House hacking with Airbnb

[Daniel Lehrman]

What's your opinion on house hacking with AirBnB? Here's what I've experienced travelling in San Diego and Vancouver. You stay at property that has a guest house. We retrieve the keys from a lockbox, or a hidden location. Other than through the app, we don't communicate or see the owner during our stay. No awkward tension, no missed payments. Sounds pretty awesome for the owner! Also, it seems you could make more money than renting to a tenant. AirBnB's rating and review system eliminates much of the host's risk of encountering an unpleasant guest. Worst case, it's only a few days. Now, I get that it may be more regular maintenance (changing sheets, cleaning bathrooms, etc.) than a traditional rental. Also I'm paying utilities and furnishing. There also might be more vacancies. But I like the idea of being a host! (rather than a landlord) Ignoring restrictive laws and HOAs, what is your opinion on house hacking with AirBnb? Love to hear from someone that's doing it!

[Fabio Salas]

I househacked a duplex in SD last year. I made a ton more money via Air BnB than I would have renting long term. In fact, during the summer I made more than enough money to cover the entire mortgage, ALL expenses, and have positive cash flow. However, there was also A LOT of work involved. Some days I was rushing home during my lunch break to clean the rental between guests (I routinely had guests checking out at 11:00 A.M. and guests checking in at 3:00 P.M. that same day). In order to get good reviews and provide great customer service you have to be extremely responsive. Air BnB actually tracks how quickly you respond to messages so this also makes it more work than managing a long term tenant. These are just examples of the extra work required. If you're up for all that, it can be a worthy investment (ignoring laws and HOA rules as you said). However, understand that you probably won't house hack and rent through Air BnB the lifetime of the mortgage, so you need to run the numbers as a long term rental as well. And run the #s to estimate how soon you can sell the property and still make a decent profit. My point here is, you need to provide yourself several different exit strategies so you don't end up with a huge SoCal loan that negative cash flows for years on end and eats into your bottom line.