an apartment?
The legal definition of subletting is leasing or renting a part, or all, of your lease or rented property, to another person called a subtenant. Subtenants have responsibilities to both the tenant and the landlord, but the tenant is still responsible for paying rent to the landlord and for any damage done to the property.
In simpler words, a sublet, or sublease, is when the original tenant transfers the lease to a subtenant for the remaining duration of the lease period — typically less than a year.
While it varies case-by-case, it typically involves a lease transfer fee and does not require the full move-in costs that one-year leases usually have. Therefore, subletting a room or apartment is a great option if you value affordability and flexibility.
Who is involved when subleasing?
Landlord: The owner of the townhouse/apartment. They receive rent on a monthly basis from the tenants.
Tenant/Sublessor: The renter who signs the lease must pay monthly rent to become a resident of the apartment. The contract period is usually one year.
Subtenant/Sublessee: The person who may live in said townhouse/apartment and commits to paying the rent for their period of stay. However, they’re not officially on the lease. Their point of contact is the tenant (the person obligated to pay the landlord).
What are the legal and financial responsibilities?
Every lease differs, so you first need to figure out if it’s even allowed. If you’re the tenant, read your contract again to ensure that your landlord allows subletting. If you’re the subtenant, ensure that tenant is following the proper procedure.
Regardless of what the lease outlines, it’s a requirement to talk to your landlord about the fact that you want to sublease. If they allow it, they’ll inform you of the procedure that you must follow — it could involve either a transfer of lease and/or a subletting fee.
Alternatively, the landlord may not permit it at all. Tenants/subtenants must adhere to the decision of the landlord or they hold the right to sue/evict or charge hefty fines to both the tenant and the subtenant from the apartment.
Subleasing often involves a fee for processing the addition of the subtenant on the lease agreement. In case there is a lease transfer, there may be penalty fees for breaking the lease. The landlord may request a security deposit from the subtenant, as well. In certain rare cases, there is no fee.
Read the fine print in your subletting contract: Length of stay, utilities, rent amount, parking fees. These are important factors that all parties must agree on. It’s in all parties’ best interests to sign a sublease contract to make sure you’re protected and have the rules for both parties in writing.
Make sure you know what type of sublet you’re agreeing to
There are two main forms of subletting.
Both the sublessor and sublessee are jointly responsible for the apartment and all associated costs.
The original tenant is fully responsible for the lease and is thus responsible for complying with all rules and regulations. The original tenant is liable for any damages and missed payments on behalf of the sublessee.
Read more on the regulations here.
Benefits of subletting a room or an apartment
A sublet isn’t as much of a commitment. Now more than ever, signing on to a one-year lease is something to think twice about. Sublets are much more lenient, and allow you the flexibility during these unpredictable times.
Another pro is that sublets are much more affordable. People looking to transfer their lease will sometimes negotiate on rent. Even a small amount can certainly add up, making a large difference in your overall cost.
And finally, people seeking subletters typically leave their apartments completely furnished, or offer to sell their furniture at a discount. Not only will this save you money, but it also makes all the difference when you’re trying to move in furniture up a few flights of stairs. Definitely a huge perk of subletting!
Benefits of finding someone to sublet your apartment
You don’t have to break your contract. In most cases, breaking a lease is not an option. If you’re committed to a lease, then finding someone to sublet your apartment means you don’t throw money away. Nobody wants to pay for an apartment they aren’t living in.
Another perk is the ability to leave your apartment for a few months, but still move back in eventually. With subletting, you don’t need to give up your apartment.
And by subletting, you don’t need to urgently leave the apartment and pack up your entire life. We all know how difficult moving is in general, not to mention on short notice.
Drawbacks to subletting a room
While subleasing is a great option for someone looking for short-term housing, there are a few drawbacks to the process.
For the renter, it’s only temporary. If you find a great place to live, you know that you’re going to have to move out eventually. So don’t fall in love with your temporary digs.
For the tenant, there are always risks when having someone come into your place when you’re not there, especially if you have really nice things. Think of it like if you were to Airbnb your apartment, there’s always a chance something could get stolen. Also, if your sublessee bails on you or fails to pay the rent, your landlord will still come after you for that missing payment.
What to keep in mind while searching for sublet?
Make sure a sublet is the best option for your circumstances: Will you live in this apartment for less than a year? Do you want to avoid upfront costs that come with a full-year lease? Do you want flexibility? If you answered yes to these questions, you should definitely consider subleasing an apartment.
Make sure to start early. If you’re seeking a sublet for the spring semester, now’s the perfect time to start. It’s best to give yourself at least two months when starting your apartment search. Oftentimes, people with available apartments start searching for a subletter two months in advance, while others leave it until the last minute. To give yourself ample time to find an apartment that fits your budget, location and lifestyle, start your search early.
And remember, there may be a lot of competition. When you start early, you get in touch with more people looking for a place to sublet. That gives you more choices in terms of who you want to have living in your room. By giving yourself time, you’ll have the opportunity to get to know them. Ask them all the important questions: Background checks? Will they pay on time? Is your landlord OK with it? Will they keep your room clean? Are your roommates OK living with them?
How can I find a short-term rental?
Now more than ever, there are various platforms to use to search for sublets or short-term rentals.
Facebook is great if you want to write a short description of your apartment and post a few pictures for more elaboration. It’s also great for networking due to the sheer volume of people using the platform for the purpose of seeking/subletting an apartment. However, if you’re the one finding a room/apartment, you’re bound to spend hours on your Facebook timeline reading every little detail to find your perfect fit. This happens because, in the post format, the information is not standardized.
If you want an interactive experience, Hoamsy is a Boston-based platform that uniquely allows you to list and find sublets. Once you make a profile, you’ll get personalized leads based on your preferences. Once you find a match, you can directly connect with them through Hoamsy’s direct messaging feature. It’s a great resource for people looking to find sublets.
Apartment rental sites like Apartment Guide and Rent. are good platforms to use if you have a very specific apartment in mind. You can filter your search to show only properties that offer short-term rentals. They also have listings available in most major cities and give you a ton of guidance on all aspects of moving on their blogs.
Enjoy your freedom of subletting a room
It’s always good to have options and flexibility and subletting a room definitely gives you the opportunity to do that. Just much sure you understand the process before you get started, and get permission from your landlord before doing anything!
The information contained in this article is for educational purposes only and does not, and is not intended to, constitute legal or financial advice. Readers are encouraged to seek professional legal or financial advice as they may deem it necessary.
