Using HELOC to Reno for Airbnb?
TL;DR - What's your opinion on using a HELOC to reno your personal home if you plan to then start using Airbnb?
I've been missing out on a huge market in my area - Airbnb.
I've read on the forums in the past that people seem to not like the idea of using a HELOC on your own home because that's money out of your pocket with no money flowing back to make the payments on the HELOC. I'm assuming that isn't true if your home then starts cash flowing for you, but I wanted to see what BP thought.
The majority of the to-do list would be simple things like changing out closet doors, maybe buying an IKEA armoire or something for guests to use. However, I'd probably want to add a shower to the basement bathroom as well as a small kitchenette (sink and minifridge, couple cabinets) and additional bedroom down there. This would allow me to either just Airbnb the 1bedroom basement, stay in the basement while Airbnb-ing the 3bed main level, or rent out the whole place.
Plumbing is already in the basement, but I'd have to bust out some concrete for drains. Haven't ran numbers yet, but lets say its in the $15,000 range to do it all. A friend mine totaled $3,000 in about 7 months this year for a 2 bed, non-renovation house. I think given our size and location differences, as well as the fact that my place is updated, I could easily double that. The reno pays for itself in a little over 2 years and I add value to my home when I go to sell.
Apologies for the long post, but am I correct in my thinking? Am I missing anything?