To Airbnb or not to Airbnb?

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To Airbnb or not to Airbnb?

Christine Sierra
Rental Property Investor · St Augustine, FL · Member since 2020 · 36 posts · 32 votes

I’m very close to purchasing my first rental property, but can’t decide whether to go with furnished rentals or Airbnb.

I know a successful Airbnb can generate more income, but is this a good time to jump in to that market being that vacancy rates are so high? I have my eye on a few properties in Kissimmee for Airbnb, but their recent vacancy rate is frightening. Any hopes of this turning around in the near future?

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Mike Anderson
Rental Property Investor · Clayton, GA · Member since 2020 · 185 posts · 152 votes
6y
Originally posted by @Paul Sandhu:
Originally posted by @Christine Sierra:

@Paul Sandhu

Have you had an issues with or the need to evict? 

If so, how would you handle given the current situation?

Yes, I had 2 psychotic mutts that decided they didn't need to pay rent after 8 months. I decided to disconnect their electric and water, then I gave them the phone number of a person that was starting their very first STR. Got rid of my problem tenants and got rid of my competition. They stiiffed her too. One of the psychotic mutts ended up in a mental institution and his wife divorced him while he was in there.

There are days I come to bigger pockets not to learn about real estate, but to just see what in the heck you are up too. You need a TV show with all this stuff.

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  • Paul Sandhu
    Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes
    6y

    What is your market like?  There is no tourism in mine, and I get zero rentals a year from Airbnb even though I have an ad on there.  There is an industry in my town that utilizes traveling workers for short term jobs.  I make a killing off of Craigs List with the rentals.  

    If you don't have much experience doing an Airbnb property, you'd probably be better off doing just a furnished rental.  Something tells me that it would be difficult for you to give someone a jump start, change a flat tire, encounter an intruder in you property, encounter a dead body in your property, encounter an overdosed person in your property, deal with escaped rattlesnakes, deal with prostitutes, etc.  When this stuff happens to me, I just deal with it and make a mental note to tell the story about it on short term rental forum on the internet.  

    0Reply
  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    6y

    Why would you furnish a rental if not to do STR?

    0Reply
  • Paul Sandhu
    Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes
    6y
    Originally posted by @John Underwood:

    Why would you furnish a rental if not to do STR?

    I think she means just the bare essentials.  Appliances, and maybe some furniture and bedding.  The tenants would be putting the utilities in their own name.  Something like this would work for college students.  

    0Reply
  • Christine Sierra
    OP
    Rental Property Investor · St Augustine, FL · Member since 2020 · 36 posts · 32 votes
    6y
    Originally posted by @Paul Sandhu:

    What is your market like?  There is no tourism in mine, and I get zero rentals a year from Airbnb even though I have an ad on there.  There is an industry in my town that utilizes traveling workers for short term jobs.  I make a killing off of Craigs List with the rentals.  

    If you don't have much experience doing an Airbnb property, you'd probably be better off doing just a furnished rental.  Something tells me that it would be difficult for you to give someone a jump start, change a flat tire, encounter an intruder in you property, encounter a dead body in your property, encounter an overdosed person in your property, deal with escaped rattlesnakes, deal with prostitutes, etc.  When this stuff happens to me, I just deal with it and make a mental note to tell the story about it on short term rental forum on the internet.  

     I can honestly say I haven't thought of any of those things happening until your post! 

    0Reply
  • Christine Sierra
    OP
    Rental Property Investor · St Augustine, FL · Member since 2020 · 36 posts · 32 votes
    6y
    Originally posted by @Paul Sandhu:
    Originally posted by @John Underwood:

    Why would you furnish a rental if not to do STR?

    I think she means just the bare essentials.  Appliances, and maybe some furniture and bedding.  The tenants would be putting the utilities in their own name.  Something like this would work for college students.  

     yes, this is exactly what I would be doing.

    0Reply
  • Paul Sandhu
    Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes
    6y
    Originally posted by @Christine Sierra:
    Originally posted by @Paul Sandhu:
    Originally posted by @John Underwood:

    Why would you furnish a rental if not to do STR?

    I think she means just the bare essentials.  Appliances, and maybe some furniture and bedding.  The tenants would be putting the utilities in their own name.  Something like this would work for college students.  

     yes, this is exactly what I would be doing.

     No HDTV, no linens, no towels. Get a washer, dryer, fridge, stove, cooking and eating utensils, plus whatever furniture and bedding you can get at an auction or garage sale.  Decorate it with kittens and ponies, or decorate it like Hugh Hefner's mansion.  That'll determine who your rent to.  I went with the latter.  I rent to ruffians.  There is more money with ruffians than there is with kittens and ponies.

