Good morning BP!
So I just closed on my first house! I have started fixing up minor things and painting interior to make everything look more modern. This is a 5 bed 3 bath ranch with finished basement. I have the master upstairs with it's own bathroom. Then I have 2 other rooms with a shared bathroom. This house is located about 15-20 minutes from DIA and 5-10 minutes from the UCHealth Anschutz medical campus.
I have been kicking around different ways to rent this place out with me still living there. I am now looking to Airbnb my 3 upstairs bedrooms and then have the whole basement to live in. Before furnishing all of the upstairs rooms, I am looking for some help on this.
Does anyone have advice on Airbnbing 3 bedrooms out of one home? Is this practicle or will it lower the value of the rooms dramatically? Also, looking for some advice on how in demand this area is for Airbnb, the zip code would be 80012. Any advice helps. I got into this home with an FHA loan so my PITI is $2380/month. Just looking to maximize my returns here so I can save up for down payment on property number 2. Any insight is much appreciated!
Do you have an HOA? HOA's are common in Denver, and they frown on AirBNB big-time.
My biggest house is a 3 story with 4 baths. It has 8 beds. It's my hardest house to rent out, because all the occupants have to get along with each other. When I do rent it to a large group, it's a father/son/cousin/brother/inlaw/uncle sort of group. An extended family.
But my tenants are refinery contractors, not people on vacation.
You can look at mashadvisor to get a feel for your market. It's also good just to go on airbnb, vrbo and look at your competition. You can get pricing info, get a feel for occupancy rates, etc. just by looking at other homes.
I have a full time airbnb (3bed/2bath), but it's in a smaller market with only about 30 competitors.
Other revenue can come from "travel nurses." Look on FB for travel nurse groups. These nurses sign 13 week contracts and some times the hospitals will pay them a stipend for housing.
Take good photos, keep your house super clean, and decorate like you would want to live in the space. Add the extra touches such as snacks or beer/wine for your guests and keep your 5 star rating. I just saw one competitor who ended up selling her full time airbnb because she was getting mediocre reviews. (Bad neighborhood...but she had semi-flipped the house...so it looked nice.)
Congrats on the deal, sounds like a good score and I love that zip code for appreciation. Since you'll be living there you can AirBNB according to Aurora's STR rules:
You'll just need to get a business license ($40) and pay 8% tax. As mentioned above you'll want to clear it with your HOA if you have one. I'd look on AirBNB and see if you can find some comparable rooms being rented to get an idea of pricing. Also see how booked up they are to gauge demand. Being on the DIA side of town I'd think this is a good strategy. I have friends doing this in Green Valley Ranch. One thing they complain about is the effort of basically running a hotel (cleaning and washing sheets every day, new people coming in and out all the time, etc.). If the rooms could be rented to long term housemates for an amount that covers your mortgage plus a bit, I'd probably just go that route (house-hack) personally, but if STR is twice as profitable, could be worth the extra effort, just have to compare the numbers. It's easy to find good tenants in Denver and STR seems to work really well for people too so you've got some good options!
Great advice here! Thank you for that link as well. That is super beneficial. I was not aware that I had to get that license. So thank you for the heads up! I was looking at Airbnb just because the profitability, but that is very true on having to do a lot more cleaning.
Taylor, call the airlines out at DIA and ask them for anyone needing a crash pad. they use on a regular basis and you won't have to sign up with Airbnb
Thank you for that tip! The more options I have to fill rooms the better
@Taylor Burns Hey there! I’m looking to invest into a long term rental in Aurora. Do you like the market still? What are your thoughts on long term rental near the hospital? Thx!
I believe there is still a lot of opportunity in Aurora right now. That Anschutz Medical Campus is continuing to grow and will bring in a lot more people. The area is still turning over though. So there are pockets and areas that are still not too desirable. Try to stay further away from Colfax as it gets a bit rougher the closer you get to that street.
I have one house about 10 minutes south of the hospital and finding tenants has not been a problem at all. I would continue to research and reach out to find the best neighborhoods though. I have shifted my focus towards multi-family so my attention has not been too focused on this area anymore as it was a year ago. I hope that helps a bit!
Just following up on @Matthew Carroll 's question. Can you elaborate more on your model? We love East Colfax for the future potential. (We agree that right now there are still some dodgy areas, but with hipster coffee shops like Pablo's moving in, I feel like the bigger money people seem to know what this area will be like soon.)
Are you renting by the room? Or whole house? Furnished medium term doctors/nurses? Would love to see a breakdown of how it's going for you.
Those are some great points for sure! I actually really do like the area over by Pablo's coffee. Running north and south on Syracuse has a lot of potential. That whole space between Lowry and Stapleton is slowly turning over. However as you go east a bit on Colfax between Yosemite and Peoria, I personally would not want to live within 3-4 blocks of Colfax north or south.
I live a bit further away off Peoria and Mississippi. My set up is a 5 bed 3 bath house. I live in the master and have 4 unfurnished rooms that I rent out. I furnished the main areas and the kitchen. I have been doing my leases set up as month to month however, once people move in they tend to stay. I set it up this way for two reasons. First, it is an easy out incase of a non-compatible roommate. In my lease I state that I can give a tenant 30 day notice to leave for any reason. Second, I can ask for a higher rental rate that is justified by the month to month terms since no one is signing into a year long agreement.
Overall, I believe there is a lot of opportunity to be had around the Anschutz Medical Campus. As a five year outlook in my opinion, things in this area will look much better than they do now. It will be a completely new place. As for current time just be in touch with a knowledgable property management company or personally drive the area (day and night) to see how it is for yourself. One street over can make a lot of difference in that area.