I am starting to be an Airbnb "Turn-Key" provider in Columbus OH!

40 Replies

I have started a STR management company here in Columbus OH. We have having a lot of success, and are adding houses as we speak. We are currently managing 8 houses on Airbnb. I own 4 of those properties that I have bought, renovated, staged, listed on Airbnb, and are now up and running as "full-time" short-term rentals. I am considering to sell one or 2 of these houses as "Turn-key" Airbnb houses. Our company will manage it just as we are now. The house will sell with all the furniture, the current listing on Airbnb, and all of the good reviews we have collected. These properties are all seeing returns of 30% - 90% (depending on purchase price) annual ROI !

The investors will need to do nothing on site. This is passive ownership, and you get a check and a statement every month. We are considering offering a program where you would be able to visit and stay in the house as well in Columbus, if you wish to. 

I am considering to sell these, as a whole to one investor, or as a package that a group of partners will invest in (one being myself). 

If anyone has interest in learning more about this opportunity, please message me. 

Cheers,

Benjamin Vail

@Benjamin Vail make sure you have relationships with banks and lenders as you start advertising STR's for sale. Large national lenders are difficult for investors to deal with because they don't truly understand the STR market. They will start steering your buyers to commercial products and that doesn't work on 20 year terms. Just a watch out I have encountered in the past when selling and STR property. Good luck, and it looks like you are well on your way to killing it!!

@Benjamin Vail - Do you mind me asking how and through whom you are insuring the properties? I'm planning to use Proper for full-time STRs in Baltimore, but alway looking to hear if others have other insurers they like.

Hi! We have 2 AirBnBs right now and looking for a third (just had a deal fall apart). We thought about the same thing as far as the management company. We talk to so many people that know nothing about AirBnB or its potential. They usually seem kind of overwhelmed by it instead of excited. We see returns at 2x that of traditional rental here, so I think people would want to do it, especially with someone else managing. What are your management fees like? I would assume more than the typical 10% since the workload is significantly more. Also, what kind of interest have you had? I guess you're managing 4 properties besides your own, but how long have you been doing it/is it growing quickly?

@Eric A. Thank you for that heads up! I have some good relationships, but can always work on getting better ones. When I look at the lending landscape, I see lots of new options popping up for investors to use to purchase STR's. However I do realize that the current lending market (and appraisers) are not quite "on board" yet with the STR game. I am considering lots of different options, including "owner financing", private financing, staw-leases, ect. in so far as getting these deal financed. I think we will be able to patch together a few good deals until the larger national lenders start to finally get on board for financing these deals.

I have a friend in Lexington KY, who just bought a 7 unit building (that is all STR Airbnb), as a package with furniture and listings. He got the building financed at a "market valuation" ($430,000) and then paid the additional ($100,000 ish) as cash, like an additional down-payment. Obviously that is a cash-heavy investment, but the numbers still work great. I suggested to him that also, you can then borrow cash back out of the listing with a company called Clearbanc that loans money based on future Airbnb reservations on your listing.

What strategies have you used to sell a STR? What kind of valuations are you giving for the non-tangible assets? What kind of valuations are you selling tangible assets, like furniture?

Thanks for sharing!

@Andy O'Neal - I use Proper on most of the properties. Some of them are just rental policies, or primary residence policies (I know, we need to get them changed!)

I like the product that Proper Insurance offers, but they require a signed rental agreement with each guest and I DO NOT like that! That is a whole extra step that we have to do with each guest. Also, they were picky on the underwriting of an older house that we used them for (required new electrical work done). 

I too am looking for new and other insurance companies that are wanting to play ball with the STR market. Please keep me updated if you hear of any!

@Benjamin Vail Hi!  I have been listing with airbnb with my SF property since the 2012 and a Superhost with a great relationship with headquarter.  I am immersed with this concept so we should talk more.  Currently I am looking to acquire a 14 unit in Old town East and looking for property managers for it. Would this be something you would be interested in working with?  

@Benjamin Vail - on the older properties, I here you 100%. I'm going up today to have an electrical inspection done on my first place. Just about every place in my neighborhoods is 100+ years old. Luckily, the guts are new. I'm hoping they can insure with nothing more than inspections...  we shall see.

I thank you for pointing out the signed rental agreement requirement. I had never seen that before and it may affect my decisions going forward. I'll definitely continue to share whatever I find out (and, of course, whatever I do) here on BP. 