Clarissa Garza is a Product Marketing Associate at Hoamsy, a real estate tech platform, where she works on content creation, acquiring new users and copywriting. Clarissa is a student at Boston University with experience in marketing and journalism. Aside from Hoamsy, she is a Statehouse Correspondent at The MetroWest Daily News.
Let’s talk about how sublets work and outline everything you need to know about subletting.
What is subletting?
Subletting is a process where a tenant rents their apartment to someone else for the duration of the lease. The terms and conditions of the original lease stay the same and the original tenant’s name remains on the lease, but the new tenant moves in and becomes responsible for paying rent and utilities. Subletting allows the original tenant to move while renting out their old space to someone new.
A few helpful definitions
Before we explain how sublets work in more detail, here are a few keywords defined.
Subleasing: Subleasing is another term for subletting. Both words refer to the process of renting an apartment or room to someone else.
Lessor: A lessor is someone — commonly called a landlord or property manager — who owns the property and rents it out.
Lessee: The lessee is also known as the renter or tenant. A lessee rents a room or apartment from the lessor.
Sublessee: A sublessee, also called a subtenant, is the person who rents a room or apartment from the lessee when subletting.
Reasons to sublet an apartment
Ideally, when you rent an apartment, you can commit to the terms of the lease. However, life happens and you may find yourself needing to move out prior to the end of the lease. Some situations for moving out early and needing to sublet may include:
Getting married
Having a baby
Graduating college
Relocating for work
Needing more room
Cutting expenses
Moving back home
Regardless of the reason, subletting is a viable option to consider.
How do sublets work?
So, you’ve found yourself in a situation where you need to move, you don’t want to break the lease and you’ve decided to sublet your apartment. Here’s how to go about subletting an apartment.
1. Review your lease agreement
Before you start interviewing candidates for a sublessee, you need to take some time to thoroughly review your current lease agreement. You’ll want to check that subletting is allowed in the first place and fully understand what you can and can’t do.
If you need help understanding the legal jargon of your lease agreement, talk to a lawyer or your landlord. This is a scenario when the fine print matters.
2. Make sure subletting is legal in your state
In some states, subletting is legal, and in others, it’s not. Laws vary state by state so you’ll need to conduct research to understand if subletting is legal in your state.
3. Talk to your landlord
Once you’ve done your homework, reviewed the lease and state laws, it’s time to talk to your landlord and let them know you’d like to sublet the apartment. It’s polite to ask, and not tell them, what you’re doing. Schedule a meeting to let the lessee know your intentions and go over any and all details that are necessary to formally sublet the space.
You can also send them a formal letter requesting permission to sublet.
4. Find a sublessee
Once you’re in agreement with your landlord that you can sublet the apartment, it’s time to find a sublessee. This is your responsibility, not the landlords. You can place ads for a sublessee on social media groups or check out different apps that help you search for roommates or sublessees. Just make sure you find someone you trust as your name is still legally on the lease and your reputation is on the line.
5. Determine the details of your subletting agreement
When you’ve found someone to sublet the apartment, schedule a meeting to go over the details of the subletting agreement. How long will you sublet for? Will the sublessee be responsible for all rent and utilities? When can they move in? Do they need to pay you a security deposit? Get all of the details worked out ahead of time.
6. Get your subletting agreement in writing
Verbal agreements are not sufficient when it comes to subletting. Get all of the details written down so you have a paper trail should things go awry.
7. Coordinate the move with your new sublessee
Have everything in order with your landlord and sublessee? Now it’s time to coordinate the details of when the transition will happen.
Pros and cons to consider when subletting an apartment
As with everything in life, there are pros and cons to subletting an apartment. Because a lease is a legally binding contract, you want to take it seriously and really understand the repercussions — both good and bad — of subletting your apartment.
Pros of subletting an apartment
Keep your lease intact: Subletting allows you to keep your lease intact without breaking the terms and conditions or paying a penalty for breaking the lease early.
Keep your deposits: Subletting allows you to keep the security deposit and first and last month’s rent without forfeiting it. You can save a lot of money by subletting an apartment.
Ability to move as needed: When you find yourself needing to move quickly, subletting allows you to move and still keep your current place of residence. Perhaps you just need to move for three months and want to come back in 90 days? Subletting allows you that freedom.
Cons of subletting an apartment
Difficult to find a sublessee: It can be difficult to find someone trustworthy to take over your lease in a pinch. You want to make sure you trust the sublessee as the lease is still legally in your name.
Stressful to coordinate: Planning a move is difficult in and of itself, let alone trying to coordinate with a sublessee.
Potential of sublessee backing out: While you’ll want to get an agreement in writing with your sublessee, they still can back out of the agreement, leaving you in a bind.
Subletting is an option to keep in mind
Now that we’ve reviewed how sublets work, you’ll know how and what to do should you ever need to sublet an apartment yourself. Or, if you’re looking for a place to rent but don’t want to sign a lease yourself, being a sublessee may be the right option for you.
Sage Singleton is a freelance writer with a passion for literature and words. She enjoys writing articles that will inspire, educate and influence readers. She loves that words have the power to create change and make a positive impact in the world. Some of her work has been featured on LendingTree, Venture Beat, Architectural Digest, Porch.com and Homes.com. In her free time, she loves traveling, reading and learning French.
Investing in real estate is some of the oldest and most reliable financial advice in the books. Few other assets can compete with real estate’s vast array of benefits. These benefits include tax advantages, appreciation, relative impunity to market shifts, and even the potential for passive income.
But even if you have every intention of investing in real estate, it can be challenging to get started. After all, even a modest home usually requires a substantial down payment. And it can take years to save up those five-figure sums. The term “real estate investor” may bring to mind a multi-millionaire who manages several properties, leaving you feeling overwhelmed enough to give up the ghost entirely.
Fortunately, it is possible to invest in real estate with little or no money, even if you aren’t swimming in discretionary income. For instance, with an Opportunity Fund or REIT (Real Estate Investment Trust) you can get your foot in the door even if you can’t afford to purchase an entire property. There are also a host of ways to leverage your own home. These include house hacking, renting vacation space on Airbnb, and more.
In this post, we’ll break down everything you need to know about how to invest in real estate. We’ll go over some of the most common types of real estate investing. We’ll also break down how they can help you make money. And we’ll explain how you can begin, no matter how much capital you have in hand.
Why Invest in Real Estate?
Before we dig into the meat of the post, let’s take a moment to backtrack. Why is real estate investing such a well-worn piece of financial advice?
