dealing with Air BnB for cute little rental

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dealing with Air BnB for cute little rental

Member since 2020 · 12 posts · 2 votes

Hi all,

I have come across a cute little stone house that is currently set up as an air Bnb rental. present owner is only doing 7 night min`s. making 22K a year. Personally being in a summer tourist town I think cutting that down to 2-3 night min would look more like 32k a year minus cleaning service. My question is really about air BnB. never used them, never dealt with them. No idea if you can really profit from them or are they set to win while you lose? I am intrigued by what seems to be a turn key operation but I am more inclined to consider a two unit long term rental in the same area, thinking less day to day activity and work?

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Paul Sandhu

Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes

If the owner is making money, why would he be selling it? Perhaps there are some rules/regulations on the horizon that will affect the STR market? I don't use Airbnb for my rentals. My online inquiries come from Craigslist. But my market is not a tourist market. It's a refinery town filled with travelling welders, pipefitters, boilermakers and other such ruffians. They chew tobacco in their sleep and have neck tats.

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Paul Sandhu
Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes
6y
If the owner is making money, why would he be selling it? Perhaps there are some rules/regulations on the horizon that will affect the STR market? I don't use Airbnb for my rentals. My online inquiries come from Craigslist. But my market is not a tourist market. It's a refinery town filled with travelling welders, pipefitters, boilermakers and other such ruffians. They chew tobacco in their sleep and have neck tats.
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John UnderwoodPro Member
Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
6y
Using the advertising power of Airbnb or Vrbo will likely bring in more business off setting any hassle for using them.
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Bill Haldenby
OP
Member since 2020 · 12 posts · 2 votes
6y
she is selling because she needed to move some 60 miles away and is doing her own cleaning and checking, finding it to much work. Again I think i have more interest in another more typical property, duplex with two units, but don't want to ignore this one if it made sense. Numbers work, but as i said no experience whatsoever with Air BnB. I'm sure rentals would be summer heavy and again at Christmas with big lull's in spring and fall
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Bill Haldenby
OP
Member since 2020 · 12 posts · 2 votes
6y
Originally posted by @John Underwood:
Using the advertising power of Airbnb or Vrbo will likely bring in more business off setting any hassle for using them.

Guess I am asking what the hassles of them are? beyond their 3% commission

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Patricia Steiner
Real Estate Broker · Hyde Park Tampa, FL · Member since 2019 · 2k+ posts · 3k+ votes
6y
AirBnb is our preferred resource for vacation rentals for a number of reasons. First, they will provide you with the profile of the guest - so you know who they are. And, they do not charge a conversion rate between the Canadian Dollar and US so we have Canadian guests who come back every 6 weeks or so; it makes it an affordable vacation. HomeAway is also been good for attracting older guests whereas AirBnb tends to cater to young professionals and families.
It's easy to set-up an AirBnb account so simply go to
https://www.airbnb.com/help/article/221/how-do-i-create-an-account
and it will give you all the links to get up and running quickly.
It's important to remember that your vacation rental success is tied to your reviews. Before buying the property, search the various sites and see what the reviews have been for it. If the reviews have been mediocre to bad, it could hurt your new business. Also, understanding why the seller is giving up a successful business is important. Be sure to ask for the rental income records; AirBnb gives a screen shot that makes it very easy to know what you're buying. It's also imperative that "everything works really well" - so you'll want an inspection that shows the roof, AC/Heat Pump, plumbing, electrical are all in good working order with plenty of life left.
My best in your new business venture. Do your homework. Read all the vrbo blogs. Look at all comparable listings on all of the sites. You have to know what you're doing.
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Jon Crosby
Investor · Roseville, CA · Member since 2016 · 893 posts · 1k+ votes
6y
@Bill Haldenby You are correct, STRs are definitely more work then a traditional rental, unless you go with a turnkey management provider which will likely gouge you of most of your profits. Airbnb, VRBO, etc, doesn't matter what you use for listings, in the end you are essentially running a micro-hotel and like most businesses you need to optimize systems and processes, make sure your customers (all your customers) are having a 5-star experience and keeping your liabilities limited the best you can. I wrote this article a long time ago you can check out but feel free to ask any specific questions you might have with regards to making the plungs with an STR.
Best of luck!
https://www.biggerpockets.com/...

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John UnderwoodPro Member
Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
6y
Originally posted by @Bill Haldenby:
Originally posted by @John Underwood:
Using the advertising power of Airbnb or Vrbo will likely bring in more business off setting any hassle for using them.

Guess I am asking what the hassles of them are? beyond their 3% commission

No hassles.
I use VRBO and Airbnb.
Vrbo makes me a bunch of money. I get a few Airbnb bookings per year.
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Daniel Schiller
Rental Property Investor · Houston, TX · Member since 2014 · 91 posts · 76 votes
6y
@Bill Haldenby find a great housekeeper to do your turns at a volume discount if you lower the minimum rental period to that level.
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Tony AngelosPro Member
Real Estate Agent · Member since 2019 · 192 posts · 131 votes
6y
Hard to see the downside to this if the numbers work with the current income, assuming it's consistent and not depending on the same families coming year in and out due to the relationship with the host. If it turns out to be more trouble, does it still work as a single family home rental?
Also consider whether or not you will be managing the property yourself. As others have pointed out, STR is a lot more hassle, especially if you're paying a cleaning company every 2-3 days as opposed to every 7 days. Not something to overlook.
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Mark Miles
Rental Property Investor · Philadelphia, PA · Member since 2016 · 541 posts · 715 votes
6y
Originally posted by @Bill Haldenby:
Hi all,
I have come across a cute little stone house that is currently set up as an air Bnb rental. present owner is only doing 7 night min`s. making 22K a year. Personally being in a summer tourist town I think cutting that down to 2-3 night min would look more like 32k a year minus cleaning service. My question is really about air BnB. never used them, never dealt with them. No idea if you can really profit from them or are they set to win while you lose? I am intrigued by what seems to be a turn key operation but I am more inclined to consider a two unit long term rental in the same area, thinking less day to day activity and work?

