The biggest reason I have not done Airbnb.
Most Popular Reply
Stephen DoyonPro Member
Investor · Norway, ME · Member since 2013 · 27 posts · 16 votesHi Joe!
You'd be surprised how inexpensive it can be to furnish a house as a short-term rental. My wife and I purchased a lake front home and operated it as a short-term rental for about 18 months and realized a total net profit of over $30k during that time before we sold it to my wife's sister to use as her primary residence. It cost us about 10k to furnish and outfit inside and out, right down to the silverware, towels and dock system. While we enjoyed the positive cash flow, the amount of time we spent on this one property far outweighed the other long-term rentals we owned. While I enjoyed interacting with guests and some of the unique aspects of short-term rental operation, I prefer the passivity of our long-term portfolio for sure. Hope this helps.
28 Replies
- 6yStephen DoyonPro MemberInvestor · Norway, ME · Member since 2013 · 27 posts · 16 votes
Hi Joe!
You'd be surprised how inexpensive it can be to furnish a house as a short-term rental. My wife and I purchased a lake front home and operated it as a short-term rental for about 18 months and realized a total net profit of over $30k during that time before we sold it to my wife's sister to use as her primary residence. It cost us about 10k to furnish and outfit inside and out, right down to the silverware, towels and dock system. While we enjoyed the positive cash flow, the amount of time we spent on this one property far outweighed the other long-term rentals we owned. While I enjoyed interacting with guests and some of the unique aspects of short-term rental operation, I prefer the passivity of our long-term portfolio for sure. Hope this helps.
My concern about it is more related to the regulations. Many areas have shown considerable willingness and interest in regulating short term rentals out of business. Or at least making it impossible to scale. Some investors try to dodge the regulations and when they get caught, it's not pretty.
@Stephen Doyon The second biggest reason I have not done it yet is, because I did not want to self manage. So the reason why you sold your property to a family member and got out of the short term rental is due to time demands. That is the reason number two for me. I had someone that was going to manage one 3200 square-foot house house for me near six flags and sea world area in San Antonio Texas. I figured I would need to spend 18 K plus on that size of a house to furnish it. The main person that would of made money each year would be the property manager.
- Real Estate Agent · San Antonio, TX · Member since 2017 · 814 posts · 466 votes6y
I have a front beach property, and I rent it long term. Main reason for not to do an AirBnB is the added coordination and maintenance (lack of availability of trusted people for maintenance). Plus added "short term" taxes where my property is... I may give it a try next time after the current tenant leaves if I find some good housekeeping.
I ran the numbers and it looks good if I even have 50% vacancy, is just an added problem to my very busy life right now.
- Investor · Durham · Member since 2017 · 589 posts · 251 votes6y
It really comes down to your long term strategy. Short term rentals can blast serious cash flow but require a lot of upkeep. Perhaps spend time banking the money and buy some long term investments with it.
- Real Estate Broker · Portland, OR · Member since 2019 · 4k+ posts · 2k+ votes6y
Has anyone else ran into this dilemma? Is there a company that would furnish the Airbnb and allow the opportunity to be paid back overtime?
Well, you can rent furniture, but the prices are pretty dear.
My wife loves scouring FB market (so far the best), Craigs and I can kinda fix up stuff. Also try the furniture rental place - They do sell returns cheap that are in pretty good shape.
I only have one VRBO, so don't know if I have all day to go shopping, but my wife enjoys getting stuff cheap.
- 6yAvery CarlBusiness MemberReal Estate Agent · USA · Member since 2016 · 909 posts · 1k+ votes
@Steve Morris Clearbanc will do a small business loan to finance the furnishings. But it sounds like you have a lot of analysis to do before you get to that point. The market it sounds like you're thinking about buying in may not be the best suited for an STR business.
- Real Estate Broker · Portland, OR · Member since 2019 · 4k+ posts · 2k+ votes6y
Clearbanc will do a small business loan to finance the furnishings.
