Let's help out all of our members by sharing your best short-term rental property purchase to date! What made it so great? Location? How did your rental strategy evolve? What could you pass on to those interested in investing in this asset class? I'm so excited to hear about your homeruns!
I live in a beach community and through the years I had continuously walked by a shingle-sided house with a great ocean view. The husband had passed away and the wife bought a new house and the beach house had sat for five years and started to deteriorate. I found out from a neighbor that the place was going to be for sale and I approached the seller. She named a price that was quite good and I bought it by selling another property that I had owned as a long-term rental through my self-directed 401K. I spent the summer renovating the house which needed a lot of work. I moved a renter in for several months and then June of 2021 launched it as an Airbnb. It worked out very well with my best month in August with over 10K in revenue. I have great management and an extreme attention to detail. I own it in my 401K so the income is tax-free until it's taken out. A good view, a unique home, a great quiet location, and a competitive price are critical. The biggest challenge is cleaning, we have gone through lots of cleaners to find some that are as picky as we are for our guests. I have already made more in the few months I have had the Airbnb going than I would have in a full year with the long-term rental. Location, quality, price point, and the best team are the keys.
I live in a beach community and through the years I had continuously walked by a shingle-sided house with a great ocean view. The husband had passed away and the wife bought a new house and the beach house had sat for five years and started to deteriorate. I found out from a neighbor that the place was going to be for sale and I approached the seller. She named a price that was quite good and I bought it by selling another property that I had owned as a long-term rental through my self-directed 401K. I spent the summer renovating the house which needed a lot of work. I moved a renter in for several months and then June of 2021 launched it as an Airbnb. It worked out very well with my best month in August with over 10K in revenue. I have great management and an extreme attention to detail. I own it in my 401K so the income is tax-free until it's taken out. A good view, a unique home, a great quiet location, and a competitive price are critical. The biggest challenge is cleaning, we have gone through lots of cleaners to find some that are as picky as we are for our guests. I have already made more in the few months I have had the Airbnb going than I would have in a full year with the long-term rental. Location, quality, price point, and the best team are the keys.
That's a great deal Monte! Do you find that hiring a cleaning company vs an individual is better for consistency, or are their standards not high enough for your visitors?
We have tried companies and individuals, both have major challenges. I agree front row is best however that would have been triple my current investment and likely not viable as an Airbnb.
BRRRRnB In Fayetteville, NC. One of the wholesalers that I had used in the past contacted me and said she had a deal in the Historical Area near downtown Fayetteville. I went and walked the property and needed everything from electrical to new hvac to plumbing. It was a small 2/1. It was purchased by owner financing for 58k which included the wholesaler fee. It took about 3 and half months of rehab, with holding costs and rehab I spent just under 40k. Once it was done, We spent about another 8k in preparing it to be and STR. All in we spent about 106k and its arv was 155k!!!! The location was amazing and since them it sits in a great area has about 39 reviews all but one was a 5 star review. It profits a good amount each month on top of us getting our money back. It has been a great investment.
Just started our Airbnb in August we were able to combine several strategies. First we were able to purchase it distressed and off market which was key to getting a great price. Then we were able to have the vision to utilize the house to it's full potential, sleeping 16 adults and using every spare inch of the property! Overall we will be in for about 350k and expect our average rent to be in the 20k a month range. Our current highest rented month is 16,500 and we have 9 bookable days left! I would share a link but not sure if that is allowed lol! We will be brrrr this property shortly the lender has just ordered the appraisal!
I gave a guy some calendars of scantily clad women in October or November. On Super Bowl Sunday the guy calls me and said the Fluid Hydraulic Catalytic Cracking (cat unit) went down. I'm throwing a Super Bowl party at my house. The guy is coming to town with his crew of boilermakers. 36 people total. 2 guys brought a camper. The other 34 stayed at my places until the cat unit was up and running. Took them 4 weeks working around the clock. 18 on day shift, 18 on night shift. The cat unit produces $13,000 worth of petrochemical product a minute.
That's my first grand slam.
Second grand slam happened 6 months later. Cat unit went down again. I'm on a vacation. The calendar guy called me to reserve a house. He told me that my phone is going to start ringing off the hook when he mobilizes his crew of boilermakers again. I cut my vacation short.
@Alicia Marks. 1) bought a house lakefront 30k under asking thanks to the Covid saw that my neighbor was renting every day and so bought a cabin one for 107k before it hit the market through my realtor whls 1st buyer got cold feet because the rental was not doing well …..I added my flair. Renovated it and got professional Picts Lived in it for 2 weeks to find out what’s good in the house and it had made me 3x the amount i thought. 82k this is in year 1 and do the house will Pay itself in 1.5 year. Insane. Doing this again now.
Right location; right type of house and matching it with the right customer (this is the key to the high ROI). I am a professional at improving the right things st the right price. Will be renovating the lake house and 1 more by next year.
@Mark Horton II I love working with historic homes, even if some of the surprises can be sticker shock types. I have never been able to get owner finance on a wholesale deal. That's awesome! Is that common for your area, or just a small wholesaler you knew?
Just started our Airbnb in August we were able to combine several strategies. First we were able to purchase it distressed and off market which was key to getting a great price. Then we were able to have the vision to utilize the house to it's full potential, sleeping 16 adults and using every spare inch of the property! Overall we will be in for about 350k and expect our average rent to be in the 20k a month range. Our current highest rented month is 16,500 and we have 9 bookable days left! I would share a link but not sure if that is allowed lol! We will be brrrr this property shortly the lender has just ordered the appraisal!
We have 3 short-term rentals that we manage remotely from New Jersey. One is on the beach in the Outer Banks, and the other 2 are in the White Mountains of New Hampshire. We are actively looking for additional properties in both locations that can cashflow.
The biggest lesson learned about buying a beach property is that you have to up the budget for maintenance. Anything near the salt water wears out faster (paint, HVACs, etc) so it requires more maintenance.
@Alicia Marks It was a wholesaler I knew, it was a rare deal; he was deployed and had issues closing and we wanted to get to work quickly on it, so we came up with that solution.
@Alicia Marks my wife and I bought a beach house in Seaside Oregon because we love going there during the summer. We got a great off market deal and invested about 100k into the remodel. We refinanced the property after the value add and got all our cash back.
Now it does 80k a year in revenue and the mortgage is $24k. We need to refinance!
@NaTarrio Jones I'd love to hear about that one. How are the laws in Galveston? That area is at the top of my list for possible short term because my parents are moving their boat to Keemah to start prepping for retirement.
@Chris Shepard that sounds beautiful! Can you rent year round there? I know a couple with a beach house on the Oregon coast, but they are only there April- September. Most of the towns nearby seem very seasonal.
@Alicia Marks Kemah is a great place to keep a boat! I have mine near there. And Galveston does rent year round. Our market has events even in the “off season” that keep people coming our way even if its not summer weather. My units are booked every single weekend right now even in November!
Feel free to reach out if you have questions, I am an investor and agent on Galveston Island and in the surrounding areas.