air B & B a flip house?

Question

I am trying to sell my latest flip house.  We unfortunately finished it right when the interest rates went up this fall and everything slowed down around here. I'm confident that the house will sell but it's taking a little time. I am wondering if it's a good idea to air B&B it while I'm waiting to help cover the carrying costs. Has anyone done this and has it been worth it?

Michael Baum · Answer

Hey @Mark Davis, if you aren't going to go whole hog into the STR game (AirBNB is a platform, not a house) then doing it for a few months doesn't make sense. You will need 10k+ to get it furnished out and you will have to remove all of it and store it after it sells.

Like @John Underwood said, what if you get some bookings 8 months away. We have bookings for 2024. Are you just going to toss them to the curb?

John Underwood · Answer

It's going to be expensive to furnish just to rent it out for a few months. Then what happens if you take reservations for months down the road and you have bookings?

Bob S. · Answer

Why not, ? Do not over think it. Income is income,

Reed Rickenbach · Answer

From my experience owning AirBnbs, I'm not sure it fits as a solution to covering carrying costs unless you're planning on selling it as a turnkey AirBnb. You will need to furnish, list and get reviews before any significant revenue comes in. Of course, if you're planning on holding it long-term that's a different story. Make sure to check for permits etc in your area.

Brooklyn McCarty · Answer

Furnishing is going to be a large expense and it depends on where it’s located.

Bruce Woodruff · Answer

Depends on location, as do all STRs. If you are certain it will be a desirable property (look up your area on VRBO/AIR) then why not make a few bucks? Heck, it might well be a big money maker and you'll want to keep it.....?

But there is both a learning curve and a money curve to get into this business so make sure there is a very good return on the effort.....

Tyler Solomon · Answer

Unless you have a rather prime location / intrinsic value in the property as a vacation destination, it may be hard to get the cash flow you are looking for without at least furnishing the property and getting 1 or 2 reviews up. Is the property centrally located to any big attractors/venues/reasons for guests to need a place to stay?

Nathan Grabau · Answer

This really depends on how it will do as an airbnb. I would use pricelabs to check the comps in your area and see how they are performing, especially at this time of year, as that will impact the decision.

Your time horizon is also important here, for a high end airbnb, I would plan on spending at least $20 a foot furnishing it, so you need to make sure you have the capacity to recover that cost too.

That all being said, if you want to get into the STR game, this is probably a great excuse to do it. But if you core competency is flipping and flipping is what you want to do, take the hair cut, and find the next house you are going to flip.

air B & B a flip house?

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