I am looking at buying a condo in downtown Anchorage, Alaska to rent out as a BnB. Looking for any success stories or others who use this strategy in the area. How profitable is it? Do you self manage or go through a PM? Thanks for your time, cheers all!
STR's can definitely be profitable. Self-management is fairly easy through Air BnB or VRBO. Lining up a couple reliable cleaners is vital. They are a huge part of making it successful. Definitley want to verify that there is no rules against it at the condo you plan to buy. Best of luck.
I agree with Shaun 100%. I have a 4plex I'm going to convert to STR units this summer. I haven't done it yet myself but I have a bunch of investor friends that have. Typically, I see rents about double annually. In the summer it's about triple and the winter is usually about the same as what a LTR would normally bring in. There's an argument to be made that you'll see less wear and tear from a short term tenant coming and going and spending most of their time out and about versus a long term tenant living in a unit so there's that possible advantage too. I think it's worth it. I would have done it in 2020 but... well, you know. LOL
@Shaun Hatton thanks for the reply and awesome advice. I’m familiar with reviewing declarations and covenants for HOAs. Although they can be a pain to track down at times, which makes me question why. Anyway thanks.
@Keenan Fitzpatrick hahaha yes.. the great year of 2020. I've been reading exactly that, and after speaking to other investors who have STR it seems they profit significantly more using this method. I'd imagine the work associated with it will also add up. Thank you for the reply.
@Ryan Santiago STRs can be great in this town, especially if they don’t cancel tourist season again. But it’s definitely not as passive as traditional rentals. What’s your time worth? Are you looking for passive income or a side hustle, emphasis on the “hustle”? Running an Airbnb is more akin to running a 1-room hotel than owning a rental... and if you’re not careful about how you set up your entities, it’s also taxed as such (at your ordinary income rate if your average length of stay is less than 7 days). What’s your exit plan when you PCS? You’ll need to factor in management fees even if you manage it yourself while you’re here, or you might find yourself with a property that costs you money to own and operate.
@Ryan Santiago I looked into buying a condo in Anchorage to rent out as well. I ran into a few issues and decided to pursue a house or multifamily instead for two reasons.
First, nearly every condo's HOA expressly forbid STRs, and some even long term tenants. However, I was mostly looking closer to the airport, and on the East side of town near military bases.
Second, many of the buildings that I was looking at were 1970's and older, which isn't too old in most markets, but Alaska seems to be hard on properties. Be sure to look into the HOA's reserves and history of special assessments. I found most HOA's weren't eager to share either of these, which was a red flag for me. Again, downtown might be a different story.
If I was you, I would look at Spenard, near the airport. I know someone who has a place about 3 minutes from the airport as well as a place downtown, both STR. He told me that his house in Spenard is booked just about year round, while his house closer to downtown sees a sharp drop off in the winter.
I'm curious to know what you find out with downtown HOA's. Best of luck.
I ran an AirBnB out of my 3/2 house in the "Spenardagain" area for over a year. It was booked up from about May to September until the second wave of COVID resulted in cancellations for most of the fall. I enjoyed the hospitality aspect of it, and once you get a system down it can be fairly hands off. Hire a solid cleaner with clear directions and it will make life much easier. I think a nice 2 bed 1 bath place that's easy to put back together is a great balance between bang for your buck and always staying booked.