Is AIRBNB a good idea?

26 Replies

Hello BP community.

AirBnB has been around for almost ten years now. I was wondering if anyone has had much success with them now in 2019.

AirBnB is a great platform and continues to deliver great results for many hosts. The bigger question (in my opinion) should be is AirBnB right for you? Not just you specifically, but anyone who is thinking of entering the short-term rental biz. 

A few questions to ponder: Is your property in an area that attracts travelers, is there a demand? What is the regulatory environment where your property is located - is it legal? Do you have a heart for hospitality? Do you have the time and energy to do it? Running a short-term rental biz, even if one property, is very hands-on. 

I think it's a good idea for hosts to look beyond a single listing platform. AirBnB can work, but VRBO, TripAdvisor, Booking.com - they all deliver results as well. Better to not put all your eggs in one basket.

So yes, AirBnB and all the other listing platforms are very relevant in 2019 - they can and do deliver amazing results. It's all up to the individual host to figure out how to use the platforms as tools to accomplish their goals.

Sure. We have a whole house so I get more from VRBO/HomeAway than AirBNB, but I do get guests from the platform.

VRBO has been around since 1995 and we get most of our guests from there.

@Michael Baum do you list the same space across multiple services? For some reason I thought Airbnb was exclusive. That might just be about contacting renters now that I think about it.

I think so. Not exactly sure what you mean by same space. I listed it on AirBNB and via HomeAway which gets placement on VRBO and Trip Advisor. 

Nothing exclusive really. I thought about going with other sites but haven't done it. Our home is pretty much a single season rental (Summer) and we are nearly full. 

I am going to try some more targeted marketing to bicyclists for the trail in Spring and Fall. Not sure where yet.

Just like Michael, we rent our whole house and do much better with Vrbo.

I'm on Airbnb, Homeaway and a few other similar sites.  Get around 6 responses per year from them.  Craigslist gets me about 50-100 responses per year.  

But I rent to working people, nobody on a vacation.  My tenants are contractors, those guys you see working on the large upright structures of steel at a petrochemical refinery.  Scary looking guys with neck tats that weld and do ironwork.  If you saw them down the aisle of a grocery store, you'd skip that aisle until they were gone.

Most of the year, Airbnb dominates my bookings, though in the summer, it's VRBO/Homeaway.

We've been doing ST Rentals for 4 years and over the course of those 4 years I personally feel AirBnB is continually improving and VRBO's platform is getting less user friendly and they are always finding clever ways to add fees on the user and the guest. I think allot has to do with the fact Expedia owns VRBO and HomeAway and realized too late that STR market is taking market share from their hotel customer clients on their Expedia platform. We are trying to bolster our booking on AirBnB so we can eventually tell VRBO to go you know what!

@Ryan Marrero I have thought about doing Airbnb for one of my properties in Northern NJ, but I realized when I received my first customer request to stay in my property for three nights, that hadn’t set up the logistics and business model to make it run on auto pilot. What ran through my mind was.... since my property is in a gated community, I would need to contact the association and security to let them know guests are arriving and provide the names. I’d have to figure out an easy way for the Airbnb guests to access my unit as I do not have a keypad. I need to clean the unit and provide a map of the entire complex/amenities/entertainment establishments/restaurants nearby. I need to get in touch with a cleaning service when the guests leave. I would say that Airbnb can be a lucrative real estate strategy, but if you’re going into it like I’m planning on doing, be prepared with a scalable business model that allows it run on auto pilot for the most part.

@Ryan Marrero AirBnb and VRBO and Short Term Rentals are such a unique aspect of real estate investing. There are categories in RE Investing: Industrial, Office, Retail, MultiFamily, SFR, Hospitality. Short term rentals don't fall under the purview of hospitality (don't need to be sprinkler'd or have lighted Exit signs), and could be either in the Multifamily or SFR space. They carry the a portion of the expense of hospitality investments while having an increased revenue. For me, the headache, expense and legislative issues that STRs carried was not worth the added income. I turned my 3 STRs back into LTRs.

@Ryan Marrero I'm at $28k for 2019 with only two houses (one mortgaged, one leased from neighbor).

Research the competition in your area, make sure you can provide services that will keep your house booked & able to run with minimal time/effort from you and if you can offer a product that guests would want... Go for it.

