I currently am working as an engineer, and have a strong interest in real estate investing. I am currently living very close to Philadelphia in New Jersey, and would like to purchase a home (potentially a duplex or triplex) to airbnb either in Philadelphia or New Jersey. Does anyone have any suggestions or tips that may not be self explanatory to get started?
Location. Location. Location. I know it’s boring to hear it again and from everyone, but it’s true.
Your Airbnb strategy has to work even without a short term rental plan. Research the area, demographics, jobs, companies moving in, Starbucks and malls, restaurants, hospitals, schools and all other life amenities near by.
Don’t invest in MSAs under 250k population. You’re looking for growth.
Id look into Airbnb expenses as well. Not a ton of biggerpockets members do Airbnb as far as I know, myself included.. but I do know there are some very different expenses, most likely due to the very high turnover you get.
As Ken mentioned, location is everything, especially with Airbnb.
@Matt Loewenstein I found this info for Philly. Looks like you can't have more than 3 unrelated guests staying in a home at any one time. This could be a real deal breaker if this law is enforced and will limit your ability to make money. Also make sure you factor in 8.5% hotel tax as well as any applicable state taxes.
Almost all major cities, including Philly, can make very profitable AirBnB rentals. I would suggest looking at AirBnB DNA for more info and to set your expectations for gross rent and avg. expenses.
Hosting a vacation rental is much, much more involved than being a regular landlord. If doing it yourself, i estimate it takes roughly 2-4 hours per week per rental to manage the app, answer guest questions, arrange cleaners and maintenance items, etc.
Get good systems early and hire a GREAT, responsible cleaner! I have three rentals in DC so they are geographically close cities. Feel free to shoot me a msg for more specific info.
I manage Airbnb's myself and everyone is correct here so far.
Make sure it's legal
Location is key
And you will have extra costs not associated with regular rentals. All utilities, replacing tons of towels, etc...
How do you insure these properties? I'm in the process of buying a Duplex to live in and airbnb the other side and I'm having trouble getting an insurance policy that will allow STR.
I’m from Chicago and I started renting out my rooms on airbnb to see how it would do. Luckily, for me, I lived in a hot location, close to Michelin starred restaurants and nice bars, with easy access to transportation and downtown Chicago.
So yes, first thing would be (as some mentioned above) location, location, location. Is the town (or block) your place is in a very desired, touristy location? Or, is it sought after for other reasons (college campuses are nearby, close to airport, etc)?
Second, I would make sure to know your local laws and ordinances. A lot of cities are cracking down on airbnb and some won’t allow short-term rentals unless you live in the unit yourself.
Third, I would make sure your numbers are on point. Make sure to include cleaning expenses, taxes, percentage cut to airbnb, etc in all of your calculations.
Hope this helps!