Hi BP Community! I will soon be moving out of my first home. I bought it knowing that I always wanted it to be my first rental property, however not sure if the best way to go about it would be Air Bnb or a Management property with a full time renter? My pro's and cons to AirBnB is that I love the flexibility in being able to use the home if/when I am back in town. However, that flexibility doesn't make for a guaranteed profit month to month to cover the expenses. Also - I will be moving to another state. So that also falls into the possible cons? For renting - I would use a management company since I would be relocating away from the area of the home. This ensures that I have a full time renter (hopefully). I was hoping some of you in the community could lend me some advice on which is the best way to start. Get my feet wet with AirBNB or jump in head first with the property management.
Would love anyone to share their experiences with me in either area or both and let me know what has and hasn't worked along your journey to becoming an investor. I plan to acquire more properties in the future this is just my first of many!
Thanks in advance!!!
Hi Danielle! I love that you are asking this question and considering different options! I have experience with both short-term and long-term rentals. Of course the ultimate answer will depend on a lot of different variables that you will need to weigh. My first thought would be to make sure there is enough demand in your market for a short-term rental that is comparable to your property. If you're not sure, you can go onto websites like AirDNA to get a feel for the demand, price, occupancy rates, and to compare your properties amenities to the ones in your area. This could potentially reveal pretty quickly that a long-term renter might be the better way to go from a cash-flow perspective. However, if it looks like it could be feasible, then you can try to find property managers to talk to that have experience with both short and long term rentals in your area. They can give you a better idea of turnover costs, occupancy rates/seasonal demand, maintenance, etc. Finally, don't be afraid to test the waters! If you run the numbers and think you could make the short-term rental scenario work (and WANT to), you could test that out for a few months to see how you like it. Just keep in mind you may have to invest in some upfront costs to cover the basic amenities like cookware, linens, furniture, etc. So it could potentially be a costly experiment. But if you're planning to buy new items when you move, this could be a viable option. I hope this helps a little!