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.
Does anyone run an Airbnb? Would you recommend this option of 'passive' income over traditional RE investing? (traditional referring to wholesaling, flipping, BRRRR, etc)
Kaitlyn,
I run all 4 primary types of rental property investments.
1. Live in house hack 2. Long term rental 3. Rent by the room 4. Short term rental.
If you want the highest returns, STR is probably the best way to go but you have to choose the right market. I'm 15 minutes from Disney World so I have all 4 options available to me and STR in particular is doing very well down here. A lot of time was put in up front to get the airbnb going, but once you have a system in place and the right people to do cleaning and answer guest questions, I'd say your looking at around an hour a week per property. 5 minutes here and there is really all it takes my wife and I now. We manage it ourselves. If you paid someone to handle everything for you, then you lose out on 20% of the profit for the PM but its completely passive.
Hope this helps you out. If you have any specific questions feel free to reach out.
Real Estate Investor · Brooklyn, NY · Member since 2017 · 65 posts · 39 votes
5y
@Kaitlyn Castillo
I own 5 Airbnb’s and there is nothing passive about it unless you have a manager on the ground. I do ALOT of BRRRRRs as well but it’s two totally different investments.
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
5y
Piling on, I'll add to the not passive crowd.... :-) I've owned a dozen businesses over my career and this is just another....similar in most ways to all the others. I've done LTRs and now have 2 STRs and this is waaaay more profitable and although the hands-on nature of it can be time consuming, I'd say that over the course of a year you actually spend less time/money because you have your eyes and hands on the property a couple times a week. I would NEVER go LTR again.
Of course this means getting properties that will actually work as a STR. A STR can be a LTR, but not all LTRs can be a STR. You need 1) great location, 2) in a desirable city or area 3) with a bit of quirkyness or pazzaz that sets it apart and 4) you should be willing IMO to get in there yourself and do it all.
I agree with the thought that there is no concept of 'passive' income so to speak. But overall I will say this that there is growing frustration with ABB, the quality of service (or lack thereof), higher fees and rising costs of renting an ABB. This at a time with hotels are lowering prices, providing better service, more amenities. This is an existential threat for ABB's if they do not figure out a good strong value prop for their guests.
Rental Property Investor · North Fork, NY · Member since 2016 · 1k+ posts · 631 votes
5y
@Matt Nico Who are you getting to answer guest questions if your managing yourselves and what’s the cost to you? @Berenger Greer How many guests have you hosted and how many times has what you described happened?
This at a time with hotels are lowering prices, providing better service, more amenities. This is an existential threat for ABB's if they do not figure out a good strong value prop for their guests.
Hotels can lower their prices all they want. People are starting to figure out that for a few more dollars, they can have their own little house with a kitchen separate beds, back yard, etc.....
And the STR market has been primarily younger folks to this point (in my experience) I'm seeing more and more 50s/60s/70s folks staying at their first STR and marveling at the concept. They'll never go back to a hotel. It is the hotels that are in trouble, not STRs.
Property Manager · Atlanta, GA · Member since 2020 · 75 posts · 38 votes
5y
@Nancy Bachety Help operate 4 in woodstock Georgia, as well as over 200 corporate leased 3/6 month rentals in Atlanta. Seen crazy things. People ordaining houses, intentionally creating mold issues, illicit activity in terms of trafficking, lots of damaged walls and carpets with very little room to pursue.
Though it’s not beach.
if I can’t properly screen and hold the tenant liable in a case of money owed, I am not willing to lease to them. Corporate leases under corporate names as well, I still take lots of caution, name of the game is knowing who is in there to protect your investment and quite honestly the community around you.
Contractor · Orlando, FL · Member since 2021 · 12 posts · 4 votes
5y
@Kaitlyn Castillo
I run 3 different Airbnb’s
It’s important to have a team or connections or a customer service background.
But I use virtual assistances to do all the paperwork, and I have empowered my employees that look after the properties to find cost savings to make a bonus per quarter.
I currently net 3 thousand per property
It’s not totally passive but if you set it up correctly you only get the code red calls…. I do it all from my phone while working full time.
