Airbnb investment in SF

[Alon Maoz]

Hi there! Relatively new to BP here, so many smart&experienced people here, someone must have a good answer to my question :) I'm thinking of buying a small studio apt in SF for to run as an Airbnb business. What mainly concerns me is the fact that I've heard about a few states (NY as an example) who have banned short term rentals, and the fact that it could possibly happen soon in CA (?), which will force me to long term rent it, which will not make financial sense anymore. Hence, would you think that it would be a risky move to purchase such an Airbnb property in SF then? Thanks in advance for everyone!

[Chris Mason]

Hi @Alon Maoz,

Furnished rentals, such as airbnb, was a huge topic of conversation at @J. Martin's annual Bay Area summit a few months back.

A big take-away for me was that you gross the most doing it the airbnb way, but you net the most targeting medium term tenants staying for 1-6 months. This solves the legality problem, because as regulators target airbnb they almost always set 1 month as the threshold. Two birds, one stone: make more money, and following the law to boot!

The basic reason why folks have learned that you make more with the 1-6 month furnished rentals is that you don't have to pay the cleaning lady 10 times a month, you don't have to deal with 10 check ins and check outs per month, you aren't dealing with damage caused by party animals, etc.

Travelling nurses was one example held up of your target tenants. Other examples were consultants in town for 3 month gigs. In many cases, they are being given a temporary cost of living allotment from their employer, so they don't care about the exorbitant rent you charge them because someone else is paying for it, but they DO really appreciate that it's already furnished with all the creature comforts that hotels don't have.