I live in downtown Los Angeles and I go up to Big Bear quite a bit. I know this subject has been mentioned here a while back before but I want to start something newer.
I am looking into purchasing a 3 bedroom/2bathroom cabin in Big Bear and put it on Airbnb and/or VRBO. After my downpayment I am looking at a mortgage of $1700/month approx, plus tax and insurance maybe $2100.
I plan on going up there about one weekend a month and rent out the rest of the time.
Anyone here have experience on this that may want to share with me? Is it profitable or break even?
So there are alot more expenses that you have to account for. Utilities including internet and cable/satellite TV, landscaping, consumables, replacing things as they wear out or get damaged, etc. We also do upgrades every year.
Try and account for all these expenses and the mortgage, drop them into a spreadsheet then try and estimate income based on other similar properties listed on Vrbo/Airbnb. Look at their calendars and what their rates are.
This should give you a pretty good idea if you can break even.
Don't forget about having it cleaned and restocked between occupancies. Someone has to do the laundry, make the beds, clean the toilets, clean the kitchen, do the dishes, vacuum and generally make the house clean again. You also have maintenance, changing light bulbs, mowing the lawn, shampooing spilled wine/blood stains out of the carpet. You might have to deal with the police if the renters are throwing a loud party or someone overdoses in the house.
I have a STR in Lake Arrowhead that we purchased in October. The expenses that I didn't fully account for have been STR insurance (almost $400 per month due to extreme fire danger, regular homeowners insurance won't protect you), snow removal (about $200 per month December/January), clearing of lot required by county annually ($250), very high utilities (our Jan-March average for gas and electric this year was 402 per month). The upside has been that we have been rented all but one weekend and are at 100% occupancy for July and August. We do use a property manager who takes 30%, honestly couldn't handle all the day to day stuff ourselves, but when it is all said and done we make a very small profit. We love the property and are planning on it more as a second home for our retirement years and are happy it pays for itself in the mean time. Good luck to you!
@John Underwood thank you. I was considering an average of $300-$400/month on expenses and $700/month minimum during high snow season.
@Paul Sandhu overdose is a little extreme but I am sure it happens! I am trying to get in contact with different groups that handle cleaning and reports. I don’t want to go with a big rental company since they keep a hefty amount of the profits.
@Denise H. Thank you! I am not expecting to make huge profits but let it pay for itself and maybe have some left over by the end of the year.
@Adrian Provenza An overdose isn't that extreme, if you've had to deal with a dead body in an STR prior to the overdose. That happened to me about 6 months before the overdose. With the overdose, he was alive but unconcious and unresponsive.
Question. People keep talking about factoring in cleaning fees, but don't you charge your renters the cleaning fees on platforms like AirBnB?