Starting Out on a Vacation Rental Investment Idea

Starting Out on a Vacation Rental Investment Idea

Brookline, MA · Member since 2017 · 49 posts · 22 votes

Found the right forum for me because I am definitely just "starting out!" 


Here's my situation: age 36 with a two family house in an extremely expensive suburb of Boston. I bought it from family members at a very steep discount so I only owe $189,000 on it at the moment at 3.5%. I live in the top floor and rent out the bottom floor. Unfortunately (or fortunately, there is some less headache upside) I rent the bottom two bedroom out to a family member for $1200/month. That situation will sometime change in the future and I will be able to update that apartment (needs a lot of work) and rent for around $2000. The house appraises at about $600,000 but would be worth more on the market because of the desirability of the location. I work a full time job - that's RE/financial picture at the moment.

The reason why I'm here is I met someone who owned a house in nearby New Hampshire. A log cabin close to skiing areas. He would use it himself here and there but mainly rented it on Airbnb. He had a property manager do cleanings and key drops and would just go up there somewhat regularly to supply toilet paper and other goods, since it was cheaper than going through the property management company for those things. He was cash flowing a few hundred dollars a month this way. Sounded like a great idea to me and it's been in the back of my head for a while.

So I have researched properties and Airbnb pricing and the NH laws for this and it seems quite doable. I am currently focusing on property management companies to see who is where and which ones are best. 

Does anyone here have Airbnb experience? I have listened to the most recent BP podcast on it, which was awesome. 

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  • Investor · Stratham, NH · Member since 2015 · 43 posts · 16 votes
    9y
    Yes. Been using Homeaway for last 15 years. And Airbnb for last year. Would be happy to share my experiences.
  • Investor · Campton, NH · Member since 2010 · 286 posts · 144 votes
    9y

    I just sold a nice 3brm log home for some clients in Bath NH (kinda over the mountain from Cannon...) for $185,000 and they had been grossing $20k per year with HomeAway.com - their place was spotless and you couldn't tell it was a rental property. The owners used a local husband and wife team to handle cleanings and repairs and of course, bookings were done on the website, although I think they spoke with each tenant before committing to them. I believe Air BNB take a smaller % of the rent amount. My wife and I are going to see if we can get some neat cabins to do this with. Good luck Julia Ann!  :)

  • Brookline, MA · Member since 2017 · 49 posts · 22 votes
    9y

    Thanks all.

    @Richard Dale-Mesaros Interesting, but what was the cash flow on that gross, I wonder? 

  • Investor · Campton, NH · Member since 2010 · 286 posts · 144 votes
    9y

    This was a second home for them, Julia Ann, so they used it themselves for multiple days - their business model wouldn't be the same as an investor renting it exclusively for Air BNB etc. What was palatable for them margin-wise might be different than what you can tolerate so just make sure you're including everything in your expenses AND perhaps set aside funds to cover larger eventualities like a new boiler or roof repairs, as you would with any rental property, ideally.

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