How Airbnb Helped Us Pay Down Credit Card Debt, Buy a Primary Residence, & More

by | BiggerPockets.com

In February of 2014, I knew three things:

  1. I liked to shop,
  2. My boyfriend (now husband, James Carlson) and I were spending enough time together to make two rents an expensive luxury, and
  3. We were nowhere near sharing major financial decisions or enduring holidays with each other’s families.

In other words, we weren’t going to move in together yet, but the extra rent was kind of killing my dream Nordstrom’s budget, and I didn’t see that changing in the next year.

Related: Is Airbnb Really Ruining Rental Markets?

Let’s Back Up a Little

I lived in Denver in 2008 and seemed to remember hearing whispers of people making tons of money on short-term rental sites (namely, Airbnb) during the 2008 Democratic National Convention. My assumption was that the site was likely still running in 2014, and with the recent legalization of marijuana, there might be more people coming to Denver than before, which would create demand, which would (hopefully) create people willing to pay for a few days’ rentals, and my grand experiment would end with that 33rd pair of jeans I so desperately needed. So, with that in mind, I sort of cleaned my apartment, posted some photos, and waited.

While I thought I was waiting for a $500 (at best) pay day, I was actually 30 minutes out from having my (our) lives totally changed. Denver wasn’t just in demand; it was in demand. It took less than an hour to get my first booking from a really nice couple who wanted to come to the city for a concert.

How We Got to $3k/Month in Profit

More importantly, though, over the course of the next two years, James and I would host over 150 guests, rent out one of our places nearly full-time and rent additional apartments in the area to turn around and rent out on Airbnb (much easier to do then and not totally legal). With each one-bedroom apartment returning about $3k/month profit, we then turned around and purchased a “new” used car and Invisalign, we paid down credit card debt, and we put the down payment on a primary residence. We then used that equity to get an investment property with a HELOC. Oh, and we also got married.

Related: My Client Tripled His Income Using Airbnb: Here’s What He Should Know About Taxes

Airbnb has changed a lot in the past couple years. Its growing popularity has made it both easier and harder to break into certain markets, and some cities and HOAs have regulations limiting property use—but we remain fanatics for the service. And we remain fanatics because we consider it fundamental to some very positive professional developments, one of which is that we both quit our day jobs and now run our own business: an agency focused on helping people acquire short-term rentals and leverage their assets to acquire additional properties.

Since advocating for something that’s been great for you is not that hard to do, we are venturing into blogging on the subject and hope we can help others benefit from our experience, while also gaining from the experiences of others.

Are you in the short-term rental market? Any questions about breaking into this niche?

Leave your comments below!

About Author

Erin Spradlin

Erin Spradlin is co-owner of James Carlson Real Estate. She currently owns three properties and is looking for her next investment. With a background in Airbnb rentals and marketing, she is always looking for the next trend. Find more on Erin at: http://www.jamescarlsonrealestate.com/.

13 Comments

  1. Aaron Gehrig

    Great article Erin. I’ve been considering getting my start in short term rentals. As you said, you rented out other places and then turned around and rented on airbnb and that wouldn’t be so easy now. What would be your advice now on getting started if that wasn’t an option?

    • Erin Spradlin

      Thank you, and that’s a great question. Are you a homeowner or a renter? I know a lot of homeowners who have leveraged HELOCs to buy an investment property to do Airbnb full time with (but that also depends on your city rules and your HOA rules if you go the condo route.) As a renter, you could get started by listing your place on the site when you are out of town or don’t need to do it (again though, you may have rental rules with your apartment.) It would take longer to make money this way, but I think you’ll still enjoy the extra cash.

  2. I agree, great article that makes embarking on a career with AirBnB rentals appear very lucrative.

    However, is this a case of, “Too little too late”?

    Here in Miami the Miami/Dade City Council is considering Regulations that are so draconian if passed it will choke the life out of most AirBnB rentals except for those who will try and fly under the radar by misrepresenting what they are doing. “Honest, they were friends not renters”.

