Building a house to turn it into an Airbnb?

[Franck Brichet]

Hi,

I am new to BP and this is my first post. Here we go:

My wife and I have an opportunity to buy an old lake house at the lake of the Ozarks for 60K. It’s in a desirable location. Our idea is to buy it, bulldoze it, and build a brand new home on it and use it as a vacation home and also pay for it it by renting it on Airbnb. We’re really excited but we are afraid to make a huge and costly mistake.

Here is a quick summary of my calculations:

Total cost of purchase + build = $410,000

Rent = $4,000/month

Cash for down payment = $50,000 (that’s my pension working as a teacher for 11 years).

On the paper it seems that it would work but I’m afraid I’m forgetting something. Any feedback or advice would be much appreciated.

Thanks,

Franck

[Tyler Henry]

I wouldn't build it on the premise that the STR income will pay for your mortgage. This area is HIGHLY seasonal and is by no means resistant to economic pressures.

With that said, if you're building it anyway as a second/vacation home and the STR is to just subsidize the mortgage, then sure, it will rent Memorial Day to Labor Day.

You'll have to be disciplined by not using it on major holidays as that will be your main source of income.