You’ve probably heard that diversifying your portfolio of real estate investments is essential. But your “portfolio” doesn’t just have to live on the stock market! Real estate investing gives you, as the name suggests, a real, tangible asset. And it’s much less vulnerable to the capriciousness of the market.
Real estate investing can help you not only build home equity but also generate passive cash flow. Both through the process of appreciation and the more intentional, hands-on approaches we’ll study further below. And owning your own home can help you reap financial benefits while simultaneously providing for one of your most basic needs.
How to Invest in Real Estate with Little Money
When a down payment might cost as much as $60,000, it’s understandable that many first-time property shoppers feel overwhelmed. They say you have to spend money to make money. Yes, but that’s quite a hefty figure for the average American earner.
To be sure, some real estate investment strategies require a good deal of cash upfront to be workable. But there are other tactics that don’t necessitate such a large lump sum to begin with. This means you don’t have to be a real estate mogul to be a property owner. We’ll break down various strategies at both ends of the spectrum below.
Types of Real Estate Investing
Let’s get into the nitty-gritty. What types of real estate can you invest in?
There are three main types of investment properties available to real estate investors.
Residential properties are probably the ones you’re most familiar with. They are exactly what they sound like: buildings used by individuals and families as residential living spaces. These properties include single-family homes, duplexes, apartments, condominiums, and townhouses, and multi-family homes (so long as they’re being used residentially and don’t exceed four units).
Commercial real estate are properties used to conduct business. They may include offices, storefronts, retail spaces, farmland, and large multi-family houses or apartment buildings.
Industrial real estate are properties that serve industrial business purposes, such as factories, power plants, or storage and shipping warehouses.
Furthermore, there are both active and passive forms of real estate investing.
Active investing is, well, active. It requires a good deal of time, energy, and commitment from the investor. Active investing may become a part- or even full-time job for the investor. They usually share ownership with few (or no) other people and thus bears a lot of responsibility for the success of the investment.
Passive investing, on the other hand, allows the investor to reap the benefits of investing without taking on the pressure and responsibility of full ownership of a tangible property. In most cases, passive investing involves supplying capital to a larger investment pool. You earn capital gains on loan interest through dividends paid to shareholders.
We’ll go into it all of this in more detail, including specific ways you can invest in real estate, both active and passive.
How Real Estate Investing Can Help You Earn
Before we break down the specific ways you can get started investing in real estate, let’s talk about how it can help you make money. (After all, that’s the whole point!)
You can invest in real estate in several ways, depending on what type of investing you’re participating in.
Equity and appreciation
Purchasing real estate equips the owner with a “hard asset”; the tangible property or building. Owning this kind of asset confers equity, or value. It isn’t as vulnerable to the fluctuations of the market as stocks, bonds, and other securities. Furthermore, property has a longstanding history of increasing in value over time, or appreciating.
On the contrary, other types of purchases (like automobiles) depreciate, or lose value. Thus, purchasing a property may allow you to earn income passively simply through the process of appreciation. It more or less ensures that the cash value of your home is a safe and stable part of your overall net worth.
Rental income
Chances are, you’ve had to pay rent to a landlord at some point in your life. Well, if you become the landlord, someone’s paying you the rent. And as long as that rental price eclipses your total expenses, including your mortgage and maintenance costs, the rest is profit!
Aside from managing the investment property, you can also collect rental income by sharing your space on platforms like Airbnb or house hacking, which we’ll explain below.
Sale profit
This happens when you buy a home with the intention to fix it up and sell it down the line (also known as “house flipping”.) It’s the difference between your sale cost and your purchase cost (minus all the expenses put into maintenance and improvements) is pure profit.
Loan interest
The interest charged on home and property loans can increase the value of real estate investments made through REITs, investment platforms, and private equity firms.
Ways to Invest in Real Estate
Now we know a bit about the different types of properties available to investors and how those real estate investments stand to help you earn cash.
So, what are the specific ways to go about real estate investing? There are several in both the “active” and “passive” categories.
Active:
House flipping, or rehabbing, is when an investor purchases a property with the sole intent of fixing it up to sell it later on.
Wholesaling is similar to flipping houses, but less work intensive. Wholesaling occurs when an investor purchases a property they believe is underpriced, so they can quickly sell it to another investor at a profit.
Rental properties give investors a long-term way to draw profit from their investments, though they do require lots of hands-on management and maintenance over time.
Airbnb, Vrbo, and other vacation rentals can often be listed for substantial per-night prices. They can be especially lucrative in high-demand travel destinations.
Passive:
Private equity funds pool the assets of many investors, which creates a larger, more powerful investment fund. These funds are usually overseen and allocated by a dedicated manager. They may have high minimum investment thresholds and requirements to join.
Opportunity funds also pool investors’ assets, but with the specific purpose of making investments in qualified Opportunity Zones. These are low-income, up-and-coming communities that would benefit from private investments and economic development.
REITs are companies that invest in commercial properties. Private investors can purchase shares of the company and earn income on capital gains in the form of dividends.
Online REIT platforms can make real estate investing accessible to beginning investors, often carrying no net worth or accreditation restrictions. They may allow you to invest in specific properties or in pre-built, diversified portfolios of real estate.
We’re going to break down these different investment options in even more detail below. But first, let’s start a bit closer to home—literally.
Starting with Your Own Home
One of the most straightforward ways to invest in real estate is probably already on your financial to-do list, anyway: purchasing your own home.
Purchasing a home of your own allows you to kill two birds with one stone. You’re taking care of the basic need of shelter, while also leveraging the purchase to reap a host of financial benefits.
Here are just a few ways that owning a home can help you save and earn money.
Build equity: As discussed above, property ownership confers relatively immutable equity to the purchaser—that is, your home is a fairly safe, tangible asset to add to your overall investment portfolio.
Receive tax benefits: Certain homeowners’ expenses, including real estate taxes and home mortgage interest, are tax-deductible. And if you sell your home, you may exclude up to $250,000 of capital gains (or $500,000 if filing jointly) from your taxes.
Take advantage of appreciation: Even accounting for the 2008 crisis, the cost of homes and other properties have steadily increased over time for the past 50 years. So, the home you purchase today will likely be worth more than the price you paid for it in the future.
Stop paying rent: Although you’ll likely still have a mortgage payment and other expenses to cover as a homeowner, you won’t be paying rent to live in another person’s property. It’s a cost that is essentially entirely wasted, since you aren’t building home equity in the rental property.
Keep the value of your home improvements: When you own a home of your own, any improvements you make will add to the property’s total value, beefing up your asset as well as beautifying your living space.