@Carrie Penney Hi there, great to hear from you! Yes, this STR market is VERY exciting, especially for the people who have researched it, and can read the writing on the wall in so far as where this market is headed. I built my company for the exact reason of helping people invest in, and take advantage of the great returns in the STR market, but they don't know how to do it, or don't have time to do it.

I have had a lot of interest! A month ago I made 1 post on BP, and have had 10+ leads from that one forum post! I have actually helped a few of those people make offers on properties, and signed a contract with another person to magnate their newest rental on Airbnb! 

Yes, we are seeing almost 3x returns here in Columbus, and all I need to do is get the word out more to grow the # of houses exponentially! Yes we charge more than the typical 10%, but the actual fee varies with each property. It depends on how involved the owners want to be. 

I have been hosting on Airbnb myself for 2+ years, and started the Managment company over a year ago. It is growing quickly! I have taken on a partner, and hired 3 staff members so far. We are building systems, and relationships with lots of people in the STR sphere. We are looking to grow outside of Columbus, and build franchises in cities all over the US, and eventually the world. You might as well dream big, right?

Where are your Airbnbs? Are the all in Lubbock? What kind of occupancy are you getting on those units? What are the biggest problems that you are trying to solve?

Thanks!

@Andy O'Neal check out.  Comethome.com, a friendly short-term rental insurance company and set up.  I am not using them as I am booked all the time and my insurance company thinks I still live there.  (but that is how you have to run air bnb in SF with our new regulations.)  

@Angela Yan Great to hear from you! Yes, you SF'ers are always early adopters right? I love the bay area, earlier this year I stayed as a guest in an Airbnb treehouse just south of SF that was AWESOME! I also am immersed in this concept, as a guest, as a host (super host), and as an investor and business owner. 

Great to hear that you are looking in Columbus. As the population of Columbus doubles over the next 10 years, property appreciation will be really good. Old Towne East is a really good place for that! We currently manage a unit over there, right outside of Franklin Park. We are currently working with the wedding planner at Franklin Park Conservatory (the most expensive wedding venue in Columbus) to offer our Airbnb as a wedding package for the wedding party (we are the closest Airbnb to the venue!). 

I would be very interested in working with you on managing that property for you. Feel free to message me. Thank you!

@Benjamin Vail . You seem to be the perfect man for the job and would love to talk more shop with you on Columbus OH and Air bnb. The concept is all about the experience along with lodging. I also recently just got back from the Bay Area RE Summit and there were easily 4 presentations on short term furnished housing industry. The numbers work really well with this business even better than MFR.

@Benjamin Vail yes all of our properties are in Lubbock. It's a great market. Population is about 250k and the university here is growing really fast with a current population of about 40k. Houses here are still really affordable. Honestly, we aren't having any trouble with AirBnB. Our overall occupancy rate is 70-80% but some dates we choose to close due to travel or some other reason. Also we have a relatively new property that we have been playing with rates on, so that should stabilize soon. Currently we have no staff (just me and my fiancé) so if we have someone with a checkout date that falls while we are out of town, we have to mark off the remaining days until we return, or hire a cleaner. We have done both. Overall returns are crazy, like 4x, and double what traditional rentals look like. As young, brand new investors, AirBnB has been great. It's valuable and easy. We haven't run into any issues that we may otherwise have. Also it's so nice to see your property all the time, instead of getting it back after a year and having it destroyed.

One thing is that the workload as far as cleaning is already getting to be too much, as we still work full-time jobs and are also full-time graduate students. We try to have guests checked out early enough that I can get properties ready during my lunch break, but some guests are messy enough to require more time than that, or check out late. Currently all of our properties are close to my office and my own home, so the logistics work out okay. We probably will have to hire someone on our next purchase. Most of our properties have lots of potential with house hacking or backyard efficiencies/other rental units, so we are thinking about doing a small rent reduction for someone willing to clean up after AirBnB guests.

Do you think having your own AirBnBs while managing others will create any conflict of interest? Like, being able to adjust your own rates to be more competitive than others on the market? Or is there a big enough demand where you are that it is okay? We are wondering how many properties we can have before we are just competing with ourselves. Our city isn't a "destination city" and doesn't have much draw besides the university. It's still crazy how many people come through here, though, so I think it can float on for awhile.

Ben, I like your business model. I search for Airbnb markets and properties nearly full-time to acquire personally and for my investment groups. I am very interested in learning more about your Airbnb homes for sale, please pm me or feel free to call me. 