    Because the Miami/Dade City Council isn’t voting until September 7th, and like before could possibly postpone any action, my wife and I looked at Key West, Florida. Again I did research regarding the legality off AirBnB and again up popped articles about $5,000 fines being levied and those offering short term rentals being hunted down. Apparently if you own the property and live it in six months a year and have obtained all necessary Permits and Licenses and pass a Use Tax you might be able to pass muster.

    Correct me if I am wrong, most of the Short Term Rental (AirBnB) Gurus templates are based on multiple, non owned properties.

    Ironically, a few days ago I had a lengthy conversation with a couple who live in New Orleans and guess what business they are in? Yep, AirBnB. There couple own, not rent or lease, four properties and over the last five years have been very successful with AirBnB revenues. However, they are aware that the City Council of New Orleans is looking at regulations that would severely cramp if not kill their business.

    My advise, before you run that AirBnB ad make sure you know what your local Government is up to.

    • Erin Spradlin

      Thanks, and totally agree on the finding out what your local city government is up to and/or trying to implement a more favorable attitude before anything is written into law.

      We live in Denver, which mandates that your Airbnb is also your primary residence, which limits investment opportunities. Luckily, there are other cities that are much more open to Airbnb and we advise pursuing them. An alternative (that’s still lucrative) is to move into a medium-term rental model and work with traveling nurses, corporate rentals, etc. They still need furnished places and pay more than your average long-term renter.

      • Hi Erin, Do you have any suggestions for how to access the ‘medium term’ market? Specific websites for listing the property, or companies (like the traveling nurses program) that would be worth reaching out to? How important do you think it is in that market to have a ‘real’ kitchen (stove/oven/sink) or could you make do with a mini-kitchen (fridge/microwave/toaster oven/coffee pot)? (if we didn’t have a kitchen sink put in we would offer dish washing service, ie. put the tub of dishes by the hall door and we would replace with clean dishes daily). Thanks, Julie

        • Erin Spradlin

          We have primarily been using CL, NextDoor and word of mouth. I know someone using furnishedfinders.com, but she said it was kind of pricey and we haven’t had the need yet.

          Regarding a full kitchen, I feel like for Airbnb and other short-term renters, you could get by with a limited kitchen, but I don’t think you could do that for traveling nurses. They have decent budgets and are good tenants, but they have higher expectations for what they want. Make sense?

  3. Roberto Palma

    Hi Erin. That was great, I love Airbnbs articles. I currently own a owner occupied duplex and I’m planning to get a Heloc to buy a short term rental. Where do you go or call to see if your state or city allows Airbnbs? Any other advice?
    Thank you very much.

    • Erin Spradlin

      We’ve been compiling a database on airbnb friendly (or unfriendly cities) up and down the front range in Colorado. I’ve been doing that by just googling the city name + planning or zoning department and usually the government website comes up. Call that number and ask for the planner of the day. Most cities don’t have laws specific to short-term rentals yet, so it’s worth also asking if council is planning on discussing in the future and/or if the city has any laws on the books about rentals that are 30 days or less. Good luck!

  4. Tyler Huntington

    Recently purchased two on a lot (2 Acres) near Joshua Tree with the sole intent of renting short term. In the process of getting them up and running. About 3-4 weeks out. It’s been a nice learning curve so far. From wifi access in the middle of no where, the upfront expense of furnishing TWO houses, to dealing with the unexpected. That’s half the fun though! If it were easy, everyone would be doing it!

  5. The continuing saga of AirBnB v. Hotel Industry

    Just had a glass of wine, actually a few, with a friend here in Miami who has been doing AirBnB in Brooklyn, Boston and Miami (she travels lot and own multiple properties).

    She said her Miami House (she owns it) rents well using AirBnB, however, one neighbor no longer talks to her and another neighbor complains a lot about the noise. Some time ago my friend stopped renting to anyone under age 50 and will not rent to single people. Stereotyping? Yes, but it dramatically reduced the complains.

    Still, a City Inspector or Code Enforcer has paid a few surprise visits and rattled his saber.

    The Miami/Dade City Council is set to vote on September 7th for a 24 Page Ordinance that has many Draconian measures that if passed will severely limit if not prohibit Short Term rentals which is exactly what the Hotel Industry wants.

    I will keep this forum posted on the status of the Ordinance. If it passes I will notify this group and if requested email a copy of it to you.

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