House Hacking
Another way to make money by purchasing your own home is known as “house hacking“. It’s a real estate investment strategy wherein you leverage rental income from your primary residence to live there cost-free.
The term was originally coined by entrepreneur and author Brandon Turner, who wrote “The Book on Investing in Real Estate with No (and Low) Money Down” and “The Book on Rental Property Investing.”
House hacking may be done, for example, by purchasing a duplex. The investor rents out one unit at a price that covers the mortgage cost while living in the second unit. Some homeowners have also used space-share platforms like Airbnb to offset their housing costs in the same manner.
Real estate investors can use this strategy to pay off the property and even create a profit margin. This will eventually allow them to invest in more rental properties. Thus, house hacking is a great way to combine the personal financial benefits of homeownership with the long-term earning potential of other types of property investment.
Buying a Home Without a Huge Down Payment
Given the recent trends in the housing market, you may feel daunted by the prospect of becoming a homeowner. In 2023, the U.S. housing market experienced significant challenges, with home prices rising to near-record highs.
But there are many incentives and programs designed to make this large investment more feasible for first-time home buyers.
FHA (Federal Housing Administration) Loans may allow borrowers to purchase a home with a down payment as small as 3.5% of the purchase price and with credit scores as low as 580. (You may also be approved for an FHA loan with a lower credit score, but your minimum down payment may be higher.)
The USDA also offers low-cost loans to low- and moderate-income households purchasing homes in qualified rural areas.
Down Payment Assistance Programs offered by local governments and private firms can provide grants, loans, and educational materials to prospective home buyers
Many other financial institutions and organizations also have special incentives for those purchasing their first homes or low-income families in the housing market. Make sure you check with your local housing authority to learn more about what’s available in your area.
Active Investment Opportunities
Want to get hands-on? Here are the details on some of the most popular and accessible active real estate investment opportunities.
House Flipping
If you’ve ever watched more than thirty minutes of HGTV, chances are you’re at least passingly familiar with the idea of flipping houses. It’s basically where you purchase a home with the express intent of fixing it up and selling it (at a higher cost) later.
House flipping is a great way for investors to earn a significant profit. However, they do need to know how to complete the flip successfully without incurring too many costs. Expenses can quickly eat into the investment’s return.
Finding a Home to Flip
House flippers have to be able to recognize a home that may be slightly undervalued but would be able to sell well given the proper upgrades. This involves both an understanding of the area’s desirability and the types of improvements that generate increased home value.
House flippers are responsible for the entire cost of the home purchase. They must also pay for all the upgrades, which they may either do themselves or hire out to professionals.
Either way, flipping houses incurs a hefty up-front cost, and it does come at a risk. Even after you make all the improvements, it’s possible that the house will languish on the market.
This can mean racking up maintenance, taxes, and other expenses for the real estate investor. However, a properly executed, short-term flip can create a substantial profit margin in a relatively small period of time.
Wholesaling
Like house flippers, wholesalers purchase homes with the intent of selling them quickly. But, they aren’t planning to do any heavy lifting along the way.
Instead, wholesalers find properties that are undervalued for their market. They scoop them up and resell them to other investors at a price closer to their true value. Thus, earning the difference as a profit.
Rental Properties
While managing rental properties may seem like a straightforward and reliable way to earn income, it’s one of the most work-intensive approaches on this list. It does require enough up-front capital to purchase the property (or properties) in the first place. However, landlords do stand to see substantial and steady returns in exchange for the work and effort they put into their properties.
After purchasing a viable property, which needs to be well-maintained, in a desirable location, and well-advertised, landlords are responsible for filling that property with qualified tenants. This can involve a time-consuming and labor-intensive screening process.
After all, as a landlord, you’re giving your renters the keys to your investment—literally! It can be a very risky move if you don’t take the time to ensure your tenants are well-qualified.
Finding & Qualifying Tenants
Along with running a standard background check, landlords may also conduct interviews with and request credit reports from prospective renters, all of which takes time. And don’t forget: every month your rental property is unfilled is a waste of potential income.
Once you do find qualified tenants, you’ll be responsible for a host of obligations unless you hire a property management company. You’ll need to provide maintenance and repairs. You’ll also need to stay on top of rent collection and record-keeping. It can quickly become unwieldy once you have several properties.
You’ll also need to be sure you’re in compliance with all the renters’ rights that exist in your jurisdiction, including laws that regulate the eviction process. Of course, you’ll need to put in the work to find good renters and a well-maintained property in the first place. When done so, managing rentals can provide a smooth and steady source of income for relatively little active work.
Seller Financing
Want to buy an investment property with no money down? Look into seller financing or a land contract. This is where the seller acts as the bank. You make your mortgage payments, including interest, to the seller.
After a few years or so, you will have enough equity in the home to get a bank loan. You can then make a lump sum payment to the seller.
Private & Hard Money Lenders
Private money lenders generally charge between 6% to 12% on the money borrowed. Hard money lenders usually charge 10% to 18%. Hard money loans are not from banks. They are from individuals or businesses aimed at financing real estate investments for a return on their money.
Hard money loans are used by investors who don’t qualify for conventional financing. They are typically used to fund renovations. Once the house is finished or has some equity in it, the borrower then refinances to a conventional mortgage with a lower interest rate.
Airbnb, Vacation Rentals, and Space Sharing
Managing a traditional property, wherein renters sign a multi-month lease, is not the only way to make money from an investment property. Platforms like Airbnb have revolutionized the real estate market. They allow homeowners (and sometimes even renters) to make money by renting out their space on a temporary, per-night basis as a vacation rental.
What’s more, you don’t necessarily have to rent out an entire home or unit to participate. A private room, or even a couch in a shared living room, is acceptable for some travelers using these services.
Airbnb and other vacation rental platforms make it simple for a novice renter. You don’t need to have a huge amount of know-how to start earning money this way. In fact, you don’t even necessarily have to “invest” in any property at all. Some landlords may allow their renters to list their housing on Airbnb as a sublet.
Airbnb Laws
However, as this new form of investment property has expanded, it’s created housing crunches in some cities. It’s resulting in “Airbnb laws,” or short-term rental legislation. These laws may limit your ability to use your housing in this way.
Always check your local regulations before you list your space on Airbnb or another of these types of platforms. If you don’t own the space, ensure that short-term sublets are allowed. Check your lease or ask your landlord directly.
