All Forum Posts by: John Carbone

Hey @Dolev Zaharony, great answers here for you. I will say that if you are charging 25%, you are responsible for paying the cleaners and minor maintenance stuff so make sure you budget that.

What are the expenses in infrastructure that I'm missing? 

My mind has been all over the place on how to maximize our money and borrowing ability to achieve the largest return on investment. I've researched finding that 500k home with 15% down + furnishings + closing costs means 100k cash in. An average nightly rate at $200 with 70% occupancy doesn't even cashflow. I don't want to invest that much of my money even if it cash flowed 20k per year. It's tying up too much of my money that I feel can be leveraged better.

Alternative thought process:

I'd like to create a small community of cabins that isn't considered "glamping". No detached bathrooms, showers or tents.

I can owner finance a 5 acre property for 50k ($600-700/mo payment; down payment 10k), put in a well for 5-8k along with a septic 5-8k, grading/dirt work for 2k and build 3 small a-frame cabins myself for less than 60k. Total cost high end = 88-90k. 

The rental numbers: $80 avg nightly rate x 50% occupancy = $1200 / mo. * 3 cabins = $3600 / mo * 12 mo = $43,200 gross profit / year.

$43,200 - $8,400 (land payment) = $34,800 net profit / year

ROI: 38%

I could pay off the land after the first year of operation which would result in an income of $43,200 the 2nd year with the ability to build more cabins.

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I've never developed a property before and would most likely choose an area with loose restrictions and permitting. There are lots of things to consider with this approach vs going the traditional STR route of buying a home. Choosing the best building sites, septic location / size, well location and the proximity of the cabins to reduce cost (trenching, piping, conduit) but still giving enough privacy. Another thought is to have walking paths to each cabin with one parking area to reduce clearing and driveway expense.

If anyone has done this type of STR approach before, I would be interested in consulting with you. I realize that I've just hit the basics with my thought process.

Be easy on me! Haha.

 The inflation is still 4% due to rent increase which is increased after property home value , so Fed failed in those aspect , as well as failed to crash the job market.

My husband and I are interested in potentially creating some cabins on a piece of land to create a short term rental business. They would potentially be simple with no plumbing (central bath/shower house). So far our experience includes the home we live in (which we flipped ourselves) and one other rental property (long term rental). I've only talked to a couple of lenders, but they both told me we'd need more experience under our belts to take on a project like that. Has anyone done this successfully early on....or are we crazy? :)

Hi we have a house at north side of Seattle. We are thinking furnishing it and use it as STR.

I check STR houses on Airbnb and VRBO. Many of them are available all the time which means there is huge vacancy rate.

How will you make money if the house is always vacant.

Thanks

I went to one of these once.  Everyone I met said they were "killing it".