Rental Property Investor · North Fork, NY · Member since 2016 · 1k+ posts · 631 votes
5y
@Matt Nico I know. You said you have good people to clean and communicate so I was curious if you have your cleaner do that part. It’s often time consuming but establishes the guest-host relationship which I believe helps with care, respect, etc.
@Berenger Greer. Those aren’t typical Airbnb’s. 3-6 month corporate rentals aren’t in the same league. And what you describe is hopefully no where near 20% of bookings either. Sorry for your bad experiences though. Thanks for clarifying.
Rental Property Investor · Columbus, OH · Member since 2019 · 11 posts · 11 votes
5y
@Kaitlyn Castillo some people on here just want to act smarter than everyone else. Here in hocking hills Airbnb’s make a killing, but they are very hard work. Once you get enough of them you can have systems run your business instead of you running it! But those first couple is a full time job !
Rental Property Investor · Round Rock, TX · Member since 2019 · 246 posts · 159 votes
5y
@Bruce Woodruff I partially agree with you. We have an STR. It's doing well in a good location. Lots of STRs in our area and a few hotels as well. When our unit is full and we want to stay in the area we usually pick a hotel over an AIRBNB because of all the added fees.
Investor · CLT · Member since 2021 · 17 posts · 4 votes
5y
@Kaitlyn Castillo have you started to analyze the different types of deals yet? If so, let that be your guide.
I’m in the process of closing on a single family home now, the numbers work as a long term rental but I’m going to try the vacation rental because I could 3x the monthly revenue and I think it’s in a market that will support it.
You need to be realistic with how much time and effort you are able and willing to spend on the property. I’d say a long term rental is the most “passive”.
New to Real Estate · Columbia, MD · Member since 2017 · 32 posts · 8 votes
5y
@Bruce Woodruff
Great point about the hotels being in trouble. My good friends who are successful STR'ers have the theory that it's the big money from hotels that are lobbying in certain areas to ban STR's. So many obstacles to contend with.
Real Estate Agent · Colorado Springs, CO · Member since 2017 · 224 posts · 201 votes
5y
@Kaitlyn Castillo I have three STRs in Colorado Springs and we’ve been solidly booked! For me it is about 98% passive as I have the best management team in the world! I’m able to focus on my real estate business and only get involved in the STRs if a major decision or repair needs to happen. I have a long term rental as well and I have to say from my first hand experience the STRs are much much more profitable. Always have a back up plan though as rules and taxes and as we’ve seen, the whole world can change in the blink of an eye!
I speak as someone who extensively used ABB but found the experience well short of my expectations. There are hotels now that offer kitchens, clean towels, housekeeping, security, front desk, concierge services all much cheaper than a dingy ABB where the owner is cutting corners to keep up his rental payments and ABB fees. Unfortunately that is a reality. The biggest value of an ABB used to be price but that is eroding fast.
Investor · Colorado Springs · Member since 2020 · 53 posts · 31 votes
5y
@Robin Searle would you mind sharing your STR rental management contact info?
I have 4 homes in COS, 1 is my primary and 1 is a LTR. The other 2 I am considering for a STR. My main concern is the cost to furnish the homes is something I'm not sure I want to spend on. Obviously a large initial cost in the beginning.
@Robin Searle would you mind sharing your STR rental management contact info?
I have 4 homes in COS, 1 is my primary and 1 is a LTR. The other 2 I am considering for a STR. My main concern is the cost to furnish the homes is something I'm not sure I want to spend on. Obviously a large initial cost in the beginning.
The cost to furnish is substantial. However, this is an area you do not want to skimp. I have found my properties are sought after due to the level of amenities we place in them, but I went from $900 a month in income (of course with no additional expenses) to over $3000 a month. If you approach your commitment to STR with a long-term mindset, you will see the payoff is worth it. Not to mention, you will improve your property, which will increase its value.
Notes Investor · San Diego, CA · Member since 2012 · 109 posts · 51 votes
5y
For Airbnb, if you don't want to manage it yourself. Then, you can use co-hosting which s/he will take care of the daily operation and charge 20-25% per booking. Then, it's passive to you :) Yes, I do own and operate an Airbnb in San Diego, CA for the last three years. https://www.airbnb.com/rooms/2...