Well, that's nice, but you're missing the point, it's expensive if you put it on Clearbanc or a credit card or pay cash if you want to stock a rental with new furniture (something I wouldn't do).
He's trying to do this so it's affordable.
- Property Manager · Kansas City, MO · Member since 2018 · 280 posts · 221 votes6y
@Joe S. It boils down to numbers and the ROI. Yes, you need to put cash up front for furnishings but if your house is in a desirable area and you have a great team managing it, your returns will be higher than long term rentals at the end of the year. It should pay its investment back and then profit a few thousand.
Originally posted by @Sofia Sharkey:
@Joe S. It boils down to numbers and the ROI. Yes, you need to put cash up front for furnishings but if your house is in a desirable area and you have a great team managing it, your returns will be higher than long term rentals at the end of the year. It should pay its investment back and then profit a few thousand.
Do you have short term rentals? How did you find a good property manager? So are you saying that I would make all my furnishing investment back the first year?
- Property Manager · Kansas City, MO · Member since 2018 · 280 posts · 221 votes6y
@Joe S. Yes I have 12 short term rentals, I started my own str property management company, and yes I’ve made all the return back and profited in year one. I focus on excellent locations and keeping an eye on expenses. It’s not difficult if you are in a desirable location, just too many hosts go all out and don’t know how to price their places correctly.
- Investor · Raleigh, NC · Member since 2019 · 314 posts · 280 votes6y
@Joe S. I self manage my STRs and they do very well. Furnishing them was part of my "rehab" budget when I bought them. As many have said, location & regulations are the key items to look at , but if done right, they do very well. A recommendation would be to browse the Short Term Rental forums on BP and you'll see all sorts of successful plans and methods.
Originally posted by @Sofia Sharkey:
@Joe S. Yes I have 12 short term rentals, I started my own str property management company, and yes I’ve made all the return back and profited in year one. I focus on excellent locations and keeping an eye on expenses. It’s not difficult if you are in a desirable location, just too many hosts go all out and don’t know how to price their places correctly.
Do you think you would be profitable with your 12 short term rentals if someone else manage them for you? If I could find someone in San Antonio area that could manage the properties for me I would definitely be open to that. The challenge the PM charge so much that they would be the only ones that really made any money. I have so many things going that being a good host sounds like an extra job. LOL
when you are in a position that you have outlined, I would be vey cautious of putting all my "risk" in the hands of an unknown to you property manager.
While there are good property managers (so I am told), I would not happily test out a risky situation like this unless I could control all the levers myself.
Because honestly -a 15/hr employee is not going to manage your asset as you would..... they just wont get the urgency and their "boss" is not your wallet rather their bosses wallet.
If this were me,I would try to learn the ropes with a small short term rental, or I might research mid term rentals and see if that might be more viable (hoping it would be less work for you) so you can learn the ropes, find a good PM etc.
Also, just a heads up - I read posters profiles to see what they are selling and keep that in mind.....
The keys to a successful Airbnb are Great location, design style (Instagram/Pinterest worthy!) and great pictures. I've done STR before I started long term rental. That was my first ever experience in renting out a place! And the profit were more than doubled. I didn't use property management cuz I wanted to pocket everything. Yes it was a lot more time consuming but the pay off was so much more that I would do it again. I didn't buy expensive furnishings. I didn't have a lot money But keeping a specific design style was important. Either mid century, rustic farm, or boho decors, they played important role in bringing customers. My place was booked all year long. However the city Passed a law to prohibit STR. I had to switch to a regular Long term rental. I'm looking into getting another STR property. It has been tricky in getting the right location for the right price. I'm doing lots of research first before jumping in blindly this time.
Don’t be afraid to jump into something that you’ve never done. You’ll be surprised how many people that I knew said why would anyone wanted to rent my place daily. I just stayed silent & smiled at them. If only they knew the kinda money I was bringing in. Do reseach & compare other Airbnbs around your areas. And study why some do well than others to start.
