Chicago, IL · Member since 2021 · 16 posts · 15 votes
Does anyone run an Airbnb? Would you recommend this option of 'passive' income over traditional RE investing? (traditional referring to wholesaling, flipping, BRRRR, etc)
Real Estate Broker · Hyde Park Tampa, FL · Member since 2019 · 2k+ posts · 3k+ votes
5y
Anyone running a business - which all landlords and investors do - there is nothing passive about it. Wholesaling isn't investing and is illegal in many states. So, let me offer this: vacation rentals in the right market are significantly more profitable than traditional renting. It also comes with a different set of requirements; it's more like operating a hotel than a rental property. Get a bad review and the business takes a huge hit. In my market, flipping is not longer an opportunity; that ship sailed long ago.
I recommend that you drop the method and the lingo - and simply look at what opportunity exists in your preferred market. Be honest with yourself about your skill/expertise level...more people fail in this business than succeed. Know the business. Look for the opportunity. Then you'll be ready to acquire and become a business owner. Again, nothing passive...that's the stuff of fairy tales.
Real Estate Broker · Hyde Park Tampa, FL · Member since 2019 · 2k+ posts · 3k+ votes
5y
Anyone running a business - which all landlords and investors do - there is nothing passive about it. Wholesaling isn't investing and is illegal in many states. So, let me offer this: vacation rentals in the right market are significantly more profitable than traditional renting. It also comes with a different set of requirements; it's more like operating a hotel than a rental property. Get a bad review and the business takes a huge hit. In my market, flipping is not longer an opportunity; that ship sailed long ago.
I recommend that you drop the method and the lingo - and simply look at what opportunity exists in your preferred market. Be honest with yourself about your skill/expertise level...more people fail in this business than succeed. Know the business. Look for the opportunity. Then you'll be ready to acquire and become a business owner. Again, nothing passive...that's the stuff of fairy tales.
Chicago, IL · Member since 2021 · 16 posts · 15 votes
5y
@Patricia Steiner That is all lingo I learned from BiggerPockets books and podcasts. I do appreciate the reply though. I meant passive as in it’s possible to make money while you sleep. That’s why I put it in quotations. Not meant to say it doesn’t require constant work and skill.
Chicago, IL · Member since 2021 · 16 posts · 15 votes
5y
@Paul Sandhu It can be a way to make passive income. Not saying it doesn’t require work, just meaning you can make money while you sleep if you run it well, market it properly, have consistent occupancy and a good management team!
Chicago, IL · Member since 2021 · 16 posts · 15 votes
5y
@Joshua Strickland That’s what i’ve heard through many different sources. I am not entirely sure why a lot of my comments are saying it cannot be passive. How’d you get started?
@Joshua Strickland That’s what i’ve heard through many different sources. I am not entirely sure why a lot of my comments are saying it cannot be passive. How’d you get started?
@Kaitlyn Castillo I did a cash out refi on a long term rental then contacted The Short Term Shop. They introduced me to one of their agents and the rest is history. There’s also a ton of content on youtube now and just reading through this forum helps a ton.
Rental Property Investor · Houston, TX · Member since 2019 · 212 posts · 149 votes
5y
On a rehab property, doing airbnb setup on your own does take a longer time than expected because you have to wait for the contractor to be done with the rehab. The garbage cans get filled up easily with the amazon packages. I went to home depot about 10-15 times a week to get hardware items to do finishing touches on my 1st airbnb unit. Costs of furniture, gas/Lyft/Uber, hiring handymen to assemble furniture takes a lot of money!
Rental Property Investor · Pocono Pines, PA · Member since 2018 · 153 posts · 117 votes
5y
@Kaitlyn Castillo
Short term rentals are high cashflow relative to any other REI, especially if you self manage to start. There is nothing passive about them unless you use a property manager. Even if you use all the best automative procedures, unless you have a CEO or small operation with a handful of properties, you will need to put a significant amount of time into your business.
It is very much like operating a hotel. Just with all the rooms being in different places!
Real Estate Agent · Nashville, TN · Member since 2015 · 21 posts · 56 votes
5y
@Kaitlyn Castillo
Owning an Airbnb or (short-term-rental) can be as “ passive “ as you can make it. It’ll take a lot of solid systems and people you trust. (Mostly your cleaning crew).
If you have a knack for customer service and really like dealing with people, and evaluate a property that you think works as a STR. Go for it!
However, do tons of research about STRs in your specific market. Local taxes, zoning requirements, etc.
I started with Airbnb and moved to Evolve to make it more passive. But it still takes some time. I believe there are management services that will make it almost passive for a fee, of course. I opted to continue because evictions were restricted during Covid. And I didn't want a tenant squatting in my house for free. With a STR, they pay up front and the day they are supposed to leave, the locks change automatically. Likely the next guest will show up a few hours later.
Check your local laws, municipalities are restricting and taxing STRs. If your area is conducive or you are willing to pay the taxes and abide by your local regulations STRs can generate incredible cashflow.
Rental Property Investor · Denver, CO · Member since 2017 · 200 posts · 126 votes
5y
@Kaitlyn Castillo I think the best way to be successful in Real Estate is to find something you like doing and put systems in place. I have 6 Airbnb units.
I did long term rentals previously but didn’t love the tenant interaction. I have a background in hospitality so Airbnb was more my style.
The more units you get the more important it is to establish systems. I spend 5-10 hours per week on the business unless I’m doing a big project. I just purchased a duplex in Gulf shores with The Short Term Shop. I will spend 2-4 weeks over the next 2 months at the property doing updates and refurbishing the property. In the end it is worth it as I think I will double the current yearly earbud by putting in the effort. We are here now and my kids love being at the beach and going to the pool so that is a huge added bonus of vacation rentals. I should earn 20+% cash on cash return.
Rental Property Investor · League City, TX · Member since 2017 · 40 posts · 10 votes
5y
@Kaitlyn Castillo I don’t know if I would use the word passive or more along the lines of just running a business. We are in the process of building six small house in the Texas Hill country. It can be a very profitable business but you have to be very careful what property management companies you use and make sure you are keeping up with your reviews. One bad review can hurt you but you also learn from those reviews so you can make it even more profitable.
Investor · San Francisco, CA · Member since 2020 · 31 posts · 22 votes
5y
@Kaitlyn Castillo definitely not passive, unless you get a property manager to handle everything for a premium. It can still be profitable, but still not passive, as homeowners usually need to be contacted for important decisions.