The real estate investment and rental market is constantly evolving, and with the rise of online rental platforms, finding an affordable place to live can be a challenge. One such platform making waves is PadSplit. But what is PadSplit, and how does it differ from other property rental investment options like Airbnb and VRBO? Let’s unravel what PadSplit is and guide you on how to buy a rental property tailored for this innovative platform.
What Is PadSplit?
PadSplit is a housing platform that offers affordable room rentals by the week, making it an attractive choice for individuals on a budget. Unlike Airbnb, PadSplit focuses on long-term affordability and fosters a community-centric living environment. This platform is gaining traction in various cities in Florida, Georgia, and Texas, including Houston, Tampa, Orlando, Atlanta, Dallas Fort Worth, Jacksonville, and more.
How Does PadSplit Work?
PadSplit operates on a model of shared housing, converting properties into individual rooms for rent. Unlike traditional rentals, it targets long-term affordability, providing a platform for property owners to list their spaces and for renters to find a room within their budget. The process begins with property owners listing their spaces, followed by tenant screening for safety, and digital lease management for ease of operations.
By focusing on long-term stays, PadSplit offers a stable income stream for property owners, and an affordable living solution for renters, addressing the common challenges faced in the rental market.
Tackling the Housing Challenge: How PadSplit Stands Apart
The inception of PadSplit was driven by a mission to alleviate the affordable housing crisis. By converting single-family homes or apartments into shared living spaces, PadSplit provides a solution for individuals earning less than $35,000 annually.
Most PadSplit residents are essential workers and cannot afford the high apartment rental costs in cities like Tampa. Through PadSplit’s model, residents can save significantly on monthly expenses, enabling them to improve their credit histories, buy vehicles, and in some cases, transition to owning their homes.
This initiative not only benefits the residents but also holds a promise of a higher return on investment for property owners, showcasing a socially responsible way to maximize rental income.
Short-Term vs. Long-Term Rental Investments: Why Consider PadSplit as an Airbnb Alternative?
For tenants, the allure of PadSplit lies in its affordability and simplicity. It’s a cheaper alternative to Airbnb, often favored by people seeking long-term stay options. By offering rooms for rent, the platform caters to individuals who are saving money yet desire a comfortable living space. PadSplit properties often include utilities and free perks, ensuring that tenants only pay one bill monthly, which covers their rent and utilities.
From an investor perspective, investing in Airbnb caters to short-term rental demands, often leading to fluctuating revenues due to seasonal trends and high turnover rates. Conversely, PadSplit focuses on long-term housing, providing a steadier income stream with lower turnover. The long-term model of PadSplit tends to attract a more stable tenant base, reducing vacancy rates and the operational hassles associated with frequent tenant turnover seen with platforms like Airbnb.
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December 5, 2023
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PadSplit Vs Airbnb: Which is More Beneficial for Real Estate Investors?
Airbnb’s business model is heavily influenced by seasonality, where the demand for rentals can skyrocket during peak tourist seasons and plummet during off-peak times. This fluctuation often leads to inconsistent income for property owners, making financial planning a challenge. Moreover, the high competition during peak seasons can drive prices down, impacting overall earnings. Unlike other rental platforms that offer a more steady income through long-term stays, Airbnb hosts may find themselves caught in a cycle of unpredictable revenue streams.
Both platforms have their merits, but PadSplit tends to attract long-term tenants, ensuring a consistent income stream. Moreover, the focus on community living often results in better care and maintenance of your property.
Using digital tools, property owners can have an easier time managing leases, finding tenants, and collecting rent compared to Airbnb. This modern approach contributes to their higher occupancy rates – resulting in a more promising return on investment for property owners who don’t want to worry about the seasonality of vacation rentals.
How Does PadSplit Hosting Work for Rental Property Owners?
Once your property is listed on PadSplit, you start earning as soon as members rent a room. You can rest easy as PadSplit also takes on the responsibility of running identity, income, background, and eviction checks for potential tenants – ensuring a safe environment for all occupants. Timely payment is encouraged, often leading to an improvement in their credit score for members. It’s a win-win situation; you enjoy a steady income while providing a much-needed service to the community.
What’s in it for PadSplit Hosts?
Being a PadSplit host opens an avenue of opportunities. By converting under-utilized spaces into additional bedrooms, hosts can drastically increase the overall earnings potential of their property.
In comparison to traditional rentals, a property listed on PadSplit could earn 2.5 times more. Below is a breakdown of what your ROI would look like for a 4-bed, 3-bath home in Orlando, Florida.*
*Disclaimer: The calculations provided in this blog post are based on market rates in Orlando, Florida and were obtained using PadSplit’s Earnings Calculator, which can be accessed here. These figures are illustrative and actual earnings may vary based on a multitude of factors including location, property type, and market conditions.
How to Buy a Rental Property for PadSplit
Buying a rental property with the intention of listing it on PadSplit can be a rewarding venture. However, it’s crucial to understand the steps involved first:
Research and Compliance
Understand the PadSplit requirements and ensure the property you’re eyeing complies with these standards. Dive into and research the different markets where PadSplit has gained a lot of traction – like Orlando, Dallas Fort Worth, Tampa, Houston, or Jacksonville to identify the best location for your investment.
Utilize tools like the PadSplit calculator to estimate your potential earnings and expenses. Consult with an experienced investment property real estate agent and mortgage lender like JVM Lending to secure the necessary financing for your rental property purchase.
NOTE: We are partnered with several highly successful agents in Florida and Texas who are extremely well-versed in all the nuances of finding the right property for a PadSplit – ask us for a personalized referral!
Opt for properties that accommodate multiple tenants as PadSplit operates on a room-rental model. Look for and consider properties in areas with a high demand for affordable housing.
Closing the Deal
Once you’ve found the perfect property, work with mortgage experts at JVM Lending to navigate the financing process seamlessly.
Venturing into the Room-Renting Realm: Getting Started
Stepping into the room-renting world with PadSplit is simplified with a structured onboarding process.
Once signed up, hosts are provided with resources and tools to find and underwrite a property. A PadSplit expert assists in finalizing pricing and getting the property listed. Below is a list of some benefits from hosting with PadSplit.
Property Owner/Investor Benefits
- Assistance with strategic property selection using their resources and tools.
- Access to off-market, turnkey, and filtered on-market properties.
- Use of PadSplit’s Earnings Calculator for data-driven decisions.
- “Quick listing” feature to build interest and a waitlist before a property goes live.
- A dedicated PadSplit expert for guidance from property selection to welcoming the first members.
- Listing on PadSplit for fast member move-ins with verified IDs, background, and eviction checks.
- End-to-end tools for successful shared housing business operations.
- Industry-leading billing and payments solutions, with PadSplit collecting 97% of all dues billed.
Your Next Steps
Diving into the world of room-renting is an exciting venture that promises not only financial returns but also a chance to contribute positively to the community. With the right guidance from JVM Lending on how to buy your rental property, you’re well on your way to becoming a part of this new wave in the rental property sphere.
Before you start to look at properties, we highly recommend engaging an experienced real estate agent in the area you are thinking of buying and getting pre-approved to know what purchase price you qualify for.
JVM Lending is partnered with several highly successful agents in Florida and Texas who are very well-versed in all the nuances of finding the right property for a PadSplit. Ask us for a personalized referral!
For any questions, contact JVM Lending at (855) 855-4491 or email [email protected].