My place was small. Only 2bdrm condo a little over 1000sqft. It’s not the size of the home. It’s the design style, location & price.
Originally posted by @Nadia O.:
The keys to a successful Airbnb are Great location, design style (Instagram/Pinterest worthy!) and great pictures. I've done STR before I started long term rental. That was my first ever experience in renting out a place! And the profit were more than doubled. I didn't use property management cuz I wanted to pocket everything. Yes it was a lot more time consuming but the pay off was so much more that I would do it again. I didn't buy expensive furnishings. I didn't have a lot money But keeping a specific design style was important. Either mid century, rustic farm, or boho decors, they played important role in bringing customers. My place was booked all year long. However the city Passed a law to prohibit STR. I had to switch to a regular Long term rental. I'm looking into getting another STR property. It has been tricky in getting the right location for the right price. I'm doing lots of research first before jumping in blindly this time.
Don’t be afraid to jump into something that you’ve never done. You’ll be surprised how many people that I knew said why would anyone wanted to rent my place daily. I just stayed silent & smiled at them. If only they knew the kinda money I was bringing in. Do reseach & compare other Airbnbs around your areas. And study why some do well than others to start.
My place was small. Only 2bdrm condo a little over 1000sqft. It’s not the size of the home. It’s the design style, location & price.
You’ll be surprised how many people that I knew said why would anyone wanted to rent my place daily. I just stayed silent & smiled at them.
Love that!! There are so many naysayers out there, particularly when you're getting started in real estate. Then once you get traction and results they tend to disappear or shush up.
- Property Manager · Kansas City, MO · Member since 2018 · 280 posts · 221 votes6y
@Joe S.great question and I should have clarified. I made the return back + profit for the investors I work with. There was no cost from me as I only do the management for a commission. Keep asking questions and I hope you find that something that works for you!
- Rental Property Investor · Sacramento, CA · Member since 2011 · 2k+ posts · 1k+ votes6y
Cool thread with some good ideas. @Joe S.. my quick thoughts are that you should always consider extended stay rentals which are +30 day stays. There's less time demand for the same net income.
Also, regarding startup costs, these types of investments are perfect for someone's self-directed IRA. Nearly everyone who has one is looking for a small dollar investment.
It's super important to focus on breakeven. You technically won't make a profit until you've repaid your startup costs. So, with that in mind, it doesn't matter if the start up money is your money or not.
The way I see it, I own and manage 28 extended stay rentals by the way, is you want to operate to break even as fast as possible so you have money to improve your lifestyle and enjoy life. This rule helps me not over-improve my furnished rentals and keeps me focus on net income decisions (and not the noise).
I hope that helps the discussion.
Originally posted by @Stephen Doyon:
Hi Joe!
You'd be surprised how inexpensive it can be to furnish a house as a short-term rental. My wife and I purchased a lake front home and operated it as a short-term rental for about 18 months and realized a total net profit of over $30k during that time before we sold it to my wife's sister to use as her primary residence. It cost us about 10k to furnish and outfit inside and out, right down to the silverware, towels and dock system. While we enjoyed the positive cash flow, the amount of time we spent on this one property far outweighed the other long-term rentals we owned. While I enjoyed interacting with guests and some of the unique aspects of short-term rental operation, I prefer the passivity of our long-term portfolio for sure. Hope this helps.
I did it this summer for a small shore house and I was blown away by how much time is spent on communication/scheduling - cleaning wasn't that difficult for me. Did you use any software? What systems did you use to schedule? Just curious :-)
- Realtor · Lubbock, TX · Member since 2020 · 144 posts · 80 votes6y
I think location has everything to do with the to Airbnb or not to Airbnb debate. Is there a marketable way to ensure the property stays rented? As in a beach front condo, a cabin in a charming mountain town, a loft right next to a major sporting arena... I wouldn’t want to dumb a ton of money into furnishings without being able to create a marketable property that people remember and refer friends to.