    1Reply
  • Christine Sierra
    OP
    Rental Property Investor · St Augustine, FL · Member since 2020 · 36 posts · 32 votes
    6y

    @Paul Sandhu

    Have you had an issues with or the need to evict? 

    If so, how would you handle given the current situation?

    0Reply
  • Paul Sandhu
    Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes
    6y
    Originally posted by @Christine Sierra:

    @Paul Sandhu

    Have you had an issues with or the need to evict? 

    If so, how would you handle given the current situation?

    Yes, I had 2 psychotic mutts that decided they didn't need to pay rent after 8 months. I decided to disconnect their electric and water, then I gave them the phone number of a person that was starting their very first STR. Got rid of my problem tenants and got rid of my competition. They stiiffed her too. One of the psychotic mutts ended up in a mental institution and his wife divorced him while he was in there.

    0Reply
  • Christine Sierra
    OP
    Rental Property Investor · St Augustine, FL · Member since 2020 · 36 posts · 32 votes
    6y

    @Paul Sandhu

    O M G 🤣

    4Reply
  • Mike Anderson
    Rental Property Investor · Clayton, GA · Member since 2020 · 185 posts · 152 votes
    6y
    Originally posted by @Paul Sandhu:
    Originally posted by @Christine Sierra:

    @Paul Sandhu

    Have you had an issues with or the need to evict? 

    If so, how would you handle given the current situation?

    Yes, I had 2 psychotic mutts that decided they didn't need to pay rent after 8 months. I decided to disconnect their electric and water, then I gave them the phone number of a person that was starting their very first STR. Got rid of my problem tenants and got rid of my competition. They stiiffed her too. One of the psychotic mutts ended up in a mental institution and his wife divorced him while he was in there.

    There are days I come to bigger pockets not to learn about real estate, but to just see what in the heck you are up too. You need a TV show with all this stuff.

    5Reply
  • Mike Shemp
    Rental Property Investor · Stewartsville, NJ · Member since 2016 · 418 posts · 280 votes
    6y

    I think it depends on your market.  

    If you are in a vacation destination, I would do AirBnB and VRBO and link the calendars, while at the same time building your online social media presence to help advertise it and get direct bookings.

    If you are not in a vacation destination, I would go with offering a furnished rental.

    Mike

    2Reply
  • Juan Correia
    Rental Property Investor · Portugal · Member since 2018 · 61 posts · 26 votes
    6y

    I'm in an extremely seasonal market, doing STR. Thing is the high-season income really compensates the low seasons vacancy... It really is about working the numbers on a yearly bases for me.

    2Reply
  • Christine Sierra
    OP
    Rental Property Investor · St Augustine, FL · Member since 2020 · 36 posts · 32 votes
    6y
    Originally posted by @Juan Correia:

    I'm in an extremely seasonal market, doing STR. Thing is the high-season income really compensates the low seasons vacancy... It really is about working the numbers on a yearly bases for me.

    Where is your STR if you don't mind me asking?

    0Reply
  • Christine Sierra
    OP
    Rental Property Investor · St Augustine, FL · Member since 2020 · 36 posts · 32 votes
    6y

    @Mike Shemp

    Thanks for your feedback!

    0Reply
  • Bob Hutton
    Merritt Island, FL · Member since 2016 · 12 posts · 3 votes
    6y

    @Christine Sierra we have a couple Airbnb’s down near Cocoa Beach. It’s been slower the last few months, but we do get a couple stays a month. Basically just enough to stay afloat right now. St. Augustine seems like a larger tourist destination and wedding destination. We are going up for the second wedding within a year. If you do a nice job decorating and price it right, I think Airbnb could be very lucrative up there.

    2Reply
  • Juan Correia
    Rental Property Investor · Portugal · Member since 2018 · 61 posts · 26 votes
    6y
    Originally posted by @Christine Sierra:
    Originally posted by @Juan Correia:

    I'm in an extremely seasonal market, doing STR. Thing is the high-season income really compensates the low seasons vacancy... It really is about working the numbers on a yearly bases for me.

    Where is your STR if you don't mind me asking?

    In Portugal (Europe), in the south - ALVOR in the Algarve

    0Reply
  • Marc RiceBusiness Member
    Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2018 · 2k+ posts · 1k+ votes
    6y

    @Christine Sierra Analyze other listings that will be similar to yours. Airdna.co provides some good data on the metrics.

    Smaller units 1bd/studio do well for us with Airbnb but we don’t have traditional vacation rentals in a touristy spot - all are in Columbus, OH Metro.

