Indianapolis Property great for short-term rentals

5 Replies

I have a residence with a separate apartment that I rented on Airbnb (perfect set-up). The most full year (we travel a lot) grossed over $30,000. With some slight modifications to the main house, I think it could easily be two more units that are much more profitable than the apartment. 5200 total sq ft. I'm thinking $110,000/year total income. It is in a great location just north of Broadripple. The neighborhood is quiet and has no HOA. The property is on a pond. There are 2-car and 4-car attached garages, so plenty of parking. It has been totally rehabbed.

We need to move out of state to be closer to my wife's ailing parents.

How would I go about marketing this property as a good investment potential?

How much should such a property sell for as an investment?

I am new to this forum, so any feedback would be appreciated.

Thanks,

Steve

I have owned a number of long-term rentals over the years and have recently been divesting myself of them in order to retire in a different state closer to my wife's ailing parents.  I am at the point where I am trying to simplify my life.  If we were staying in the area I would definitely hold onto it.  In fact, I bought the house next door and gutted and rehabbed it with the idea of doing another short-term rental there because this one far exceeded out expectations.  Then our plans changed.  Life happens.

Hi Steve,

As an investor and airbnb guy, I can say yeah they can be profitable.  I'd say keep it if you can and keep the rewards.  

While you can market a multi-family with an "income approach" and try to get a bit more resale value based on its income, realtors/buyers are not going to buy into the airbnb profitability as much from my experience. If your neighbor can do it, there has to be a reason why you are asking 20-50k more for your property vs the neibor house that can be purchased.

Also if you do look to sell it as a business, were you running it as a business?  By that I mean do you clean it yourself or have a cleaner?  Were you managing the listing bookings or having someone do that?  If you were totally hands off then its a true business (more from the Robert Kiyosaki mindset).  If you were providing free labor its less desirable as a stand alone business. 

But why not keep it and grow your portfolio?  Hope that helps. 

Regards,

Dolce

Steve:

You might consider attending one of the monthly CIREIA meetings.  They have a buy/sell session at each meeting where you could promote your deal in front of a large room full of RE investors.  Try https://cireia.club/ for more info on that. Another thought...there are some full-time STR property managers that might be able to help you market it (or may even want it themselves). Or, as others have suggested...you could hang on to it and hire a local property manager to take care of all the details...and let the checks show up in your mailbox wherever you are.

As for putting a value on the property...I'm going to take a stab at it, based on what how I would view it...but I'm not really an expert in STR's, just a 13 unit landlord. Iit sounds like there are two scenarios:

SFR with a separate short-term rental unit: I would value that by using usual comps for the residence and adding $50 x the avg. monthly STR income. Typical long-term rent multipliers are more like $100 x monthly income...but I just don't think you'd get anybody to pay you that that much...hopefully someone more experienced with STR's will weigh in.

Three short-term rental units (after converting the main house): $50 x avg monthly income. But, I wonder how long you would get away with three STR's on your property in an otherwise quiet SFR neighborhood.

Good luck and congrats on your retirement!