Owning an AirBNB?

[mom@shiloh]

We're considering buying a property that we can use as an Airbnb that could also be used as a vacation spot for our family. If you've done that, how has it worked for you? We live in the eastern part of the country, so it would be nice if it was within reasonable driving distance from us. Other than location, what kind of things should we be looking for?  

[Carrie12345]

A quality property manager. There are so many in our area that range from cheap to extremely expensive and great to horrible, without a clear correlation. See if you can connect to other Airbnb ers for references.

Also, carefully check zoning and hoa-type regulations.  My area has changed things up multiple times. In my community, you have to pay a fee to the association for every rental and a yearly fee to the township.

ETA: and rentals are banned in some areas, but you often have to dig to realize that.

Edited February 10, 2021 by Carrie12345

[gardenmom5]

Dh has a colleague in a small business group that manages ABBs for other people.  When his "didn't have much money" friend retired, instead of selling his well-located to certain businesses condo  (so that tends to be the crowd he attracts), he encouraged him to go the ABB route.    It has been good thing for him - he's getting an increasing income off of it - instead of one lump when he sold it.  covid has cut into it, but he's making money.  (eta: he did need to remodel the condo before he could rent it out.  not extensive and he didn't spend a lot,  but it needed to be attractive to potential customers.)

 

do consider who your market would be.

how much service do you want to provide?  full kitchen or not?  w/d or not?  how many people do you want to be able to stay there?  bigger places tend to attract the "let's have a house party" (which is against ABB rules) crowd. (the ones that make the news and leave the owners scrambling.)

do you want people to be able to only stay one-night, or require they stay at least two or three? - or a week minimum (if you're in a high demand vacation area.)

 

There is also vacation rental by owner.   

we've rented through both.

Edited February 10, 2021 by gardenmom5

[PeterPan]

We have friends who have done this. They had previously rented that location/unit, so they knew they liked it. I think that would be important, because it's so easy to get somewhere generally and realize you wish you were on a different side of the road, different end of the island, whatever. 

Property managers are great, but they don't necessarily handle storm damage, etc. So if it's on the beach, you may spend time dealing with hurricane damage or may have stress. It's true some of the financials are good enough (what they rent for if rented out 80% of the time, etc.) that your place will basically be paid for. But you're having to take time off to deal with stuff.

There can be unexpected (large) expenses too. Like we were in a condo in Orlando (really nice, Reunion, loved, would buy there in a heartbeat) and the AC went out. So to keep the northerners from burning up in the blazing 75-80 degree fall heat of Florida, those owners had to pay to replace the AC unit overnight, boom. They didn't have the luxury of waiting even a week to assemble their finances, because we were HOT, kwim? 

There's also this sort of conflict I see between cost of upgrades and return on investment. If you like a certain level of things and want them at your location, your dh might say yeah but they won't improve the rental cost, they might get stolen. 

Another really BIG thing to consider is that going to your own VRBO/Abnb when you own it is WORK. If you have rented through those places or priced them out, you'll notice the layers of pricing. Well when you stay there as an owner, you're not getting rent (obviously) and then having to *choose* whether you pay for linens or not, whether you pay for cleaning or not. Think about that. Do you go on vacation to clean house? To take out trash, mop, clean all the baths, sweep all the rugs, etc.? That's not MY idea of a good time or relaxing, sorry. Our friends (very generous) let us stay at their (exceptionally nicely located) very large place for free, and those were the terms, just like the owners deal with. I couldn't believe I was going to have to be accountable for all the sand we were dragging in, trash, baths, mats, washing stuff. An owner has a private closet to store their stuff, but that means you have to wash your own bedding when you leave and make beds when you arrive. None of that is my idea of a vacation.

If the place were exactly what I wanted for my needs, I'd still go through the hassle. Like that condo in Orlando, I'd do that in a hot minute. It was small, not a big deal, and personally I'd go stay for 1-2 months at a time, lol. The pool was great and I'd just sit in the hot tub and look at palm trees. And it wouldn't bug me to do the laundry and clean because it would be SMALL. But I'd be open to an RV too. Then you're not sharing and not having to set up and tear down so much and can be anywhere.

I think that's the thing for me. I like to try new places, so locking into ONE doesn't make a lot of sense. It would have to be pretty magical to lock in. There are some spots, and Orlando has so much to do and is so easy to rent out it wouldn't matter if I got bored with it. But if it were in an unusual or less common location, I wouldn't want to be stuck.