Duplex with AirBnB conversion, is it worth it?
Hi, and thanks in advance for any advice.
We're looking at our first RE purchase. It's a duplex separated by a two car garage and a large RV garage. The RV garage is currently being used by one renter as a workshop. This property is on our block so we know the area very well. It's in a desirable area near a university and walking district, but does have some crime and transience. Its on the edges of a more solid SFR area.
Property cost is $235k. Current rents are $1050 for larger 2/2 + 2 car garage, and $650 for smaller 2/1 + RV garage, so total currently of $1750. Taxes are $2575/yr. We'd be putting 25% down at 4.75%. Property managing ourselves, spouse is a contractor. Property is in decent shape, some minor repairs (siding) needed. Not a super attractive property but decent enough for a rental. Finishes and flooring etc appear to be in pretty good shape and relatively new.
We are thinking that we could convert the 2/1 into an AirBnB, utilize the large RV garage ourselves as a shop, rent out the 2 car garage as a shop, and rent out the 2/2 for the current rate.
Based on what a nearby friend is getting for a studio AirBnB, we could pull in $1000/mo for that smaller unit; at least $1000/mo for the long term 2/2 rental; and maybe $200/mo for the 2 car garage shop. That would be closer to $2200/mo.
In the future we'd convert the 2 car garage into another unit for either long term rental or AirBnB.
This would be a large part of our investment cash available. However I think we are better suited to buy and hold rather than more complex deal making. With spouse as a contractor that makes repairs and maintenance pretty straightforward.
I think we could cash flow $400-600 per month? Is that reasonable considering "free" labor? We are also considering less wear and tear on the short term rental units.