I have a 4 unit apartment bldg that I have had trouble renting 2 of the units. I went a little over board on the rehab and now am asking a bit higher than market for the rent. However with 2 units being rented I am able to almost cover my costs. I have a pretty successful airbnb that I operate out of my basement. My question is, has anyone ever used any units of an apartment bldg for short term/ vacation rentals?
I don't own a MFR but if I did I'd probably be doing exactly what you're proposing. You might want to start with just one unit, since you'll have to lay out more cash to furnish it, etc. If it gets a great response and the second unit is still vacant (hopefully not!) you can convert that one too.
Apartments rent on AirBNB all the time, no reason you can't do it - but of course, check out what comparable units in the area are getting, get a feel for demand and occupancy rates, make sure it's going to be worth your while before you proceed.
I have a 14 unit apartment complex. They are all 2 BR 1.5 bath, and it's mostly retired people that rent them for long term. $400/month is the rent. 5 years ago a tenant moved out and we decided to make it a STR and charge $400/week. That went well. Now 10 of the apartments are STR, and I'm waiting for the remaining 4 to become available. The nice thing about when they become available, the people moving out usually want to sell their appliances and furniture because they are going to a nursing home or to stay with family.
Before you go overboard, make sure there is a demand for STRs in your market. I only rent to refinery contractors with a per diem. $400/week gets a cheap motel room, or a nice furnished 2BR apartment in this town.
Some good advice above from @Julie McCoy and @Paul Sandhu I'd just add to be sure you know your local regulations. You're just outside of Birmingham, but every city's different. (Like, here in Denver, the Airbnb rules are pretty strict. Just an hour south in Colorado Springs, they're wide open.)
Something tells me that Chelsea, Alabama does not have any rules prohibiting short-term rentals or Airbnb -- especially since you've already been doing it -- but you'd hate to go through with furnishing two more places for it to fall through.
I have a 28 unit Studio/Efficiency apartment complex. I rent the units out totally furnished with all utilities. I met someone when I was on an extended RV trip with my family who told me some of the Benefits and success he was having from Airbnb rentals. I had 2-3 vacancies do I decided to copy my Craigs list add to Airbnb for $50 a day or so. I surprising to me I had a booking for the next day within 2 hours or so! Since the. I have learned a lot of Airbnb and have converted 2 of my best units to Airbnb. A little more work, but not a bunch. Airbnb units get about $1,500 per month compared to my monthly rent of $800 or weekly of $275. I have been very happy with my choice to do what you are thinking about doing!
Thanks everyone for the comments. I have decided to go forward. We are furnishing it now and have good confidence that it will do better on short term that the others do on long term.
@charlie price While talking to my management company about making this transition he said that we should think of doing it for the entire building if this goes well. The goal one day is to also invest in a building like you mentioned. Again thanks for the info.
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