Real Estate Investing Groups and Passive Investing
You may have noticed that many of the active real estate investment opportunities listed above do require substantial upfront capital to get started. You can’t wholesale or flip a house if you can’t purchase the house in the first place!
Furthermore, these active strategies generally involve a high level of skill, effort, and responsibility. It may not be feasible for those committed to other full-time careers.
Fortunately, there are still other ways to get involved with real estate investing, even if you don’t want to own or manage tangible property. (Or if doing so is out of financial reach for you right now). These passive investment tactics can help you glean the benefits of real estate investing without taking on quite as much of a fiscal and physical burden.
Private Equity Funds
A private equity, or PE fund, pools contributions from various investors to make larger investments. They’re often limited liability partnerships. That means there are fixed periods during which investors do not have access to their holdings.
Instead, PE funds allow investors to earn gains on debt and equity assets passively, without putting in much active work or research. Asset allocation and investments are managed by a dedicated individual or group. They earn money through annual fees as well as profit sharing.
PE funds come in various types, including the following:
Core equity funds generally invest in established commercial properties. They don’t carry risks like needing major improvements or experiencing losses for lack of consumer demand. The core strategy is simultaneously the least risky among PE funds and, typically, the least gainful.
Core plus equity funds generally follow the core strategy, but take a few more risks on properties that may require minor upgrades. This leads to a higher risk-return ratio on average.
Value added equity funds may invest in commercial properties that require substantial upgrades or new management to operate at their full potential. They may also seek to sell the property after improvements are made to create an additional profit margin.
Opportunistic equity funds offer the highest potential rewards, along with the highest risk. Investment properties purchased via these funds may need new construction or even land acquisitions. The payoff of such a new business venture is all but guaranteed. Furthermore, these developments take time, which means your investment capital may be tied up for longer. However, when they pay off, opportunistic equity funds see some of the best returns of the bunch.
Although PE funds are powerful real estate investment engines, they do often have high minimum investment requirements, generally not less than $100,000. Some funds may also be limited to accredited or institutional investors who can demonstrate available means.
Opportunity Funds
Opportunity funds operate on a similar model to private equity funds but are specifically used to make investments in qualified Opportunity Zones. These are economically distressed areas designated by the state and certified by the Secretary of the U.S. Treasury. Opportunity funds are legally required to invest 90% of their assets into properties in these Opportunity Zones.
Because these areas tend to be up-and-coming (and because tax benefits can incentivize investors to support them), opportunity funds often see substantial capital gains for their investors. And taxes incurred on those gains can be deferred until December 26, 2026.
That means the longer the investment is held before that date, the lower your overall tax liability will be. And opportunity fund investments held for at least ten years prior can expect their capital returns to be permanently excluded from capital gains taxes.
Of course, this strategy requires parting with your investment capital for a significant period of time. It’s best for those who can afford to put down the money to play the long game. If you can, however, investing in one is a great way to see substantial returns for almost zero effort.
Real Estate Investment Trusts (REITs)
A real estate investment trust(REIT) is a company that invests in commercial properties. As an investor, you purchase shares of this company just as you would any other. You earn income through its debt and equity assets in the form of shareholder dividends.
REITs operate similarly to mutual funds. They provide an excellent way for the average earner to experience the benefits of real estate investing. You don’t have to have a huge amount of capital to get started, as minimum investment requirements may be quite low.
However, they may carry high investment fees, especially in the case of private REITs (i.e., those not publicly traded on the stock market). Fees at these companies may run as high as 15%. REITs may also be illiquid and keep your money locked up for longer periods of time.
Online Real Estate Investment Platforms
In this digital, all-sharing-all-the-time age, most of us have already heard of crowdfunding. Real estate investments are no exception to the rules of the new millennium.
Online real estate investment platforms have begun springing up. They can make real estate gains achievable for average investors who may not have the towering net worth or accreditation status necessary to buy into more formal funds. Depending on the specific company, you might be able to choose specific investment properties to fund or buy into a diversified portfolio of investments.
Fees and minimum investment requirements are relatively low on real estate crowdfunding platforms. For instance, Fundrise lets you get started with just $500. That is much less than you’d have to pay to get in on most types of active investments! Check out our full review of Fundrise here.
Ready to Get Started Investing in Real Estate?
As you can see, there are several ways to start investing without saving up a five- or six-figure sum. And if you do it right, your investments can actually help you reach those high savings goals. You can then fund other types of investment projects!
However, as with any financial objective, planning and strategizing is key. Saving up as much capital as possible will help you get the best return on your investment once you’re ready.
You can’t allocate your assets without first keeping track of them, and to achieve that, you need to create a budget. If you’re in debt, aggressively paying it off will free you of a weighty financial anchor, so check out these powerful debt relief options.
Finally, if you intend to purchase property either to live in or as an investment opportunity, your credit score matters. It’s as simple as that. If your credit score isn’t quite where you want it to be, take these steps to raise it. Doing so will allow you to get the best interest rate once you’re ready to make the big purchase.
Somewhere between a sunroom and basement lives the daylight basement. Unlike basements that live entirely underground, daylight basements are only partially underground. Their defining trait is at least one or more windows that let the “daylight” in.
So, why are renters looking for properties with this unique space? With some imagination and a little design savvy (or a friend with some), you can turn these spaces into cozy family rooms, a playroom for the kids or a guestroom. Really, these rooms offer nearly endless possibilities. Let’s discover why renters are searching for the elusive daylight basement and what you can do with it once you find one.
What is a daylight basement?
Daylight basements are partially underground rooms with at least one full-sized window. And that’s about it. As you can imagine, they come in nearly every size and shape, with many found in homes built on slopes. This natural topography offers the ability to build into the sloping terrain, creating a space that’s partly in the ground yet has a window and a view.
These unique spaces are sometimes confused with walkout basements. However, unlike a walkout basement, daylight basements don’t have exterior doors.
What are the benefits of a daylight basement?
In addition to more room, which is almost always appreciated unless you’re a tiny-house aficionado, daylight basements offer several advantages.
Natural light: The natural light brings daylight indoors, providing a connection with nature. It’s a much more welcoming environment than basements with no outside view, enhancing the livability.
Expand the living area: Daylight basements can add significant usable square footage to your rental.
Cooler: Depending on where you live and the season, this feature can fall into the plus or minus column. Because they’re partially underground, they tend to be cooler than the rest of the house. It’s part of the reason basements first gained appeal. They offered a colder location to store food, mead and ale, helping these vital necessities last a little longer.
A room with a view: Need we say more?
