In case you are wondering about the timeliness of this post, I am sitting in Dallas, TX while writing this post in my father in law’s condo; soon to be a Super Bowl rental. The Super Bowl is scheduled to be played here in Dallas this Football season (which is early next year) at the Cowboys stadium in Arlington, about 15 minutes from where I am right now.
Whether you are an American football fan or not, I trust you know what the Super Bowl is? It is arguably the biggest sporting event in the United States. So big that people fly in from all corners of the country (and even parts of the world) and spend thousands of dollars over Super Bowl weekend, which is the weekend before the big game.
This trend or “tradition” has opened up a window of opportunity for homeowners who live near the Super Bowl destinations. The destination changes every year and is usually decided well ahead of time, even years ahead. The game is usually held somewhere with a warmer climate so visitors can enjoy the weather, tourist attractions as well as the Super Bowl festivities that start days before the game leading up to it. Florida and Arizona are common sites for example.
Because the event is held only once a year, the scarcity factor makes it the place to be at for everyone from college students to executives of fortune 500 companies. Unfortunately for those that want to attend, there are never enough hotels around to accommodate for the demand.
Often times, attendees book hotels in nearby states and then drive to the event. But even then, the demand is just too overwhelming. Hotels are booked out months, and sometimes years ahead of time. On the brighter side of things however, people that live near the event have realized the opportunity and recently have been renting out their homes to visitors flying into town to participate in the events and watch the game. Thus they turn their properties into a Super Bowl Rental!
How much can you rent your home for over Super Bowl weekend? Up to $35,000 per night! Yes that number is not an exaggeration. In fact I am positive the number is much higher than that, but $35k is the highest I have seen it go for. Super Bowl Rentals are mostly for the entire Super Bowl week, while some are just for the weekend.
I am sure you are wondering who dishes out the big bucks “just to watch one game”. Like I said, attending a Super Bowl game is every fan’s dream, whether a student or an executive.
Research has shown that company executives prefer family type settings when attending the Super Bowl. Often times, executives fly out their entire family to enjoy Super Bowl week. They either pay for it personally, or their companies pick up the tab. Either way, it’s Christmas nonetheless for the homeowner who rents their place out.
Executives are reputable for taking good care of a Super Bowl rental (unless they are the routy singles who fly in all their buddies and girlfriends), therefore you can be assured your place will be taken care off.
Many of the renters I have come across don’t seem to be too demanding. However, if you want top dollar for your Super Bowl rental, you typically need to have and offer certain amenities.
For the most part however, renters are mostly concerned about location and the proximity to the events and the game. They prefer a clean and safe environment where they can bring their families and not have to worry about anything but the festivities.
I am sure I have missed quite a bit. But don’t be discouraged if your Super Bowl rental doesn’t offer any one of these. If you have #1 covered, I can almost guarantee that you will be successful renting your place out. If you have the rest, you will be able to demand top dollar and likely rent your place out to a bigger profile individual. You might even get some celebrities to stay at your place, you just never know.
You can hire individuals to work these jobs easily for the week, or you can do it yourself if you plan to stick around town. I typically fly out and visit friends and family, and watch the game on a large HD TV somewhere. I played three sports in high school. I love watching and playing sports, especially Football, but when then Super Bowl is hosted in my town, I prefer taking the cash over participating in the event.
Back in 2006, the City of Detroit’s Mayor (Good Ole Kwame) and the Ford Family (Majority shareholders of the Ford Motor Company) “lobbied” and convinced the NFL to host the Super Bowl in Mo-Town – the wonderful city of Detroit. Yes – February is arguably the coldest month of the year in Michigan where you not only have snow fall, but literally hard chunks of ice dropping from the sky. It is bitter cold and extremely painful (it can be at least).
I have a luxury condo that I had bought back in 2005 very close to the downtown area and sports district where Ford Field, Joe Louis Arena (where the Red Wings play hockey) and Comerica Park (where the Tigers play baseball) are. When the Super Bowl in Detroit was announced, I decided to test the market and put my condo up for rent as a Super Bowl rental.
The condo is not very large at all. It is a single studio with a bathroom, kitchen, laundry room and some closet space. It is in a high rise that is secured with 24/7 security personnel and a secured entrance. The building has an attached parking garage that is covered and also has 24/7 security surveillance. The building floors are marble and the interior of the lobby is filled with nice looking sculptures, water fountains and a beautiful high rising elegant ceiling.
How much do you think this Super Bowl rental fetched for me? I entertained several offers and ended up renting it out to a Honey Well executive in his 50s and his young girlfriend. We settled at $2,000 per night for 4 nights, with one night’s rent as security deposit which was mailed to me along with the contract 5 months before Super Bowl weekend.
They had rented their own car and didn’t really need anything else from me. But even then, I made sure the unit was professionally cleaned, sanitized and stocked up with goodies they’d be interested in. $8,000 for 4 nights and a little bit of sweat setting the gig up – not bad 😉
Similarly, I took advantage of renting my unit out during three other occasions. The previous year (2005), the Major League Baseball All Star Game was held in Detroit at Comerica park. In 2009 and sometime earlier in the mid-2000s, rounds of the NCAA tournament weekend were also held in Michigan.
