I have a group of like-minded investors in NY that have has a great deal of success with short-term rentals (AirBnB). They are expanding to PHI and have approached me about partnering with them on a deal.
Below is the info I have so far, looking for advise on what I am missing from a data standpoint, and what I should know about the market in general.
Property type: Townhouse
Listing price: $550K
Property taxes: $13K
Income expectation: $200-$300 per night
Leverage: approx. 85% LTC
What is a good estimate for the following:
Vacancy rate: (I was told 80% is a conservative estimate for the area)
Repairs & Maintenance
Thank you all in advance for the advice!
@Andrew Reyes , have your potential partners explained to you or have you researched yourself the short-term Airbnb regulations in Philadelphia? If not do you homework and include in your figures, the tax and fee assessments. Also, there are certain residential neighborhoods where short-term rentals are not allowed. Is the property you are considering one of them?
I will say this again, do your homework. It is great to ask the advice of folks here but nothing substitutes for getting the information yourself. Especially, if you are doing business in a city you don't live in or is not familiar with.
@Andrew Reyes I currently do rentals in PHI. I’m not sure where your property is located but without having all of the specifics here’s what I can tell you. There’s about 4000 active listings in the market with a city average rate of about 165, please keep in mind that this fluctuations depending on location, size, seasonality, and quality of your listing. The laws towards short term rentals are favorable but might require permits depending on your setup. Do yourself a favor and run a report on AirDNA to get some location specific information, you can narrow it down to the zip code of the property so you know about what to expect. Feel free to reach out if you have any other questions.
I do a good amount of Airbnb work and I would definitely tell you to include furniture costs as well. If you're going to be renting out your spot for $200-$300/night I'm guessing you're going all high end furniture. $200 - $300/night for a 2bd/2bath seems kind of high throughout the entire year but I'm no Philly market expert. I would also tell your investors to send you their Airbnb business profile page so you can be sure they are truly doing a great job of Airbnb.
I'm following this thread...looking at possibly doing some STRs in Philly.
@Andrew Reyes did you follow up on this deal?
@Michael Melendez Do you manage STR in Philly for others?
Purchase Price: $465,000
Upfront costs: $71,070
10% LTC financing: $46,500 Down
Closing costs: $13,950
Legal costs: $500 (seems low)
Profetional Photography: $120
|Average daily price||$170|
|Days in month||30|
|Monthly price multiple|
|Annual Airbnb Rent Escalator||3%|
|Monthly Rent From Parking||$0|
|Total Gross Rent||$51,875|
|Restocking / Cleaning||Monthly||150|
Zip Code: 19146
Join the Largest Real Estate Investing Community
Basic membership is free, forever.