Real Estate Agent · Jacksonville, FL · Member since 2015 · 1k+ posts · 1k+ votes
Greetings BP
I have been looking at AIRBNB. Has anyone been able to scale an AIRBNB business? There has been a lot of chatter on BP about it. I am interested in hearing from anyone whose is doing it in scale and making money 5+ units.
I have seen a lot of XLS that at 50% rental you are $xxx profitable. What is the reality of those assumptions? You have all the traditional costs of owning RE, roof, plumbing, electric. Additionally, you have a complete house full of furnishings. Taken one step further instead of having one tenant you have 50 in a year?
It seems to me that you would have to do it full time to effectively manage it. Using a management company could be tough or really expensive.
Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes
7y
I made $0.00 this year from Airbnb or any other vacation website. But I've had about 75% occupancy on average with my STRs. Sometimes it's 50-60 percent. Other times it's 90-100 percent. So it averages around 75%.
My renters are refinery contractors. Welders, pipefitters, boilermakers, electricians and the like. Big burly scary looking guys with neck tats that drive jacked up 4x4s. They smell like diesel fuel and chew tobacco in their sleep. You'd avoid the Wal Mart aisle if you saw one there. I'd punch him in the arm and say "What's up mofo?" If he saw me in a bar, he'd send the waitress with the most cleavage over to my table to deliver a round of drinks. I decorate my STRs like Hugh Hefner would decorate his own place.
Craigslist, word of mouth and repeat customers are how most of my places get rented. 23 STRs, 83 beds. All are 3-8 minutes away from my house, I self manage. It's a full time job. My part time job is working at a medical clinic doing pre-employment drug screens for contractors coming here to work at the refinery, a good way to meet potential tenants My wife keeps the STRs clean, that's her full time occupation.
Over here in the Nashville market, competitive Airbnbs are killing it! All those bachelors and bachlorettes need a place to stay! As people have said above though, it is a very active type of investment. But, a minimum wage assistant can go a long way in helping to manage the associated grunt work and still take advantage of the outsized returns. Just be prepared for some minor damage to the property if you will be investing in a place where parties are likely to happen! I'm more than happy to answer any other questions you might have, just shoot me a DM!
Over here in the Nashville market, competitive Airbnbs are killing it! All those bachelors and bachlorettes need a place to stay! As people have said above though, it is a very active type of investment. But, a minimum wage assistant can go a long way in helping to manage the associated grunt work and still take advantage of the outsized returns. Just be prepared for some minor damage to the property if you will be investing in a place where parties are likely to happen! I'm more than happy to answer any other questions you might have, just shoot me a DM!
Newbies: Don't get sucked in to Nashville cash flow hasn't existed for 7 years and Airbnb is all but illegal. Not impossible but you REALLY need to know your stuff and be willing to spend time at the court house.
Rental Property Investor · Boston, MA · Member since 2019 · 1 post · 1 vote
7y
@Lesley Resnick I was a property manager for a company that owned 20 units in the Boston area and they did well in the urban areas making most of their money in the summer months. Personally It seemed the wear and tear was a lot more than FTR. A lot of people visiting the city for a few days with the intention of partying every night and staying in a place that isn't there's doesn't always get you the most responsible and respectful guests. There's definitely a lot of moving parts with STR and turnovers but it's more than manageable if you have the right systems and know what you're getting into.
This thread has been really helpful. Thank you all. So it is overwhelming at 50% occupancy there is money to be made.
The part I am still struggling with is the management. I would not want to do it myself. I am busy working with other investors and running my own investments. It would be tricky to start building out a large enough short term rental portfolio.
Seems like all the little tasks would eat up a lot of time
Cleaning
Inspecting the unit for damage
Check in check out, Keys
Is anyone leveraging technology to mange their properties?
I've got a day job, 17 doors, a family, and I've run 24 marathons. If you don't have "time" to "self manage" an str, then it's probably not going to work for you. PMs generally eat up all of the profit.
The good news management is nothing more than a few phone calls and texts per week after the first month or so of learning curve. It's the best part of STR. You can do it from anywhere in the world in just a few minutes a week, IF you're in the RIGHT market.
@Lesley Resnick while everyone is saying that AirB&Bs in urban markets don’t work, people are making money in Seattle by renting out their homes on AirBnB. People rent them when they come to town to visit for weddings, business, etc
It's not sustainable. When you're in a city, with neighbors, eventually those neighbors get tired of the late nights and puke, and they call the cops. Next thing you know its illegal. It can be done. It is being done. But I prefer my vacation rental investments are made in VACATION markets.
My market gets 13 million tourists per year and has a population of 50,000. Those 50,000 rely on my and my competitors properties to make a living. Plenty of regular jobs in Seattle.
My market gets 13 million tourists per year and has a population of 50,000. Those 50,000 rely on my and my competitors properties to make a living. Plenty of regular jobs in Seattle.