Feels like a living space: Unlike basements that can feel dark and uninviting, the natural light of a daylight basement creates a warm and welcoming atmosphere.
What are some problems with daylight basements?
As with any room that’s partially below ground, there are a few challenges you may face.
Leaks: Because these rooms are lower than the rest of the house and partially subterranean, they’re more susceptible to leaks, excess moisture and water damage. Water can seep through the walls or find its way through any cracks in the foundation. If unchecked, this damp environment can lead to mold and mildew. Fortunately, the natural light makes daylight basements less susceptible to mold growth than in-ground basements.
Limited sunlight: Depending on the slope of the home and the direction it’s facing, there may be limited sunlight. If this is the case, consider asking your landlord for permission to paint it. Light-colored ceilings and walls, as well as mirrors, help make the space feel more open and brighter.
What is a daylight basement used for?
This extra space is up for grabs. Is there an artist in the family? Would a home office be beneficial? Maybe a home gym or a place for the kids to be, well, kids. Possibly a craft room, mancave or music room?
Here are a few of the top daylight basement design trends:
Game or media room: Do you enjoy entertaining or game night with the family? Daylight basements offer the perfect space for bringing everyone together. Depending on the size, you might consider a foosball or pool table, sitting areas for card and board games and a wet bar. Add a 4K HDR TV with a soundbar or speakers, and you’re prepared for the ultimate entertainment.
Home office: It can be challenging to fit a home office into a rental property, with bedrooms often destined for family members. This quiet, light-filled space can provide the ideal retreat, a place to work or read a good book. No one will know.
Home gym: We all struggle with finding the time (or the motivation) to work out. Having a room dedicated to keeping fit is nothing if not inspirational! Some popular options for home gym equipment include an elliptical or stair climber, stationary bike, punching bag, bench press or treadmill. Of course, you can always turn it into a hot yoga studio with some mats, blocks and a heater that can get the room to at least 90 degrees Fahrenheit.
When decorating your new space, check out our home decor color trends and the top 2023 Amazon home decor and furnishing selections for inspiration.
Depending on the setup, another option for your daylight basement may be subletting. Some renters, with the landlord’s permission and an okay from the local municipality, sublet the space, helping to defray the cost of the rental.
Is a daylight basement right for you?
It’s hard to beat a functional and stylish daylight basement. However, the added square footage often translates to higher rent. Consider your budget and how you would use the space to help you determine if this unique architectural addition is worth the cost. Also, make sure to check for excess moisture or mold before signing the lease.
Try to find the right place for you by searching our apartments and homes for rent in your target city.
Knowing the right questions to ask when touring an apartment puts you in that get-to-know-you space with each prospective home. It ensures the time you spent touring a potential rental isn’t a waste of energy and gives you a chance to see if the space, and the management company, are the right fit.
The first time you see a place is the best time to get all your questions answered. Not sure what to say? Here are the 21 best questions to ask when touring an apartment.
1. What are the lease terms?
Ideally, you should already know when the lease begins and ends before you even start asking questions while on an apartment tour. If for some reason you aren’t, make sure you get clarification on when move-in is and how many months the lease is for.
Inquire if there are any other common lease terms you should know like quiet hours or restrictions on painting or putting holes in the walls.
2. How much is the rent?
It is also essential to know if the apartment you’re looking at really fits into your budget. Ask how much the unit will cost per month and what the manager’s late rent policy is. Be sure to find out if there’s a grace period if you get delayed making a payment.
Also, ask about fees and how much money you’re expected to bring with you when you sign the lease. This should include a security deposit and possibly first and last month’s rent, but other costs could factor in.
If upfront fees are too costly, ask if there are any you can roll into your monthly rent and pay over time.
3. What’s required to move in?
Each property handles moves differently, so make sure to ask what moving in will look like for you financially while visiting apartments.
For instance, are there any moving or elevator fees? Do you have to get a special permit to have a moving van parked on the street? What area of the parking lot can you take over on the move-in day and does the management company block it off?
If you’re moving in on a popular day you may have to compete for space and wait to use the elevator. If that’s the case, see if you can delay your move by a day or come a day early to have an advantage.
4. Are utilities included in the cost?
Utilities aren’t always automatically included in the cost of the rent. Water is commonly factored in, but heating, gas and electricity are often paid for by the tenant. If you’re concerned about utilities, contact your local provider for an estimate.
5. How much do utilities cost, on average, if they’re not included?
Your property manager will most likely only be able to guess, but based on the size of the apartment, they should have some idea what you’ll end up paying, out-of-pocket if items aren’t included with rent.
To cover your bases, the average for basic utilities is around $172 per month. However, climate and energy costs vary between states — so always budget for a little more.
Do I need to get my own internet? Apartments rarely come with Wi-Fi waiting for you. Instead, you’ll have to find your own internet service provider to hook you up. Look for deals and make sure to price compare. Also, take into account the bandwidth you’ll need to ensure the right connection.
6. What’s your pet policy?
Whether you own a pet or think you might want to adopt one, you should absolutely ask about a building’s pet policy while touring an apartment. Make sure pets are even allowed before getting into the nitty-gritty details like pet fees, extra cleaning charges, etc. Pet policies vary widely, but most properties charge a non-refundable pet deposit or monthly pet rent.
Never try to hide a pet in an apartment where you know it’s not allowed. Getting caught can get costly, and lead to you having to get rid of your animal. Check to see if there are restrictions on breeds or types of pets allowed as well.
7. How about your guest policy?
When touring an apartment you might not think to ask questions about guests, but it’s an important thing to know. Most leases mention a guest policy but some are stricter than others. For instance, in some places, having a visitor for longer than two weeks isn’t technically allowed (which means your friend’s plan to spend the summer on your couch won’t work).
It can also impact your ability to have overnight guests for even a short time. So, make sure you know what’s allowed before you make any plans.
8. How do you handle subletting?
Say you were between jobs and wanted to go home for a month to see family. You don’t want to lose your apartment, so the best thing to do is sublet. But, is it allowed? Your lease should specify, but don’t hesitate to ask an apartment manager or landlord to clarify the situation.
Subletting without permission can lead to eviction. There’s also the fact that you’re still responsible for any damages to your apartment — even if they’re not made by you.
If you do end up subletting, make sure the person is reliable and will treat your space right.
9. Am I allowed to add a roommate?
While you may start your apartment hunt a little earlier than a close friend, you could already know that you’ll want to pull him or her into your place to live as roommates. This may mean you’d sign the initial lease on your own, so find out if it’s OK to make changes later.