I stayed in an Airbnb down in Galveston, Texas once and I remember it very well because it was right by the Cruise ship port and was decorated in a cruise line theme. This is a marketable idea to me where as a non-themed Airbnb wouldn’t stand out and I wouldn’t personal view it as a solid investment.
Short version... if you go for it don’t do it half ***. Create a marketable theme and run with that theme.
- 6yStephen DoyonPro MemberInvestor · Norway, ME · Member since 2013 · 27 posts · 16 votes
Originally posted by @Cody Z.:Originally posted by @Stephen Doyon:
Hi Joe!
You'd be surprised how inexpensive it can be to furnish a house as a short-term rental. My wife and I purchased a lake front home and operated it as a short-term rental for about 18 months and realized a total net profit of over $30k during that time before we sold it to my wife's sister to use as her primary residence. It cost us about 10k to furnish and outfit inside and out, right down to the silverware, towels and dock system. While we enjoyed the positive cash flow, the amount of time we spent on this one property far outweighed the other long-term rentals we owned. While I enjoyed interacting with guests and some of the unique aspects of short-term rental operation, I prefer the passivity of our long-term portfolio for sure. Hope this helps.
I did it this summer for a small shore house and I was blown away by how much time is spent on communication/scheduling - cleaning wasn't that difficult for me. Did you use any software? What systems did you use to schedule? Just curious :-)
Hi Cody,
We listed on multiple platforms and were able to link all calendars together so a booking from one platform would automatically populate in the calendars for the other platforms we listed with. I also used the message template features quite extensively. I created templates for each season. For example, summers I would have instructions for where to find water toys and kayaks, winters would have directions on how to use the pellet stove in the living room, etc. I also had welcome templates and templates for replies to frequently asked questions (even though the answers were often in the post or guidebooks). When I needed to reply, I would load a template, add the name of the person on the booking, and send it off. We typically replied to ever message in under an hour and as quickly as possible. We only had one rental, so this system would likely need to be changed if we scaled up. We had a lot of comments from guests saying we should teach others how to run their short-term rentals. We basically just tried to treat people as we expected to be treated if we were renting somewhere else. Hope this helps!
Originally posted by @Stephen Doyon:
Originally posted by @Cody Z.:Originally posted by @Stephen Doyon:
Hi Joe!
You'd be surprised how inexpensive it can be to furnish a house as a short-term rental. My wife and I purchased a lake front home and operated it as a short-term rental for about 18 months and realized a total net profit of over $30k during that time before we sold it to my wife's sister to use as her primary residence. It cost us about 10k to furnish and outfit inside and out, right down to the silverware, towels and dock system. While we enjoyed the positive cash flow, the amount of time we spent on this one property far outweighed the other long-term rentals we owned. While I enjoyed interacting with guests and some of the unique aspects of short-term rental operation, I prefer the passivity of our long-term portfolio for sure. Hope this helps.
I did it this summer for a small shore house and I was blown away by how much time is spent on communication/scheduling - cleaning wasn't that difficult for me. Did you use any software? What systems did you use to schedule? Just curious :-)
Hi Cody,
We listed on multiple platforms and were able to link all calendars together so a booking from one platform would automatically populate in the calendars for the other platforms we listed with. I also used the message template features quite extensively. I created templates for each season. For example, summers I would have instructions for where to find water toys and kayaks, winters would have directions on how to use the pellet stove in the living room, etc. I also had welcome templates and templates for replies to frequently asked questions (even though the answers were often in the post or guidebooks). When I needed to reply, I would load a template, add the name of the person on the booking, and send it off. We typically replied to ever message in under an hour and as quickly as possible. We only had one rental, so this system would likely need to be changed if we scaled up. We had a lot of comments from guests saying we should teach others how to run their short-term rentals. We basically just tried to treat people as we expected to be treated if we were renting somewhere else. Hope this helps!