My market might get 13 tourists a year and has a population of 9,500. Those 9,500 rely on the refinery here to keep this town alive. The city sells the refinery electricity. The refinery uses more electricity than everything else (commercial and residential), and it's by far the largest employer (800). They also keep the local motels, camp grounds and restaurants afloat with the contractors that come here to work (plus my 23 STRs with 83 beds).
Flipper/Rehabber · Waianae, HI · Member since 2014 · 37 posts · 8 votes
7y
@Lesley Resnick Me and my wife own two and looking for a third.The majority of the work is cleaning the units and laundry . The responding to guest through e-mail she does using her phone from anywhere.The only thing we see outsourcing is house keeping and laundry. Pertaining to the where in tear from our experience it’s worse when you have one tenant constantly using the unit then 50 tenants using it throughout the year.
Rental Property Investor · Dallas, TX · Member since 2019 · 22 posts · 13 votes
7y
I'm only about 1.5 years in, so I'm still pretty new to it all. We have one STR downtown Dallas TX and we're about to launch another in North Dallas. I'm guessing our cash flow is not nearly as good as people in true vacation rental markets, but it is wayyyyy better than we'd get renting traditionally. We write our listings up with discounts and things in place to attract mid term renters (traveling nurses, contract workers, IT people, etc). We do get some people who are truly on vacation as well, but having most people book for 1 week to 2 months ensures we don't get the party crowd. We have strict rules against parties in our place. It's definitely more work than our traditional rental, but it's not crazy. We both work full time jobs and basically we clean the unit ourselves when we have time and hire cleaners when we don't have time.
Again, I'm pretty new to it all so not an expert! However, I think you can do well in urban markets if you find the right niche. 100% of our bookings have come from Airbnb in the last 1.5 years. Not really sure why that is... Maybe our price point or location.
Oak View, CA · Member since 2016 · 19 posts · 3 votes
7y
I have had a STR on airbnb for a year now and I agree that some of the most difficult parts about it are doing laundry and removing a large groups 3 or 4 day long amount of trash, so it's not an overwhelming amount of labor and for the most part the guests are respectful of the property/rules. The key is to find someone responsible to clean it and get it ready for the next group. Also, it may help to stand out from other short term owners by offering something they don't. I allow for 16 guests and that helps me get more bookings.
@Lesley Resnick Definitely. I was managing 6 Airbnbs. Making 7 G'S a month in Denver. the str license changed and I'm down to one now. So make sure you get your str license and look up the str laws in the city. Denver you can only have one str. And it has to be your primary residence. I'm looking to get more in other city's.
Crystal have you.looked at Colorado Springs? I'm in Castle Rock and looking to invest there. They are more friendly to STR
Rental Property Investor · Member since 2019 · 33 posts · 78 votes
7y
@Lesley Resnick
My wife and I have 3 small cabins in a very busy tourist town. We're at 95% occupancy almost exclusively through Airbnb. With a good cleaning/maintenance company (which is absolutely key) my wife spends an average of ~2 hours/week handling bookings and questions remotely. After all expenses those 3 will clear us 70k this year.
Realtor · Tucson, AZ · Member since 2018 · 55 posts · 18 votes
7y
At 50% occupancy, we have essentially erased our mortgage on a 500k property, and this is a simple house hack of our primary residence. We live up top and rent the 2-1 MIL below.
We have a unique spot close to a major international airport (SeaTac). So we are neither a vacation destination nor in the midst of a massive urban area.
And this was only our first month. Establishing credibility and gaining reviews to substantiate it is half the battle.
I’d say know your market and what clientele you’re trying to serve and go for it. Legalities obviously need to be known as well, but if you’re running numbers on a prop I would do so as if you were going to place LTR in there.
Rental Property Investor · La Quinta, CA · Member since 2014 · 1k+ posts · 779 votes
7y
Occupancy is a very, very poor metric to discuss with these generalities. There are markets you can make lots of money at 35% occupancy, and markets you can count on losing money if you aren't over 75%. Same goes for different types of properties. Want to raise occupancy? Drop your prices big-time. Doesn't mean you will make more money.
Developer · OAKLAND, CA · Member since 2013 · 29 posts · 10 votes
7y
@Julie McCoy - would love to y’all with you about how you got your rentals. I have one and want to be independent soon. I have ideas about overseas spots.
Rental Property Investor · Ithaca, NY · Member since 2015 · 1k+ posts · 1k+ votes
7y
@Meir Greenblatt
You got it man, can I borrow the money to hire these people? Haha just kidding. To be honest, if I had more bnbs I’d hop on hiring more people. I have one active BnB now, so hiring employees is not sustainable. Now, 5 Bnbs will suffice for a cleaning lady. 35 bnbs might suffice for hiring a manager depending on my stress level. AirBNB makes managing so easy, it’s not like managing long term tenants.