All Forum Posts by: Od Ntuk

@Jared Burns Thank you for your input. I'm starting to feel comfortable with areas to target.

Hey All. Thank you for the helpful feedback. I have done additional research and recalibrated my strategy. It appears that areas like Germantown and Port Richmond are still affordable and still have good commute times to the tourist attractions. Does anyone in the know have feedback on these neighborhoods? I also took a look at Carrol Park and Overbrook. They had nice looking street views but the commute times seem too long to be ideal for vacation rentals. I took a look at a property that looked nice in the Mantua area, but the neighborhood had a rough looking street view. I know street views can be outdated, but Mantua looks interesting because of the commute and being close to Drexel and U Penn.

I think if I go too much above $150k that my numbers will no longer work for how much I want to earn with STR.

From my experience as a vacation rental host guests want a place that is convenient to transportation to get to tourist attractions. They also want a place that is in a safe neighborhood. That does not necessarily negate off the cuff neighborhoods. Reasonable guests are looking to save money so they know they may not be staying in a hot neighborhood otherwise they would go ahead and pay more for a hotel. In regards to regular room rentals I am keying on properties near universities in Philly as I suspect there may be opportunities with students.

@Jeremy Fisher Ok fair enough. Feel free to reach out to me. I’m curious about what price points to target and in what neighborhoods.

@Andresa Guidelli Would you mind sharing areas that you consider up and coming?

@Andresa Guidelli What area of Philly do you invest in? Do you rent rooms or do any vacation rentals?

I’ve taken particular interest in South Philly especuallt Point Breeze.

Hey All! I'm new to Bigger Pockets. I have been successful using Airbnb, HomeAway, and TripAdvisor to rent the one-bedroom apartment I have in my two-family home in Brooklyn, NY. I'm a 5-star hosts on all of those platforms and I'm making nearly 3x what I would make in rent after expenses. I'm now starting to look around for opportunities to acquire more properties in popular tourist areas. Philadelphia caught my eye because properties are still relatively affordable, at least by Brooklyn standards. I'm taking a look at 3 or 4 bedroom properties where I can rent out individual rooms and potentially use one room as an Airbnb private room rental. 

Has anyone had success doing room rentals in the Philly market?

If my research is correct, I can purchase a remodeled 3 or 4 bedroom SFH for anywhere between $100k to $150k depending on the neighborhood - my max budget is $150k. On the high end, it looks like the mortgage would be $800 per month. It looks like single room rentals usually go between $500 and $800 per month from my research. It looks like two room rentals can cover the mortgage plus expenses (utilities, insurance, taxes, internet, cleaning/maintenance, etc) leaving the two extra rooms for a profit. I looked quickly through Airbnb and it looks like room rentals are going from $25 to $75 per night during peak season.

I'm guessing that cash flow could look something like

Monthly Cashflow

Room Rental ($500 per month * 3 rooms ) + Airbnb Room Rental ($50 per day * 20 days [subtracting days for flip days]) - Expenses ($1k) = $1500 + $1000 - $1000 = $1500

Net Annual Cashflow

Room Rental ($500 per month * 3 rooms *12 months) + Airbnb Room Rental ($50 per day * 180 days per year[6 month per year]) - (8.5% hotel tax + 1 sales tax) - $125 annual regisitration fee for home sharing + Using the Airbnb room as regular room rental for remainder of the year ($500 per month * 6 months) - Expenses ($1k * 12 months) = $18000 + $9000 - $855 - $125 + $3000 - $12k = $17020

Start-Up Costs

• Furnishing common areas and Airbnb room plus purchasing pots, pans, utensils, garbage cans, etc - $5000
• Acquiring property with traditional financing - $30k or so
• I will kick the tires with lease optioning as a potential way of bringing down financing costs

Breaking Even on Start-Up Costs

$5000 to $35k initial start-up costs

Assuming $500 per month lease option = ($5000 + 500)/1500 per month profit = 3.66 rounding up to 4 months to break even

Traditional financing = $35k/1500 = 23.33 months rounding up to 24 months or two years to break even

Assumptions

• Philly has a law that you can only rent on Airbnb for 6 months per year
• I went with the higher purchase amount $150k but with the lower room rental range and middle Airbnb daily rate
• I'm assuming that the property will have 4 bedrooms

If my assumptions and numbers work than Philly definitely looks interesting as a vacation rental market. I would love your thoughts and insights. 

Thanks!