Its more work but higher revenue & the work can be easily outsourced once you put the right systems in place.
I hire inexpensive offshore PMs who works US hours & speak eloquent English. Mine set door codes, message (or call) guests, schedule cleaners, adjust the thermostat, monitor my cameras, & call a plumber just as easily as a local PM can, for 1% of the cost.

Hire good cleaners, a solid handyman & befriend some helpful neighbors. Then you’re all set!
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Neil Henderson
Specialist · Carolina Beach, NC · Member since 2016 · 390 posts · 496 votes
6y
So, two things come to mind:
1. All proforma's are B.S. until proven otherwise. If you're going to buy this place, ask to see her financials from whatever hosting platform she is using. AirBnB, VRBO, etc all have reports she can download.
2. Double and triple check that the area is not talking about passing laws to ban short term rentals. Call the city. Call the county.
Dealing with AirBnB is mostly a dream. Low fees for the host (for now). They do tend to take the guests side on most disputes, but just go in expect that and you'll avoid a lot of disappointment.
There are a lot of vacation rental owners who are pushing direct booking. Great idea and I encourage any professional owner to do that, but don't expect a lot of your bookings to come from there. Marriott spends millions on advertising and I.T., and they still only get 5% of their bookings directly.
Running a short term rental is about systems, systems and more systems. It's much more like running a business than a real estate investment, though it can very much be both.
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Joseph CacciapagliaBusiness Member
Lender · San Antonio, TX · Member since 2020 · 1k+ posts · 1k+ votes
6y
Running a short term rental is being in the hospitality business; it's much different than being a typical landlord. However, there is a ton of upside if you do it well, and you're in a good market. Some of the things that some first time STR owners don't think about are costs for furnishings, linens, utensils, and the like. Even if you get those with this purchase, be prepared to replace them regularly. Also, if you aren't hiring a manager, you should expect to receive regular questions and requests from your guests. Responding to them in a timely manner is very important, because you will live and die by your ratings on Airbnb and VRBO.

A full service property manager will take a significant portion of your revenue, but they'll definitely earn it. In markets that have a lot of STRs, it's not easy to stand out. Your property should have a theme or design that makes people choose it from the crowd. You might need to provide snacks, coffee, and toiletries. Whether or not you're allowed to provide food will vary by area, but many guests have come to expect something. I know several investors are doing well with STRs, but there are definitely challenges. It is not passive income, if you're doing it yourself.

[email protected]979-218-2286
Joseph Cacciapaglia powered by Morty
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Lauren Kormylo
Rental Property Investor · Phoenix, AZ and Rehoboth Beach DE · Member since 2019 · 1k+ posts · 1k+ votes
6y
I stay in STRs in a beach area where a lot of places rent by the week in the summer. They are booked solid during June-July-August, no vacancies. The rest of the year, they usually have 2 or 3 day minimums. If they cut the summer requirements down to 2 or 3 days like you're thinking of doing, they would have empty days here and there for sure. I've seen that on the calendars of the ones who don't require a full week during the summer. So don't be so sure you can get the profit up by changing that - see if the owner had her summers booked solid.
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Jim Hudelson
Member since 2020 · 34 posts · 19 votes
6y
Air B-n-B is pretty good to work with. They will make some money off of your business but they aren't trying to get a lot of it. Homeaway (VRBO) is more aggressive about getting into your pockets (my opinion). Both of them offer an invaluable service - a marketplace that the majority of renters look at when looking for a place to stay.
If you haven't rented through AirBnB, you should do this. There is no better teacher than experience. It's good to see the process and get a feel for what the guest experience is.
If you buy this house, see if there is a way that the reviews on AirBnB can be transferred over to your listing. Reviews are very important. This is assuming that the reviews are good. You want to see consistent 5 star reviews.
There is quite a lot to learn. You can find good information on this site. Homeaway's Community web site is also a good resource.
It's smart to learn about how some of the scammers in the world work when it comes to vacation rentals.
Spend some time researching rental contracts. Read what others include and why. Having a solid rental contract with your guests is important. Ours is not full of legal-eze. It's purpose is to protect our interests and also to set some expectations for the guests.
Learn about Credit card charge backs. If a guest ever initiates a charge back there are specific rules that you must follow to dispute their claim. Hopefully you never have this happen to you. We haven't in 8 years of renting.
It's a fun business to be in (most of the time).
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Luke CarlPro Member
Rental Property Investor · Tennessee Florida · Member since 2016 · 4k+ posts · 5k+ votes
6y
@Bill Haldenby Some good replies here and several replies from unfamiliar faces which is good but beware they may not have experience.
I’d buy the cottage and the duplex. The Airbnb will be easier to manage in a lot of aspects than the duplex. There’s nothing worse than finding new tenants. That doesn’t exist with Airbnb. And if they suck.... they’re gone in 3 days instead of 3 years.
Podcast Guest on Show From Surviving on $30/Day to 30+ Properties Thanks to Blue-Collar Skills
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Bill Haldenby
OP
Member since 2020 · 12 posts · 2 votes
6y
a fear I have with Air BnB is that some cities around here are thinking of banning them with absent owners. We have had a few shootings at locations and some cities are considering only allowing owner occupied rental. That would screw me as this location will not allow me to be there based on it's size. I am looking at a number of streams for property investment, this was just one
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