Your property manager may require you and your roommate to come in and sign an updated lease together so both your names are on the document. It may also change how you pay rent.
Don’t forget to talk about expense sharing, in general, with your roommate before they move in and make sure they understand the apartment rules. You may even want to establish some of your own for when you’re living together.
10. Do you require renters insurance?
Renters insurance is another thing to think about while apartment hunting. Renters insurance provides coverage for your property in the event of things like a fire, flood or theft.
It may also cover injuries that happen within your apartment. This type of coverage tends to cost very little per month, so it’s a good idea to add it anyway.
While renters insurance is always a good idea, some apartments require it — so it’s important to ask while making visits. You don’t want to scramble to get insurance the day before you move in, otherwise, you might not get the keys.
11. How do I pay rent?
Saving up for rent each month isn’t the only thing you need to consider. At some point, you’ve got to get that money into the right hands.
Most management companies will offer you a few options when it comes to paying rent. These can include online payments or going through a service. This is the easiest way to make payments since you can often set up an auto-draft, but if you’re dealing with an individual property owner, ask about limitations. Even if you’re delivering or sending in a check each month, make sure you have clear information on where it goes, who it’s addressed to and by what day it should arrive.
12. Is there a penalty for breaking my lease?
It’s a good idea to become familiar with the process should have to break your lease. While that’s never the plan, knowing ahead of time what you’d have to do helps you prepare for anything.
Especially if you move around a lot for work or anticipate upcoming life changes, signing a year-long lease might be the wrong choice. Make sure you understand the penalties for early termination and ask if it’s possible to sign a month-to-month lease instead (just make sure you know how early you have to give notice when it’s time to go.)
13. How are repairs handled, especially in an emergency?
Even if everything appears in good working order when you’re looking around, questions to ask when touring an apartment should always cover maintenance.
Ask how emergency repairs get handled. Clarify if there’s maintenance available 24/7 or just within specific hours, and find out what the average response time is.
Now is even a good time to figure out what types of repairs your property manager would rather you handle (if any). Whatever the process, you want to know ahead of time to ensure a speedy conclusion to any emergency (or everyday) needs.
14. How do I file a complaint?
Again, even if you casually meet the people living near the vacant apartment you’re considering and they seem nice — it’s hard to tell what living with them will be like. Your lease should break down the process for filing a complaint, but you may want to go over it with your property manager just in case. Often, they’ll prefer something submitted in writing.
It’s also worthwhile to note that complaints aren’t always about noise. While that’s a big one, common complaints are also about pets, trash in the hallways and even strange smells coming from another unit.
15. How secure is the property?
As you’re walking around, ask the property manager to cover the building’s security features. You will want to know about both inside and external security measures (like a buzzer system or doorman). If there’s a parking structure, go over how you enter from there to make sure you feel safe.
It also doesn’t hurt to ask about the neighborhood and how safe the area is as a whole. Go online to check crime statistics if you’re concerned, but often just walking around the area yourself will give you a feel for its safety.
You don’t want to move somewhere that doesn’t feel comfortable to you whether you’re inside your apartment or not.
16. What’s your pest control policy?
A perk of living in an apartment building is that you don’t have to handle pest control. Since a pest invasion affects the entire property, it’s up to your property manager to keep pests away. This includes everything from ants to roaches, bedbugs to rodents. Ask if they have a regular pest control company come and spray, whether they’ll set traps if necessary and how to report a pest infestation within an actual apartment.
You don’t want to live somewhere that doesn’t take pest control seriously, however you can definitely get proactive and set some bait traps yourself if you notice a few ants here and there. Anything larger — call in the big guns.
17. How often does rent go up, and by how much?
Many apartments increase the rent upon renewal of the lease. These types of charges aren’t always spelled out in the rental agreement, so make sure you know going in how much you can expect to pay if you decide you want to live in the same apartment after your lease term is over.
If you’re looking for a long-term apartment, but the rent goes up by quite a bit each year, see if you can sign a long-term lease, say for two years instead of one and lock in a lower price.
18. What is the parking situation?
If you own a car, parking will sit high on your priority list. In many neighborhoods, especially in larger cities, street parking is hard to find and expensive to pay for separately so renting an apartment with a parking garage or lot will be necessary.
However, a personal parking spot or pass is often an added charge, so ask about any costs associated with owning a vehicle. You may not have a choice if you live somewhere that isn’t particularly walkable, but it helps to budget for the cost upfront rather than finding out about it later.
19. What other amenities are on site?
You’ve seen the apartment unit and parking if it’s available, now make sure to ask about the other amenities on site. Is there a pool? On-site laundry? An exercise room? A clubhouse? Ask about the hours of operation and whether any are available to reserve for special events. Find out how to do this and if there is an extra fee.
These extras usually only sweeten the deal once you’ve already found an apartment you love, but it’s nice to know upfront when and how you can use them.
20. Is smoking allowed indoors?
You may be of the mind that ‘to each their own’ when it comes to smoking, but sometimes a smoky apartment affects the neighboring units. Especially if you have an allergy, it might be best to live in a smoke-free building.
If it’s not something you mind, make sure to inquire about how often they check smoke detectors within each unit, and in public areas, and whether there are fire extinguishers on hand on each floor. About five percent of home structure fires start from smoking materials.
21. Are there plans to update the building?
This question covers a lot of things you’ll want to know. Construction or other work on the building is a sign of a lot of things — both positive and negative.
Construction in the building can mean you’ll be dealing with a lot of noise from every direction. However, renovated apartments are likely nicer than the unit you live in already, so you might get the chance to move once they’re completed. Improvements, though, can also be a sign rent is going up to repay the construction costs. Whatever it means, you’ll want to factor it all in before you sign the lease.
Know the best questions to ask when touring an apartment
There is an infinite number of questions to ask when touring an apartment, so make sure you prioritize.
Start with your deal-breakers since a ‘no’ to any of those means you’re moving on to the next apartment. You can even consider making a cheat sheet of questions for each apartment tour to keep track of answers, but also ensure you remember all the vital information once you’re back at home.
Regardless, don’t forget to speak up. This is, after all, your next home.
Apartment inspections aren’t just for when you move in or move out. As stipulated in the lease agreement, your property manager may stop by your apartment with notice to check on the property’s condition and make sure there aren’t any lease violations.
These routine inspections aren’t something to be afraid of. They help maintain clean, functional apartments and avoid expensive repairs or destroyed property beyond normal wear and tear. For example, if not caught early, water damage becomes a bigger problem.