When it rains, it pours. Seeing as the Super Bowl is in Dallas, Texas this year, I have already spoken to my wife about renting out her Father’s condo located about 15 minutes away from the Cowboys stadium in an affluent area.
Now for the tactical stuff, how does this actually work and how can you take advantage of this opportunity. For you to be able to take advantage of it, whether or not you are a fan of American Football, you need to find out where the next few Super Bowls will be held. This is easy information to find online.
If the event is coming near you, talk to your family or whoever you live with and agree on renting your place out. The year of the event, start advertising your place on Craigslist as well as several other websites that do nothing but this. There are advantages and disadvantages to going either route, but in the end you still come out a winner.
If you go the Craigslist route, listing your Super Bowl rental won’t cost you a dime. However, you need to ensure you renew your listing every 30 days or it will expire. Further, you need to think carefully about your marketing message and add title to attract searchers to not only find it but also click on it and read through.
Once they read through, you need to ensure you have some nice looking images of your place and the surrounding environment. Include all the features and amenities you have to offer, as well as the advantages of staying at your place. You essentially need to do everything a marketing or PR firm would do. Craigslist will also typically draw the sub A-list profile tenants who might not be able and / or willing to pay the price you want.
If you decide to let professionals handle your business, you have two choices. You can either pay companies / websites to post your Super Bowl rental add, or you can go with a company that does all the marketing legwork for you and rents your property out on your behalf.
The earlier route is similar to Craigslist, except now you are expanding your reach to a bigger population. For example, if you were to pay 5 websites $89 each to post your Super Bowl rental add, your property will be displayed on all 5 websites. This means more search engine traffic from web searchers and better chances of getting found. However, you still have to design your own ad and provide your own images.
If you decide to go the later route, be ready to pony up some cash upfront. Companies will charge you upfront for the marketing and listing costs involved in advertising your property. For example, they will send some professional photographers to your place to take pictures. They will engage in various marketing campaigns to get your Super Bowl rental the exposure it needs.
The biggest advantage you will have however by going with such companies is that they already have databases filled with qualified leads who are ready, willing and able to rent properties at a premium to attend high profile sporting events. I’ve seen this cost anywhere from $800-$1,800. These companies also charge a commission on your Super Bowl rental. I have seen this range anywhere from 8% to 15%.
Is paying all that money worth it? Well, if you have a 4 bedroom, 2,500 square foot home within 15 miles of the big event and can fetch $6,000-$10,000 per night for 5 nights, you tell me? I’ve already been contacted by one such company for my Father in Law’s condo. They have estimated that the property can fetch $3,000 per night for 5 nights. So if my wife and I decided to go with these guys, we can expect to get $15,000 (5 nights x $3k per night) – $1,100 (up front fees) – $1,650 (11% commission) = $12,250.
That is a net amount of $2,450 per night for 5 nights. At this point I am debating whether I want to rent it out myself like I did the last few times around in Detroit, or should I let the pros handle it. I am leaning toward doing it myself because I know I can do it and keep more of the money as well.
I also have some contracts that have been reviewed and approved by licensed attorneys so I am pretty confident about this kinds of a transaction at this point. I figured I can let my wife take all the pictures and video clips since she loves the camera anyway.
I plan on uploading a house tour video clip on YouTube as well. Another great idea to market your Super Bowl rental. I do this for all my residential real estate properties as well and it works like a charm.
If you do not have the legal background, you hire a lawyer to draft your lease contract. It will cost you between $200-500 but it’s well worth it. An alternative is to use Socrates, an online legal service company that provides custom made contracts for all your needs. This is an excellent company and one that I have used over and over again for many purposes. I highly recommend them for all your legal documentation needs.
I am sure right about now you are wondering what the tax implications are by renting your home out for just a handful of days. As you may have guessed, there is a little bit of bad news to this deal. You are obligated to report and pay taxes on your Super Bowl rental income activity.
The good news is that you can also deduct the expenses you incurred to rent your property out. For example, if you made $15,000 from renting your property out, and incurred $3,000 in commissions, photography, marketing and advertising costs, then you only pay tax on the difference of $12,000.
If you want to put in the time it takes, the IRS allows you to deduct all kinds of other stuff from your taxable income. For example, you can deduct a prorated portion of the following: interest expense on your mortgage, property taxes, insurance, maintenance, utilities and depreciation.
I suggest you hire a CPA the year you do this, or you can file your taxes yourself using Turbo Tax Premier. I like this version of the software because it does a great job walking you through simple questions that will ensure you benefit as much as possible from the rental of your home. Rental income and expenses are generally reported on Form 1040, Schedule E.
This post is not meant to provide any free tax or financial planning advice. I am speaking solely from my knowledge and experiences. As always, I suggest you hire and consult a professional before making any decisions and implementing your actions. The Super Bowl is here to stay there is no doubt in that.
And although the Super Bowl is arguably the single biggest sporting event in the United States, similarly, there are several other events throughout the year that bring in outsiders who are willing to pay the big bucks for a nice place of accommodation. Golf and tennis tournaments are a couple examples of this.
So whether you are a fan or not, by staying up to date with the world of sports, you can capitalize on some very nice rental opportunities, especially a Super Bowl rental.
Readers: Can you speak from personal experience? Do you know anyone who has capitalized on something similar?