Airbnb Opportunity in San Diego (Feedback Needed)
Realtor · Denver, CO · Member since 2016 · 162 posts · 37 votes
The opportunity:
7 bed house in North Park, San Diego. 1 shared bathroom per 2 bedrooms. Large communal kitchen, living room, outdoor lounge area. I want to create a coliving community.
The questions:
1). What could I charge per room per night bearing in mind each bedroom shares a bathroom with another bedroom?
2). There is an opportunity to turn 1 bedroom with its own bathroom into a communal area/extra bathroom for the community. You lose a bedroom but you gain a bathroom in case one of the bathrooms is occupied within the shared arrangement. Keep it as a bedroom or turn it into a lounge?
3). Who would you market this to?
4). What channels would you use to market this?
@David LowePM me if you want more details, but I'll try to lay out as much as I can. I have a home that's similar. Used to be owned by a non-profit and they housed 2 people per bedroom so the rooms are relatively large: all 200+ sf and two large closets per bedroom. There are 2 rooms x 1 bathroom upstairs and same layout downstairs. There also is 1 room up and 1 room down with it's own bath (so total 6 bedrooms and 4 bathrooms). 4 of the rooms have their own exterior entrance. The laundry room also has a bathroom so there is another spare bathroom (bathroom #5). Total rent coming in is $5100/month. I rent long term and market on CL almost exclusively. (I also post on a facebook rooms for rent page, but haven't had luck there. I paid for a subscription to market to SDSU students, but that also was a bust as most everyone was looking for a place months out). I'll probably try Zillow, too, for my next vacancy. Given the proximity to SDSU I thought I would get college students, but in actuality all the units are working young-ish adults. I've only ever had one SDSU student, who was a graduate. A couple tenants go to school and work, but neither actually attend SDSU. They are non-traditional students in speciality programs. Leases are month-to-month, with the ask to stay for at least 6-12. In a snapshot I have 2 tenants that are almost 3 years. 2 that are at about 1.5 years, 1 that's almost at a year and 1 that's been there a few months. The trickiest part is that a bad egg ruins it for everyone so I try my best to screen. I have STVRs, too, in my portfolio, but those are A LOT of work and you would need to plan some major investment to furnish each room and keeping things stocked. Being on the hook for 7k/month-- seems very high IMO. To compare - $800 rent breaks out to about $26/night. What is the room rate for that type of property in that location? I can tell you that I have a stand alone 1/1 beach cottage with it's own kitchen, bath, patio space, etc a stone's throw from the beach and there are nights when I'm dropping it to $69 to get it rented. And I'm paying SDGE, cable, internet, linens, toilet paper, etc, etc. Be careful. Is it possible to test the waters on STVR first before furnishing the rooms?
@Colin L. just because I emailed you over the weekend :) This property isn't one that I am making plans for, but maybe one day we'll do an ADU. It definitely has the room in the backyard.
@Michael Baum Yes effectively an arbitrage play. Rough rule of thumb in San Diego is $1k per room. So $7k is obviously high but in line. I appreciate your honest feedback. I am definitely in two minds now.
@Emily Di I do believe my upvote was your 1st. Well deserved! Excellent breakdown of units and yield. Thank you. Marketing was definitely a concern. I think if I owned it, vacancies would be ok. But with a $7k
guillotine hanging above me, vacancies could kill me. If I invested $10k in to furnish for STR, that would also be at risk.
@Wendy Schultz Yes. It's in the balance but at the moment, you can let out your place short term. If that changes, you just need to pay for a certificate to be able to do it. An outright ban will almost certainly never happen because the city figures it is better to make money of hosts than them do it illegally and lose everything.
It sounds like they have wisened up. We pay for permits and pay in room and sales taxes in Wisconsin and Florida so that's nothing new. It's small thinking on a municipality's part to outright ban them. There's lots of revenues to be made for them if they are smart and not overly cumbersome.
@Lia Martinez Sorry for the delay in replying. I noticed that BiggerPockets had removed the post because I hyperlinked to my company (the very last word of a long post!). Ridiculous. Here it is again (with the hyperlink removed haha):
Nice work on getting to 3 and being part of the coliving movement. Loved your detailed explanations of each of the 3 and your ideas. This is greatly appreciated. The big question mark off the bat was the 1 bathroom per 2 bedrooms. That immediately reduces the rate you can command because as you rightly said, nomads are going to expect a private bathroom if they are paying a premium. I also heard from a Boomers group that they need a private bathroom because they need to go more frequently. So a shared scenario is an issue for those 2 demographics. Coliving is a tricky space to be in because you are ultimately fighting the greed of landlords trying to milk the Airbnb cash cow. That said, it will bring community to the US and truly change how we live. That is why I am sticking with it. If you want to connect, please DM me or find me on LinkedIn. Would be more than happy to share what I've learned on my coliving journey so far with Qwerky.