    [email protected]614-363-2787
    Marc Rice | Investor Friendly Agent at Reafco Tailwind Team574 Reviews
    WebsiteView Page
    2Reply
  • Mikael Winkler
    Rental Property Investor · Columbus, OH · Member since 2015 · 344 posts · 258 votes
    6y

    @Marc Rice have you seen STR begin to bounce back in here in Columbus? Seems like a lot of operators got taken out, but the ones with solid fundamentals, running them as a business, have survived.

    Also, with limited entertainment options in the Short North/Downtown right now, have you seen STR in those types of locations remain a bit dipped?

    0Reply
  • Austin Steed
    Real Estate Agent · Columbus, OH · Member since 2016 · 593 posts · 664 votes
    6y

    @Marc Rice are you seeing similar number in Columbus pre covid? 

    And if not what vacancy rate would you recommend writing for pro formas?

    0Reply
  • Brandon GoldsmithBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2020 · 1k+ posts · 1k+ votes
    6y

    A short term rental that is furnished might not be a bad way to start off, just including the basics. There was already some good advice given on how to analyze if you should continue with a traditional Airbnb. You know your market best so, I would just decide how the tourism rates are holding up given the circumstances. Good luck! @Christine Sierra

    [email protected]614-963-3340
    1Reply
  • Marc RiceBusiness Member
    Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2018 · 2k+ posts · 1k+ votes
    6y

    @Mikael Winkler @Austin Steed

    We’ve been seeing normal performance here since July. From May - June we flipped on our lever to longer term multi-week/month stays to play it conservative because we weren’t sure if the City would temp ban STRs. During that time we were just around what normal market rent would’ve been for that studio/1bd.

    Since then we’ve been back to normal and been killing it as usual with our units well above market rent. We have 25+ studios/1bds only in Short North/Ohio State campus. We like to do smaller units in A class neighborhoods as of now because we can always beat the market rent for our clients. Slow season is Dec - Feb, as of now seeing no slowdown in normal Sep - Nov but we’ll see without football how much we are losing from normal football season.

    Our goal is to beat the market rent. If we can’t near-guarantee that for our clients we won’t touch it. Hope that helps. Make sure you have a quality unit and know how to get it filled before going into it.

    [email protected]614-363-2787
    Marc Rice | Investor Friendly Agent at Reafco Tailwind Team574 Reviews
    WebsiteView Page
    1Reply
  • Robert EllisBusiness Member
    Developer · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes
    6y
    Originally posted by @Mikael Winkler:

    @Marc Rice have you seen STR begin to bounce back in here in Columbus? Seems like a lot of operators got taken out, but the ones with solid fundamentals, running them as a business, have survived.

    Also, with limited entertainment options in the Short North/Downtown right now, have you seen STR in those types of locations remain a bit dipped?

    Started seeing things pick up about a month and a half ago for STR in Columbus, like you said the ones running them as a business are still around and benefiting from the decrease in available listings.
     

    [email protected]786-494-6766
    Section 8 Launch52 Reviews
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    3Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    6y
    Originally posted by @Christine Sierra:

    I’m very close to purchasing my first rental property, but can’t decide whether to go with furnished rentals or Airbnb.

    I know a successful Airbnb can generate more income, but is this a good time to jump in to that market being that vacancy rates are so high? I have my eye on a few properties in Kissimmee for Airbnb, but their recent vacancy rate is frightening. Any hopes of this turning around in the near future?

    My airbnb in Columbus, Ohio has been doing great. I am in the process of turning each unit in the 4 unit into an airbnb 

    [email protected]614-541-8475Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals
    Reafco512 Reviews
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    2Reply
  • Stephen E.
    Rental Property Investor · Member since 2020 · 172 posts · 110 votes
    6y

    @John Underwood there are lots of reasons to furnish a rental and not do it as an STR. Some markets do well with furnished rentals and the premium is high enough to justify it. Sometimes you want to do corporate housing or mid-length housing for 3 to 6 months for a variety of reasons, but you don't want to do weekly turnover. It depends on the market and your plans.

    1Reply
  • Christine Sierra
    OP
    Rental Property Investor · St Augustine, FL · Member since 2020 · 36 posts · 32 votes
    6y

    I have a friend who does furnished rentals for a minimum of 6 months and does really well. Her rentals are all occupied for the most part with decent tenants (nurses, military families, health care professionals). Diligent screening of course helps.

    My only concern was running into the issue of a non paying tenant and the eviction halt that is now implemented.

    1Reply
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