The kitchen of Lily Lazarus’s home near Bellaire is sparkling: There’s not a smudge on her new stainless steel appliances, and the white counters and subway tile and gray cabinets look HGTV ready.
Everything here in this three-bedroom home is designed with a different kind of resident in mind: short-term renters.
Lazarus, like a growing number of Houston area residents, earns extra money renting out two homes to visitors through websites like Airbnb.com, VRBo.com and Home Away.com.
- Unlimited Digital Access for 99¢
- Read more articles like this by subscribing to the Houston Chronicle
When Lazarus divorced in 2010, she needed a career with flexibility because she had children who were 4 and 6 then. She got her real estate license and started selling homes. As she took clients through homes and urged them to see new potential, she saw some herself.
So she bought a home in Maplewood, fixed it up and started renting it out. It was so successful so quickly that she bought a second. With both constantly booked at $140 to $200 a night, she bought a third, which is under renovation now.
Not only does Lazarus increase her own income through Airbnb, she taps into a growing crop of potential hotel guests looking for lower-cost alternatives. What once was a way for people to earn a little side money is becoming an important part of their income.
People who didn’t like the prospects of being a landlord are embracing the idea of running a different kind of inn. Even the real estate market is affected — the garage apartment or guest house is more popular than ever — making home buying more accessible to those who can’t afford mortgage payments without the extra income.
Airbnb may be more popularly known, but it’s far from the only website that helps people manage home or room rentals. Airbnb lists whole-home rentals, vacation homes and extra bedrooms for those who don’t mind staying in a home when its owners are there, too. Sites like VRBO or Home Away — which are owned by the same company —only handle whole-home rentals.
In 2017, about 162,000 people booked lodging with 3,700 homeowners in Houston through Airbnb. On average, they earned about $3,700 a year doing it. That’s up from 92,000 bookings in 2016.
Adam Annen, a spokesman for VRBO and HomeAway, said that listings in the Houston area have increased by about 150 percent, and bookings have doubled in each of the past three years, with the biggest spike in 2016, when listings grew by 551 percent in anticipation of travelers coming for the 2017 Super Bowl. Through Airbnb alone, home and room rentals brought in $4 million from 8,200 visitors for Super Bowl week.
Annen said that Houston HomeAway homeowners earned an average of $33,062 last year, with the Midtown/Museum District sites getting the most — an average of $44,496.
Just as Lazarus is building rental revenue into her income base, Houstonian Sindi Sonnier is, too. Inspired by her daughter’s own rental management business in Arizona, Sonnier and her husband, Michael, rent their 3,300-square-foot Montrose townhome for $165 to $250 a night via Airbnb when they travel, and she has six other full-time rentals in Arizona she uses for the business she started herself. So far she’s only rented her Houston home a handful of times, but the Sonniers also have a home on Lake Houston, and when they’re done with Hurricane Harvey repairs, she may rent that out, too.
Their daughter started her own business managing vacation rentals for friends in Arizona and now operates the largest privately owned vacation management company in that state.
“As her company grew, we saw the opportunity too, and I started investing in vacation properties and renting them,” said Sonnier, a Louisiana native who has lived in the Houston area on and off for 22 years. “My daughter started traveling for work and rented her home, and it completely covered the cost of owning her home. … It was a great way for her to pay for a home and not be house poor.”
For both Lazarus and Sonnier, renters have been people in need of a place to stay that’s more affordable than a hotel. Some have traveled to the city for business, others for family events or short vacations.
Sonnier and Lazarus agreed that how their homes look are key to getting rented. Since potential renters see photos before they book, homeowners know they need to show a hotel-like experience: stylish decor, uncluttered rooms and amenities they’d have in a hotel. Lazarus said she buys new sheets and towels every two months and leaves water, a bottle of wine and some treats with a hand-written note for guests.
Local Realtors say the potential for rental income makes people look at the real estate market differently and makes home ownership a possibility for some.
Yvonne Bonner, a Realtor with Keller Williams Preferred, said her clients are all investment minded. But not only do they want to find property that will increase in value, they frequently inquire about its ability to generate income.
“If they’re first-time homebuyers, typically what they’re looking for is a single-family home with a garage apartment. Or, if it doesn’t have a garage apartment, there’s room that they can build one — some type of property with an income property in their backyard,” Bonner said.
That’s a big issue for millenials, she said, an age group not always financially prepared for homeownership.
One was Drew Collier, a 33-year-old Houstonian who bought his first property — a Heights home that had a garage apartment — for its income potential. More recently, Bonner helped him buy a Third Ward duplex. One half has a long-term renter, and the other half is listed on Airbnb.
Collier said that the rental income from the Heights home — now about $24,000 a year — paid for an extensive remodel of that home and earned enough money to buy the second property. His goal is to make $2,000 a month on the Airbnb listing — it runs $65-$100 a night — to cover the mortgage and maintenance.
While inside-the-Loop rentals may revolve around attending events or business travel, there are also vacation homes in Houston and Galveston. Some second-home buyers hope that their vacation homes can help pay for themselves.
“We have a listing under contract right now and one of their three questions is, ‘Do deed restrictions prevent short-term rentals?’” said Keith Owens, a Realtor with Better Homes and Gardens Real Estate Gary Green in Clear Lake. “The question always arises, particularly in waterfront and higher-end waterfront properties.”
Owens said that for waterfront property or with access to water, about half of the potential buyers inquire about the ability to rent the home, and the queries have increased mostly in the past year.
“Even my wife and I have looked at a second home, a lake home a couple hours away, maybe on Lake Livingston or Crockett, and that is one of the things we’ve considered as well. Will they allow it and how much could we get for it? It’s more or less income driven,” Owens said. “In some cases it doesn’t just pay the mortgage, it makes you money.”