Podcast episode (Tim Hubbard) introducing PadSplit, a rent-by-the-room platform that lets hosts list individual rooms to increase revenue and reduce vacancy risk. Tim explains economic drivers (rising rents, inflation) making shared housing attractive, outlines PadSplit features (background checks, tenant support, 3D tours, vendor network), suitable markets (college towns, dense urban areas, regulated STR markets), and basic steps to get started.
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Welcome back to the show. I'm happy you're 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 Pad 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 plus, but also not have a crazy amount of work to do. So I wanna jump through just what it is. Why I think it's gonna 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 into the actual details though, I wanna 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 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 going to be earning $0. So. So that's one nice benefit to this model. It's sort of like owning a multifamily 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 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 going to 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. And 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 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 three months or however long it happens to be. So there's some obvious benefits to this model. It's definitely growing and, and 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 renting 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 and 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. 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@str riches.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 cost 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 takeaways. If you're going to be there, I'd love to catch up. You can contact us again@striches.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. 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 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.
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