Very, very good. Thanks for your insight. Did you do minimum stays or anything like that? I typically tried to do at least a week minimum as it weeds out party people, etc.
- 6yStephen DoyonPro MemberInvestor · Norway, ME · Member since 2013 · 27 posts · 16 votes
Originally posted by @Cody Z.:
Originally posted by @Stephen Doyon:
Originally posted by @Cody Z.:Originally posted by @Stephen Doyon:
Hi Joe!
You'd be surprised how inexpensive it can be to furnish a house as a short-term rental. My wife and I purchased a lake front home and operated it as a short-term rental for about 18 months and realized a total net profit of over $30k during that time before we sold it to my wife's sister to use as her primary residence. It cost us about 10k to furnish and outfit inside and out, right down to the silverware, towels and dock system. While we enjoyed the positive cash flow, the amount of time we spent on this one property far outweighed the other long-term rentals we owned. While I enjoyed interacting with guests and some of the unique aspects of short-term rental operation, I prefer the passivity of our long-term portfolio for sure. Hope this helps.
I did it this summer for a small shore house and I was blown away by how much time is spent on communication/scheduling - cleaning wasn't that difficult for me. Did you use any software? What systems did you use to schedule? Just curious :-)
Hi Cody,
We listed on multiple platforms and were able to link all calendars together so a booking from one platform would automatically populate in the calendars for the other platforms we listed with. I also used the message template features quite extensively. I created templates for each season. For example, summers I would have instructions for where to find water toys and kayaks, winters would have directions on how to use the pellet stove in the living room, etc. I also had welcome templates and templates for replies to frequently asked questions (even though the answers were often in the post or guidebooks). When I needed to reply, I would load a template, add the name of the person on the booking, and send it off. We typically replied to ever message in under an hour and as quickly as possible. We only had one rental, so this system would likely need to be changed if we scaled up. We had a lot of comments from guests saying we should teach others how to run their short-term rentals. We basically just tried to treat people as we expected to be treated if we were renting somewhere else. Hope this helps!
Very, very good. Thanks for your insight. Did you do minimum stays or anything like that? I typically tried to do at least a week minimum as it weeds out party people, etc.
We started out with no minimum stay and slightly below market rates to gain reviews as quickly as possible. We broke even on one-night stays but we only had a few to start. After we had about 20 reviews, we went with a 2-night minimum. We didn’t have too many gaps in our schedule and we had a great turnover system for same-day turnovers so we were able to manage it. We also offered a discount for week-long stays or longer and had a maximum of 2 weeks per stay. Overall, everything worked out great. We only had issues with one group and that was due to an error by Airbnb that allowed them to book at a super low price during the summer season. We had a cancellation and the group that booked partied it up for a few nights and left some vomit on a bedroom floor and a screen popped out of a door. We gave our cleaning person a $100 bonus and Airbnb made it right. It was pretty minor overall.
- 6yHolly BrownBusiness MemberReal Estate Agent · Houston TX and Salt Lake City, UT · Member since 2019 · 190 posts · 137 votes
I agree completely with @Zachary Ray@Stephen Doyon. STR's are not that much more expensive to furnish, but do take a lot more time to manage. The benefit is higher cash flow which is helpful to diversify your portfolio early and grow more quickly.
@Zachary Ray is spot on. It's all about the long term strategy. If you buy a property that can "only" be STR, then you are limiting your options. I have purchased in Galveston for STR but only properties that I would consider attractive to a snowbird (medium term) and could also be turned into a long term, if needed. I was thankful for this very strategy in March, as I turned an LTR I have near the med center into a medium term for the increase in traveling medical professionals. Thankfully, I now know that was the right decision, as I have had 8 days of vacancy since March and a much higher cash flow.
Join the conversationCreate a free account to reply, vote on answers and follow this thread.