I popped up a new FB group to better connect Airbnb Sellers with Buyers. No other agenda than to make it easier for Airbnb Sellers to connect with a bunch of real buyers, who are all into Airbnb. No middleman or anything, direct seller to buyer, and folks can use agents etc.. You might want to try an post your homes to buyers in that group. The group will have lots of buyers, worldwide, specifically looking to buy Airbnb. Just search AIRBNB HOMES FOR SALE on FB and post them in the group. I look forward to chatting with you and learning more and these homes. 

@Benjamin Vail So it sounds like you've been in RE for a while and are now moving towards focusing on AirBNB, right? I don't yet own any AirBNB's but I've owned a few properties over the years. I've read several books on AirBNB and many many podcasts inside and outside of BP and I am convinced of its potential. I see STR as a vehicle for achieving a higher ROI-per-property (albeit with a higher level of effort). I'm not looking to buy 10-20 properties that each make a few hundred bucks a month for very little effort -- I'm looking for a smaller number of higher-return properties, and I don't mind the extra effort. To start with I'll pay for some extra help such as the many AirBNB "helper" services such as client communication apps, cleaning services, management, virtual assistant, and many others (or, use a service such as yours -- or perhaps co-hosting through other hosts). This will cut into profit initially. But ultimately my goal is to quit my well-paid but boring cubicle-based day job and do it full-time at which point profit would rise as I can take on more management myself. My properties will be OOS since I live in Denver and the market to just too hot here plus AirBNB is mostly illegal here. Let's talk soon.

@Benjamin Vail   @Angela Yan   If you are using a standard residential insurance policy and your house burns down aren't you at serious risk of insurance refusing to pay? And what about if a guest hurts themselves in your place and sues you?

@Tim Schroeder from what I remember, AirBnB has a million dollar policy on all hosts. Not sure what it covers, though.

Per AirBnB -

"What does the Host Protection Insurance program cover?

The Host Protection Insurance program provides primary liability coverage for up to $1 million per occurrence in the event of third party claims of bodily injury or property damage. This coverage is also subject to a $1 million cap per listing location and certain conditions, limitations, and exclusions may apply. For more information, please visit our Help Center.
The Host Protection Insurance program covers landlords and homeowners associations in many cases when claims are brought against them because a guest suffers injury during a stay. For examples of what’s covered and what’s not, please visit our Help Center.
The Host Protection Insurance program may also cover claims if a guest damages building property. This often includes claims filed by a landlord against a host. For examples of what’s covered and what’s not, please visit our Help Center.
The Host Protection Insurance program can now serve as your primary coverage for eligible claims filed as a result of Airbnb stays. Landlords are covered only if Airbnb and/or the host is also a party to the claim."

@Benjamin Vail , Interesting concept. Could you provide sample numbers of the cost of property vs (expenses and returns). Nothing too deep but just highlevel. I am on the westcoast and don't know what to expect. 

Please PM me. Thank you.

I would suggest an additional umbrella policy as well. They are inexpensive and easily obtained. I am curious if anyone has placed a claim with either Air BnB or VRBO? They both tout their million dollars of coverage but I cannot find anyone who has processed a claim.

Thanks,
Eric

Originally posted by @Vandana Rao :

@Benjamin Vail , Interesting concept. Could you provide sample numbers of the cost of property vs (expenses and returns). Nothing too deep but just highlevel. I am on the westcoast and don't know what to expect. 

Please PM me. Thank you.

 @benjamin Vail  I'd like to see those numbers too....

@Benjamin Vail can you also send those number to me? I live in Pittsburgh and am very intrigued with the STR concept. my wife has had many business meetings in Columbus and really likes the city.

Hi Benjamin, Thanks for your post. I am looking into buying a single property in Ohio and use either as an STR or a LTR to get some great cashflow. If you have a single property that you would like to sell, I would love to connect. Don't know if I can get together some other investors to buy multiple properties but I might be able to sell it to some of my investors as well.

@Tim Schroeder my policy as residential allows me to have guests. It is up to me if I want to charge my guest. It is like putting my friend or family in my place and if I want to charge them that is up to me. So with that in mind if they get hurt they are covered. I also carry an umbrella policy up to a couple million dollars and it doesn't cost much more. There is so much Air bnb going on in SF as the headquarter is a few blocks from my house this sharing concept is not new here. There are insurance products and loan products that counted my Air bnb as income and property to insure. (I am with Farmer). 

I would be  interested in hearing about your properties.  I am certainly excited to hear that you are doing well in the Airbnb market.  I think that is a great play these days and have been considering adding this element to my investment strategy.  

Join the Largest Real Estate Investing Community

Basic membership is free, forever.