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Updated almost 3 years ago,
Buying an Air B&B in IRA: How do I determine where to buy?
I will soon be rolling over a 401(k) into my sdIRA and I want to use it to buy one or more Air B&Bs. How do I decide where demand is highest (i.e. there are not enough units versus renters) and whether rents/occupancy will pay my mortgage and other expenses each month? I do not need to invest near where I live. Do I care about mountains (skiing, hiking, etc.), beach, lake, golf destination, national park area, city, or other?
If I decide mountain, should I look at Park City? Breckenridge? Vail? Whiteface? Other?
If beach, Gulf coast, Florida Keys, Atlantic Ocean, Hawaii, other?
SFH, duplex, condo, townhouse? How many bedrooms and baths (like 2-3 bedrooms for a small handful of guests versus a big place for family reunions, corporate retreats) should I look for?
How do I best diversify? Multiple property types, multiple locations, multiple quality levels, or some other manner?
Will I need 20% down payment plus the costs of furnishing the home? As it is an income producing property, can I get away with less than 20% down with a bank?
Presuming I put down 20% and let's say I have $150k. Generally speaking, would I be better off buying a $750k unit, two $375k units, or maybe a $250k unit and a $500k unit? How much should I expect to front for furniture, bedding, kitchen tools/flatwear, artwork/tchotchkies/other home-y items? Is laundry key?
Is there an Idiots Guide to Air B&B or Air B&B for Dummies or some other resource that can answer most of my questions? I reached out directly to Air B&B and didn't hear back.
Thank you!