I've been debating on buying a property to use as an airbnb rental. I'm familiar with estimating for a property that will be a long term rental, but not this. I wanted to see if I might get some tips on what I may need to take into account when working out my numbers on an airbnb.
Possibly things like:
what are typical management costs around airbnb and what does this include?
what are average cleaning costs, if they are not part of management?
how many days per month should be estimated as rented vs vacant?
is it better to rent furniture vs buy?
what are typical costs around furnishing something like a 2bed/2bath house?
Some people will say $5000-$8000, but I do it for under $1000.
@David Hedges it is impossible to answer your question without more specifics. Please go back and read as much of the old posts in this forum as you possibly can, your question has been asked dozens of times.
You can't answer your question because it depends on so many factors. Where is the property and what is the market like? Is it a ski area that rents 3 months of the year? A condo near Disney in Orlando? A residential apartment in NYC?
Cleaning costs on a 2 br cabin in Pigeon Forge vs. a 2 br apt in Brooklyn NY vs a 2 br home in Malibu will be wildly different.
Look up Luke Carl's enemy method and you'll have a much better start before asking the next set of questions.
Thanks for the reply I’ll go review.
I had been looking at the key west, fl area, thinking it should get good year round use, with the exception of when there are hurricanes.
Greetings! My experience comes from Orlando area:
1) what are typical management costs around airbnb and what does this include? 15%-20% Reservation Fees.
2) what are average cleaning costs, if they are not part of management? 4 bedrooms $120; guest pays that
3) how many days per month should be estimated as rented vs vacant? 75% occupancy rate
4) is it better to rent furniture vs buy? It depends on the furniture condition and design.
5) what are typical costs around furnishing something like a 2bed/2bath house? $8k -10k plus labor $1k-$2k
Do you want a place “to use sometimes” or do you want a a place that is hand-picked for its income potential?
I’m more interested in income potential, though the idea that I could stay there as an option does sound nice. It’s more likely though that I’d rarely if ever stay in it.
Also I would pull as much data as you can before selecting a property. I pulled AirDNAs on all my interested markets before making an offer. You'd be surprised how much different the income potential is in one beach community versus another.
Also don't forget closing costs in Florida tend to be higher than you'd expect.
@Ezra Benjamin Harris I have to laugh at that one, coming from NY! Closing costs are relative.
Most of the answers you seek are market specific. I operate a number of short term/vacation rentals in the Colorado Springs area, both my own and others and have run numbers on properties for lots of investors. Rather than try to answer your questions with numbers because answers will so dependent on your market, here are some costs that you should consider categorically that you might not be thinking of from your experience with long term rentals:
- Insurance (that covers STR activity--not just any landlord policy)
- Utilities (including internet and possible streaming services at minimum)
- Hot tub maintenance if applicable
- Replenishables (paper towles, coffee, etc)
- Laundry service (maybe this is bundled with cleaning)
- STR specific taxes in addition to property tax
- Yard care, snow removal
- Licensing cost from your city if applicable
Hope that helps! Have fun; STRs can be a great experience and definitely can be a great way to turbo your cash flow even if you are buying in a hot market. Using the property for yourself is fun too!