I am excited to announce that I'm closing on my second house hack tomorrow! It is a side by side duplex that I originally analyzed with a long term rental. The numbers are pretty good and I'll be living in the middle of the city for a very cheap price. However, I was thinking about doing Airbnb on the other side instead. I've never done Airbnb, and under normal circumstances (without COVID), I know that New Orleans would be a great place to do it. But as we all know, there is a pandemic still going on and a lot of New Orleans is still shut down. Does anyone know if this area is still profitable for the short term rental strategy? Or should I just stick to doing a long term rental? Any suggestions would help, thanks!
Hi Essien - Congrats on your purchase! Airbnb is great for cash flow and living for free (or near free) is an amazing superpower. The ability to not pay for housing (~40% of monthly income) really frees you up to pursue new opportunities and take more risks.
On NOLA, we analyzed the market 18 months ago and it was very attractive. We had an investment in Domio, which had an amazing Airbnb/Hotel - the Baronne St location. However, there are (were) a number of new regulations and restrictions on short term rentals which dissuaded us from investing in the market. We decided to invest in the Smoky Mountains instead (Gatlinburg, Pigeon Forge, Severville).
Best of luck!
@Michael C. Thanks for your feedback! I was going to pay for Airdna and Mashvisor to also help run the numbers. Do you have an opinion on using these tools for analysis?
@Essien Benjamin good luck with your REI journey!
Hello Essien, I have been running my Airbnb in New Orleans through the pandemic and I can confirm returns are way down. With that said, there has been an uptick in bookings and the average price per night. With the vaccine deployment in progress the optimism is high for travel to return in a big way. But be aware, when it comes to vacation rentals you have to be very strategic to ensure you are getting the highest dollar amount and low vacancy. If you do decide to do a vacation rental, let me know, I can share strategies I have developed throughout the years.
Those tools are great for an initial first pass. I've only used AirDNA but not Mashvisor, so I can't speak to their quality. I would recommend using Keydata given they use first party data (not scraped data) for their rental projections. First party data is inherently more accurate although your dataset is usually smaller. I found it to be better when we underwrite deals.
I hope this helps!
@Dmitriy Fomichenko Thank you!
@Beau Guidry Definitely, thank you for the feedback!
@Michael C. This does help, thank you very much. I'll check out Keydata!
Hi Essien. You will almost certainly do better with STR than a long term renter. But it will be considerably more work. If you're living next door though it's very easy to manage. In order to get your accessory permit you'll need a homestead exemption. Good luck!
@Stephen E. Thank you Stephen! How exactly do I get a "Homestead Exemption"?
@Michael Sgandurra Thanks again man!