I'm setting up a condo next to a major airport in Houston as my next airbnb; had my interior designer stop by yesterday (Monday) to give suggestions on how to add the "touches" that should attract guests.

Hope this helps.

Originally posted by @Ryan Marrero :

Hello BP community.

AirBnB has been around for almost ten years now. I was wondering if anyone has had much success with them now in 2019.

 Yes, very much so. 

It's a booming and growing industry in and of itself. Do it

@John Oden

Excellent advice. Thanks for adding the info about TripAdvisor and Booking.com.

I personally live in a popular tourist location, and have considered only renting my own house out for the max allowed days before taxes are required (14).

This is perfect for when we go on vacation.

But you are right, it is a lot of work to clean and then over your house. Makes me appreciate the maids at hotels a lot more.

I am never really comfortable in a niche type market but this one has really taken off.  I don't do them but if I was going to , I would make sure the numbers work on a normal rental basis first and then ride the air bnb train for as long as the market allows full well knowing the B plan works too.

Arbnb and platforms like that are great tools in collecting more than long term lease. Check with your city to if it’s legal in your city. Many local cities are banning short term rentals recently. Hotel lobby is using homeowners to get these short term rentals banned in local level.

If you have people you trust to clean, and potentially kick people out, shut down parties and say I'm sorry to your neighbors then go for it. 

It is so crazy expensive to run one and If you aren't putting dozens of bunk beds in your place and charging per head the cash flow can end up being less than renting especially during off season. Plus people criticize you and you place every day which gets emotionally tiring.

There are not enough full service management companies doing a decent job. My source at air bnb says they will be rolling out their own management service soon.

Originally posted by @Ryan Marrero :

Hello BP community.

AirBnB has been around for almost ten years now. I was wondering if anyone has had much success with them now in 2019.

 I lease a good chunk of 2 of my buildings to someone who then leases them on airbnb.  It must work for him as he's able to rent them for me at market rate and then turn around and make his profit. 

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Yes it is a great investment vehicle. I am trying to love Verbo as much as Airbnb but still struggle. I can handle that their fees are more expensive for hosts but I haven’t been able to figure out a formula to adjust my rate accordingly. Airbnb is straightforward for hosts: nightly price less + cleaning fee - 3%. It’s not that clear for me on verbo and I price it much higher there.
What am I missing? I have a whole house but admittedly, I don’t encourage full weeks by offering a big discount. Is that it? Do folks who love verbo mostly book weeks?

@Cody L.

Thank you for your answer. There are several hosts who call what your tenant does Airbnb arbitrage and have strong opinions about it, for and some again Can you tell us what you like most about renting to him? And does your lease have certain clauses that a LTR lease might night? Maybe language like 6 months advance notice of non-renewal, etc. 

@Ryan Marrero I'm currently organizing a Short Term Rental Management Company

Originally posted by @Shane Tice :

If you have people you trust to clean, and potentially kick people out, shut down parties and say I'm sorry to your neighbors then go for it. 

It is so crazy expensive to run one and If you aren't putting dozens of bunk beds in your place and charging per head the cash flow can end up being less than renting especially during off season. Plus people criticize you and you place every day which gets emotionally tiring.

There are not enough full service management companies doing a decent job. My source at air bnb says they will be rolling out their own management service soon.

You seem to know a lot for just 3 posts on this site, and I do not mean that in a demeaning way.  

We have had STRs (a small duplex) since 1999 (not on AirBnB). Initially the profit was not that much higher on the STR than if it were a LTR and we had periods (including the Great Recession) were we converted back to LTR during the school year and only STR during the summer.

Today the STRs are virtually 100% occupied year round and bring in significantly more than they would as LTRs.  They have a PM that takes care of everything except repairs.  The PM has their own website for bookings, deals with the tenants, cleans and inventories between tenants, etc.  They get paid well but I could not imagine us doing it ourselves and it has been very profitable. 

My recommendation for STRs is to hire out the tasks. You do not want to be the maid. You likely do not want to deal with tenant questions in the middle of the night on how to get the WIFI or cable TV to work. You really do not want to deal with the party that is breaking noise curfew rules late at night. Consider using a PM but realize that they will get paid well (ours gets over $1K for each unit (over $2K total) - total rent averages to about $16K/month). These are little places (my guess is 600') that do not take long to clean but I could not have cleaners there between every tenant change, deal with tenant questions/issues, etc. Therefore the PM cost is just the cost of having the STR.

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