All Forum Posts by: James Carlson

Man, I -- like @Luke Carl  -- love these "Airbnb is on it's death bed, VRBO is dying" threads. I don't mean any offense to you @Miki M. I get the hesitancy, but Airbnb (and IMO, to a lesser extent, VRBO) is the platform to post on. I'll be interested to see what @Michael Kugler comes up with, but it's kind of like as @Peter R. said, trying to make a start-up cable company in a town where it already has a monopoly.

Airbnb has four million listings worldwide -- more than the top five hotel companies combined -- 500,000 nightly stays, and they are quickly becoming the choice of millennial travelers. (My wife and I haven't stayed in a hotel in a few years now.)

You could look for other platforms to post on, but you've got to wonder ... who's going to be looking at your listing on those platforms? You need to be where the eyeballs are, and I still believe that's Airbnb (and yes, VRBO).

I'm also going to be interested to see how booking.com works long-term for you, @Julie McCoy . I remember using FlipKey for a bit, but its site was clunky and after awhile, the few bookings I got weren't worth maintaining the listing. 

Cheers!

Thanks for the shout-out, @Myka Artis

@Yannie Ko Welcome! Where in Aurora do you live? Yeah, you're likely going to run into a number of issues. As others have said, and as you've now discovered, most HOAs don't allow anything less than 30-day rentals. (For others reading this, you'll likely find it in your declarations under a section called "use restrictions" or something like that.)

But you'd also run up against Aurora's Airbnb law. Their law is modeled off of Denver's Airbnb law, which allows you to rent on Airbnb (less-than-30-days) ONLY in your primary residence. It doesn't sound like this is your primary residence.

About corporate rentals, I'm not sure about that $2,800 quoted above. That seems a bit high for Aurora, depending on exactly where you're located. In general, I think in Denver -- and this likely holds true for the rest of Colorado -- I see people getting about 50% more for a furnished, medium-term rental than than they would for an unfurnished, long-term rental. My business partner @Erin Spradlin and I rent two places furnished for 3-month stays to traveling nurse types.

I'm not advocating deceit, but you could make people sign a 6-month lease, but with an easy-out termination clause after 3-months. That way,  you'd appease your condo building and may still attract 3-month stay visitors.

Good luck!

@Account Closed

Congrats on taking a big step. Maybe it wasn't perfect, but damn so many people sit on the sidelines forever waiting to find the perfect deal. You are likely going to be fine, and even if it doesn't, what's the worst that happens? You lose a little money? You're going to get some good lessons for that money and will be better equipped next time.

All that said, have you considered Airbnb? It's more time-intensive if you manage it yourself, but in Colorado Springs, Airbnb is a good way to juice your rents quite a bit. 

Good luck!

@Arthur Voskanyan

First, the obligatory disclaimer: I'm not a tax advisor! That said, when we filed taxes in years we were doing Airbnb here in Denver, it was counted just like rental income, added into line 17 with any other rental income we had from long-term tenants. It's taxed like any other income you have, so you don't pay higher taxes on it.

Now, of course, if you're really good at Airbnb, then the extra income might bump you into a new tax bracket and at that point,  you're paying more taxes.

@Matt Smith

As always, @Myka Artis says things that I like (to be fair, so did @Luke Carl ). Reports -- even the best ones -- can only get you so far. Nothing beats knowing your own market and what will work there and won't. Look at the listings in the area you're interested in buying. See their furnishings, their prices, how they market themselves, and their occupancy rates. Can you do something similar? Better? And if so, will the numbers work for you?

@Tammy Price

Talking to a lender is the best first step. They can run through the options based on your specific situation. That said, yes, you should theoretically be able to do this. My wife and I used a HELOC on our first primary residence for a portion of the down payment on our first rental. We now own two rentals.

What are you looking to do with this purchase? Traditional long-term buy-and-hold? I have some clients under contract in the Springs who are going to do Airbnb with it. The laws down there are very favorable. 

Good luck!

@Matt Smith

You're asking a pretty common question. It's a good question, don't get me wrong, but it's not one that anyone has been able to answer in a nice report or chart.

In general, it seems smaller cities with some tourist attraction are good. Gatlinburg, Branson, Galveston, etc. The buy-in is lower and the demand is still there. That said, you can make it work anywhere. I've got a couple clients who just closed on Airbnb investment properties here in Denver where the prices are high, but their returns are definitely going to justify the expense. And I have another pair of clients under contract for an Airbnb property in Colorado Springs, where home prices (but also Airbnb prices) are lower. 

I agree with what @Paul Sandhu and @Andrew Wong are implicitly saying: AirDNA is only as good as its sample size. For instance, AirDNA's report on Airbnb in Denver is pretty solid, but just an hour south in Colorado Springs, that site's report is spotty at best. That's because there aren't enough listings yet to give you reliable numbers.

@Lazaro Vento

Great idea. It sounds like a form of master leasing. As @Andrew Lawson pointed out, getting permission is pretty important. (My wife and I did this in apartment buildings almost five years ago and we were kicked out of some of them.) I think there are a lot of landlords who would be excited to get a bit above market rent and let you do what you want. I know some people who are doing that with Airbnb here in Denver. (My wife and I did this years ago, which started our trajectory into real estate.) 

The cashflow is great, but it's also only cash flow. You're missing out on other money-making benefits of actually owning the real estate. I'd be putting aside a good portion of that cash flow into a downpayment fund to get into investing.

Thanks for sharing. Good story.

Hey @Tom Conant

Well, I'm Denver's biggest fan, so take that into account, but yeah, Denver's great. Thriving restaurant scene, great beer, legal weed, 300 days of sun and the mountains right there. 

Are you looking to move to Denver or just to invest in Denver? I tend to be bullish about the Denver market, so I think long-term appreciation is still possible, but you have to get pretty creative to get really good cash flow. 

If you're moving here, there are some great opportunities for house-hacking, both with long-term tenants and with Airbnb guests. Sounds like you're young, so that might sound like a good option. There are definitely some people here who are covering their entire mortgage plus some cash flow by doing this. 

That said, if you're deadset on getting in on Denver just as an investment, there are a couple places that can do well. I think Athmart Park, parts of Barnum and occasionally still some parts of Villa Park. These are all getting the overflow of the Sloan's Lake development. Parts of east Colfax are actually getting better as well. I think Wheat Ridge still has some spots that are a good investment, especially if it's somewhat near 38th which can get quickly into Berkeley shops and Highland Square. 

Good luck!

@Jim C.

Congrats on the purchase. It's always exciting to get another one in the portfolio. Others have already made most of the good points. Get on Airbnb and see what others are doing in your area. Check out AirDNA for a report on what the averages are in the area. 

I would disagree that you can't run a short-term rental from long-distance. I know of numerous people who are running them in Tennessee and in Galveston. Now, I'd probably want to get a short-term rental property management company. (Say, if you were doing Airbnb in Denver, you'd reach out to someone like @Tyler Work)