Athens, GA · Member since 2021 · 9 posts · 3 votes
Hey everyone. I am eager as hell for my first chance to start investing in real-estate. I have many thoughts and questions. Thank you so much for sharing your thoughts, advice, opinions, etc. I really appreciate it!
I would love to begin my journey with investing in properties for Airbnb & Vrbo. I know this can be a lucrative option for sure which is why I’d love to start this way so I can take my earnings and invest into other and into rentals possibly.
Does anyone prefer Airbnb over Vrbo or vice versa?
Do you guys think the market for short term vacation properties will ever go out of style in the sense of laws being created against them (being phased out sorta)?
How much do you think a first time young person who has never bought a home would need to save for a decent property return investment?
Can I use an FHA Loan for one of these properties?
Do you think it’s smart to mix my portfolio with short term vacation rentals as well as more stable long term rentals?
@Jessica Wilson I’d be happy to talk further with you. I’m an investor and manager of AirBNB and VRBO STRs. Feel free to DM me if you’d like to setup a call for advice and help getting started.
@Jessica Wilson I’d be happy to talk further with you. I’m an investor and manager of AirBNB and VRBO STRs. Feel free to DM me if you’d like to setup a call for advice and help getting started.
Congrats to you for your ambition! If you are looking to connect with someone for some guidance or advice, feel free to reach out. I also recommend you read this article I wrote for Bigger Pockets titled How to Invest in Real Estate Before Turning 21. Even if you're already 21 or older, it has some great advice for getting started. Once you've read it, let me know your thoughts and if you have any questions. I am a high school teacher in Colorado and I am always looking to help young people get started in real estate investing or help in any way I can. Let me know if you want to chat sometime. https://www.biggerpockets.com/
@Dan Sheeks thank you so much for responding, great article! I look forward to diving into your blog more and will definitely recommend to others interested. I would love to connect!
@Jessica Wilson the first thing you need to look out for if you want to do Airbnb or STR investing is how the area is trending toward favorability of STR. Is it a town trying to outlaw and get to the 30-day minimum or is it more of a vacation area that is built on tourism and welcomes the STR as a business opportunity for the town. The one tip I give every Airbnb newbie is this, and when they don't listen, they regret it:
Make sure everything inside of the house is written out for dummies. Everything. Make sure everything is in the Airbnb listing, for dummies. Everything. Then, if anyone starts asking questions, decline the reservation. The people who ask questions before they book when all of the information is in the house are the same people who will call you 5 minutes into the "vacation" saying the grill doesn't work when the instructions are hanging from it. Hope that helps.
@Jonathan Greene That is extremely helpful information, thank you for your advice! I would definitely want to develop a system where I am confident in the guests I would allow to stay at my rentals.
STR can be a great way to start investing. It's how I got in to and it changed my life from day one. I thought you asked some great questions, so I listed them below with my answers. I hope it's helpful!
Does anyone prefer Airbnb over Vrbo or vice versa?
It's market dependent, and it also depends on the type of guest your property will attract. In general I prefer Airbnb. I generally recommend trying both, at least at first.
Do you guys think the market for short term vacation properties will ever go out of style in the sense of laws being created against them (being phased out sorta)?
Again, very market dependent. Will it go out of style? No, probably not. As far as the legality of it, that is something you'll need to learn and know in detail for your market. If your municipalities haven't landed on legal parameters yet, then it's something you'll need to pay close attention to, and always have a few backup plans if the laws change and you can't operate as a STR anymore.
How much do you think a first time young person who has never bought a home would need to save for a decent property return investment?
If you're buying a home to live in and renting out the rooms, you only need enough for 3.5-5% down plus money to furnish. If you buy as an investment property (not living there) you'll need 25% down plus furnishings. Of course the cost of furnishings could vary dramatically, as I'm sure you know being an interior designer. I had a friend (also a designer) furnish her entire vacation rental for a couple thousand dollars, buying everything at thrift stores. The place had a cool, vintage vibe.
If you really want to get your feet wet right away, without risking a bunch of your own cash, then you may want to try airbnb arbitrage. Essentially you rent a home or apartment, furnish it, and sublet on airbnb. You'll need to be 100% transparent with the owner and probably either pay him higher rent or cut him in on the profits. This is how I got in to the business, starting with only a $1000 deposit and started netting a LOT of money from day one. After 2 years we had enough to put 25% down on our next property. I'm happy to discuss airbnb arbitrage further, or you can search the forums here and find many others doing it successfully, even at large scale. I personally prefer to use it as a starting point with the goal to eventually own the properties
Can I use an FHA Loan for one of these properties?
If you're living it it, yes. It''s called House Hacking and it's one of the most effective ways to get started in real estate investing. Either rent out the rooms individually, buy a duplex, triplex, or fourplex, or a house with a mother-in-law. There are many ways to do this. Just yesterday I saw a gorgeous $1.1m lakefront home for sale in my market (extremely expensive market) that had two airbnb cottages in addition to the main home. Since the cottages combined would bring in around $7k/mo you could essentially live for free on day one.
Do you think it’s smart to mix my portfolio with short term vacation rentals as well as more stable long term rentals?
It all depends on your goals. Personally, I do have some LTR's because I wanted to balance out the risk a bit. However, I should probably convert them to STR and I'd make a lot more money. I've been doing this for several years now and feel pretty confident I can continue with no problems, even if the demand slows down.
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I hope those answers were helpful. I'll also add:
The incredible thing about vacation rentals is creativity gets rewarded. I am a designer as well (furniture designer) and I always look at the vacation rental as an opportunity to design an incredible experience for the guest. Of course you want to make the place beautiful and comfortable, but when you start thinking "how can I make the guests experience exceptional and memorable" then you start considering every little detail. Currently my partner and I focus on cabins, and our prices are 300% higher than every other vacation rental in our area, and we're 100% booked with a waiting list (it was this way before Covid). So, more than any other area in real estate, thoughtful design has the opportunity to unlock exponential financial reward.
Does anyone prefer Airbnb over Vrbo or vice versa?
They both are consider Online Travel Agencies. And there are hundreds more like them, but they are two of the largest. You'll find that they attract slightly different audiences, and that varies by location.
What's important is that you know you can uses different marketing tactics to attract different audiences. That's the name of the game.
Do you guys think the market for short term vacation properties will ever go out of style in the sense of laws being created against them (being phased out sorta)?
I see the lines between extended stay rentals ("LONG" short term rentals) blurring with traditional rentals. Just like over in Europe, furnished rentals will be normal.
I specialize in +30 day furnished rentals because they are just as profitable as traditional Airbnbs but they have the added benefits of requiring less time to manage, less chance of parties/undesirable stuff, and they are typically not regulated by city laws.
Essential Workers and Digital Nomads love extended stay rentals. They are recession and pandemic-proof. They aren't going to be phased out any time soon... just the opposite.
How much do you think a first time young person who has never bought a home would need to save for a decent property return investment?
If you're going to purchase, then you need to follow the traditional math to make sure that you can earn a positive cashflow based on traditional rental market rents. Don't buy based on projected Airbnb income... otherwise you'll overpay. You always want to be in position to make a profit operating as traditional rental.
If you consider rental arbitrage, which is renting someone else's rental, furnishing it, and then renting it out as a furnished rental... then you can get started for less than $10,000.
Do you think it’s smart to mix my portfolio with short term vacation rentals as well as more stable long term rentals?
@Andy Whitcomb I have never aspired to be like someone more!! Thank you so much for commenting and allowing me see a walking version of my future dreams! I hope all goes well with you from here on out and honestly, I would love to see what you’ve created from your properties!