Asking for more details about how a landlord does a routine inspection of the property is also a great question to ask during your tour of apartment complexes. Here’s what to expect.
Apartment inspection: What to expect
So what is an apartment inspection? You’re used to a move-in inspection when renting a new apartment. In this case, the property manager will walk the unit with you for a routine rental property check.
They’ll be looking for noticeable things, like how clean the apartment is and if any damage stands out. They’ll also look into things a tenant might not think about often like if smoke detectors are working, a pest problem, or any appliances need to be replaced. This is done to both keep the apartment safe and make sure tenants aren’t damaging property.
How many times does a landlord inspect an apartment? In most apartments, tenants don’t need to worry about apartment inspections happening every week or even every month. Landlords usually perform inspections just before a tenant moves in or out or do quarterly inspections.
How much notice should your landlord give?
It’s standard for landlords to give proper notice of 24-48 hours for an apartment inspection. Look at your lease agreement, as there should be a clause detailing the notice period before apartment inspections occur post move-in.
If the date is inconvenient for you or you need more time to prepare, talk to the property owners with plenty of time to agree on a mutual date to do a walk-through of the unit. Make sure to have all communications in writing and confirm whether the inspection will take place with you present.
Can you say no to an apartment inspection?
You can say no to routine inspections depending on your state’s tenant rights. Find out how much notice you need from the landlord to inspect your new apartment.
The property manager will eventually need access to your apartment (they have the legal right), but it can be on your own terms. In an apartment complex, you can let the property manager know you have pets and would like to be present, for example.
There are laws in most states that require a landlord to give written notice before they come to do apartment inspections, so you’ll know if someone is coming to perform an inspection of the property.
Make sure you know the exact laws for the state where you’re living — some require a 24-hour notice, while others may only require “reasonable notice” from most landlords.
What happens during the apartment inspection?
Landlords often have inspection checklists that they go through that reflect clauses agreed upon in the lease terms. A landlord inspection is also a great time to show wear and tear in the property — cracked window seals, broken appliances, broken windows, walls, bathroom, mold, plumbing or issues with fire safety.
Apartment inspection checklist
You must be prepared for apartment inspections, ensure everything is in good shape, and do any minor repairs before the walk-through. It will be similar to your move-in inspection, except the landlord will do the apartment inspections this time. Get your housekeeping skills ready for the routine check.
At the rental property, landlords will follow an inspection checklist and look at (but are not limited to the following):
Walls for any repairs or unpatched holes
Scuff marks on the floor or damage to carpets
Smoke detectors
Issues with appliances, including the exhaust fan
Water damage
Windows and if they open and close
Cabinets and any signs of mold
Front door and locks
With regular maintenance, landlords should take just a short time to inspect the property. Submitting maintenance requests regularly without delay will also help get a good inspection.
Check out our apartment maintenance checklist for simple tips for renters to stay on top of regular apartment maintenance and make every inspection a breeze. Doing this will also help you get your security deposit back.
What if you fail your apartment inspection?
It’s essential when renting to follow lease terms closely to avoid any issues as a renter. If you fail an apartment inspection, your landlord could evict you or fine you for the repairs needed to the unit. You can also lose out on your security deposit and any future referrals from the property manager.
You may fail your apartment inspection if:
You have pets in an apartment that is not pet-friendly or doesn’t meet the apartment complex’s regulations. This includes too many pets, types of pets and breeds outside of the rules
You sublet your apartment against the lease terms or keep guests for longer than it’s allowed by your landlord
You smoke in the apartment regularly, and the smell has seeped into the walls
You keep a dirty apartment and have developed signs of mold in the bathroom, walls and floors, or there are an unusual amount of holes in the walls
After the apartment inspections, it is up to your property manager to give you a second chance to fix holes, issues with the floor and carpets or any negligent damage after inspecting the unit.
Remember that while a move-in inspection has to you, the renter, being the inspector, pointing out existing damage or signs of wear and tear, a routine unit walk-through is for the landlord. Talk to your landlord after the failed inspection and attempt to find some common ground.
Do your part during the routine inspection
Whether or not there are regular inspections in your apartment, it’s always a good idea to be a respectful new renter and maintain your apartment in good condition. It will help get your security deposit back and avoid any costs.
Landlords and property managers often document and keep each apartment inspection on file. They can report on each apartment’s condition and determine if a tenant causes excessive wear and damage to the walls, floors, broken windows, carpets, appliances or anything else found while inspecting.
If unreasonable damage occurs in an apartment, tenants may be liable to fix or pay for repairs.
Wesley is a Charlotte-based writer with a degree in Mass Communication from the University of South Carolina. Her background includes 6 years in non-profit communication and 4 years in editorial writing. She’s passionate about traveling, volunteering, cooking and drinking her morning iced coffee. When she’s not writing, you can find her relaxing with family or exploring Charlotte with her friends.
Airbnb is continuing to fight back against restrictions imposed on it, even as cities continue to crack down on its short-term rentals business model.
The company is partnering with the Paris-based arm of the renowned real estate firm Century 21 in order to try and get around regulations that prevent tenants from subletting their homes on Airbnb.
In the past, apartment landlords in numerous cities around the world have complained that Airbnb encourages their tenants to break their contracts by subletting their rented homes. They argue that this creates unsafe conditions for other tenants, though it’s likely that in many cases the real reason for the discontent is that landlords are missing out on a larger profit.
Landlords are so upset at Airbnb that a group of U.S. property owners earlier this year announced their intent to sue the company.
Airbnb has already been subject to numerous regulations in some cities, who’re worried about its effect on local housing markets.
So now, Airbnb says it’s teaming up with Century 21 in Paris in a deal that it hopes will appease landlords and keep its business alive.
Paris has some especially tough regulations against Airbnb, but the city is also a massively popular tourist destination and therefore a key market. Under the deal with Century 21, landlords can now agree to allow their tenants to sublet on the platform, provided they get a cut of any deal. The agreement stipulates that landlords receive a 23 percent cut, and Airbnb will get 7 percent, from each guest stay.
“The goal is to make it easier to sublet so hosts can welcome guests up to 120 days per year on Airbnb,” Airbnb officials told HousingWire. “A win-win deal as tenants, landlords and the agency all share the income when a booking is made on Airbnb.”
“With the Airbnb-friendly lease, subletting will be much better supervised,” the company continued. “Moreover, this deal does not dry up the supply of housing in tense areas but encourages subletting of occupied homes.”
Airbnb said if the partnership proves to be successful, it will expand the program to other major cities.
Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at [email protected].