Duplex - short term rental

8 Replies

Frankly I don't think that is as important as ensuring there is demand for short-term rentals in your area, and the time/maintenance needed in order to succeed in that business.

I assume you mean AirBNB, so how do you know the local market supports consistent and constant rentals? How do you plan on turning over the units (and doing so quickly)?


Also, to wholly answer your question, what kind of short term rentals do you expect? Are you near a business of some kind (if so, a 1BR is easier to rent). Is it a vacation rental? Do you expect couples, families, individuals? That'll dictate what kind of people rent from you and what will "sell."

Frankly I'd rather get someone in long-term for a year lease on a duplex.

@Olivia DeMarco

I see short term rental no different than long term in terms of market analysis. You can see who your competitors are,what they offer and how much they charge for that on portals like Airbnb. 

By looking at the reviews you can also have a sense of what type of guests they have.

Location is the key. I know my guests are young professionals who come for work or entertainment throughout the year. My properties do accommodate families with kids as well. Above all, they want a well located, clean and comfortable place place to stay.

Best of luck. 

Andresa

@Olivia DeMarco Before building/buying, I always visit with my realtor and ask what he can rent and the price. He tells me the current market and upcoming expectations. Currently, we are building a 5 plex and his input and his brokers input helped determine not only the design, but interior expectations.
Originally posted by @Olivia DeMarco :

Hi All, 

My boyfriend and I are looking into purchasing a duplex for short term rentals. Is a 2 bed 2 bath likely to rent for higher than a 2 bed 1 bath?

The Air BnB investors we work with have been getting almost twice what they would have gotten for long term rentals.  When they told me that, I called BS, but it was true when I looked at the Air BnB transaction histories compared to 1007 comp rent schedules for the same properties.

Be careful though because some municipalities are getting serious push back from local and national hotel chains who are losing market share.  Also, most lending has not caught up to the technology yet, so finding a lender will be dicey.

Best of luck

Stephanie 

@Joe P. The reason we are looking more so into AirBNB is because we plan to stay in one bedroom on one side of the duplex and AirBNB out all other rooms. My boyfriend is a travel Occupational Therapist and I work remotely, and we have been staying in an AirBNB in Sacramento. AirBNB is very popular here, and all the rooms in the house we currently stay in are always rented out on AirBNB, mostly to medical travelers for about 3 months at a time. Since we are here for a year we thought it would make sense to invest in our own property and do the same thing. We share a bathroom where we stay right now, but just looking on AirBNB it looks like when a private bedroom and bathroom are available, the prices are higher, which is why I was thinking we should look into 2 bed 2 bath as opposed to 2 bed 1 bath. 

People in CA often have a month to month rental lease. That does not mean the tenants will want to move out. Only those in between homes have an urge to stay for a few months. If it is Airbnb that is another story.


@Olivia DeMarco If I were you, since you plan to live on-site and, I assume, manage the Airbnb yourself, I’d look for a 2/2 where you could easily turn it into 2 1/1s. I have a property that’s a 2/1 up top and a 2/2 on bottom. Luckily, each bedroom had its own bath and separate entrance so I turned the bottom into 2 1/1s. I make more money with those 2 1/1s despite neither having kitchens, than I do with the nicer 2/1 with a kitchen up top. In your case, 1 of your units could be a 1/1 with a kitchen. The other could be a 1/1 “hotel-style” (i.e. without a kitchen) or you could put a little kitchenette in there. Good luck, whatever you decide!

@Olivia DeMarco sounds like you have a good handle on the market. I would imagine in general, an extra bathroom makes sense both for you and for the incoming person. Personally, I don't like to share a bathroom with someone. Someone younger than me may have no problem with it. I guess it depends on the market.


Do you know other investors in your area operating a property in a similar manner? I like the idea of the house hack, which it sounds like you are doing, and I'm wondering if a local group may be able to answer your questions.

Ultimately, lets say a house with 1 bath costs 200k, and another house with 2 baths costs 250k. Can you charge more for two baths, and can you get more volume with 2 baths? And how long will it take you to make your money back on one bath versus two? And can you live with one, or can you live with two? Both have their advantages and drawbacks. If this is purely a financial decision, then see what the cost/income analysis for one versus two. If you can't get more money, won't get more volume, and it'll cost 100k more, I think the answer is very clear.