Airbnb All The Time For Real Estate Rentals

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I've been using Airbnb for vacations and found myself wondering if people put up their properties permanently on Airbnb. Seems like a bit of a pain in the a* with having to clean and offer the full "works" every time but it does pay a lot better than typical year lease rentals it seems even with just 80% of the days covered from what I checked. Burned through my seed capital quick and just starting to rent but having second thoughts before I start writing up some year leases.

What's your experience?

[Andrew Johnson]

Parth Patel So...ummm...unless your buddy has a short-term or vacation rental in the same area, toss his 80% estimate straight into the garbage can. Let's say I'm a parent visiting my kid for the weekend (to use your university example). I want to arrive on Friday and probably leave (check-out) on Sunday. So who is going to rent Monday -> Thursday. Welcome to a "booked week" with sub-50% occupancy. And in a college town, students leave for 3 months so, yeah, you're visitor base might fizzle to nothing. Now during popular times you can mandate (based on demand) that they book 7 days. Are you confident that will happen most of the time? By the way, I could be wrong and 80% could be the right number. However, you've burned through your reserves so how much faith do you want to put in your friends analysis?

For someone without reserves, I'd take the conservative route. Get a renter in, sign a 12-month lease, make sure they have good credit, etc. Just some steady cash-flow could help replenish those reserves.

You "chased" a better deal by buying a property that needed work. It didn't go how you thought. There's nothing wrong with that, nobody's bats 1.000, and all real estate is some kind of educated risk. Do you want to "chase" again (with no seed capital) to hopefully make it back quicker? There's a reason people bet more on Monday Night Football games, and it's not because they "won big" on Sunday.

And, not for nothing, but it costs money to furnish, add artwork, etc. for an Airbnb house. How long will it take to pay that back? What if it doesn't work out well for the first few months and you want to opt for a monthly lease? You won't get your money back out of that dining room table you bought.

Regardless, not trying to be negative here (I know it sounds like that) but you'd better have A LOT more to go on that your friends occupancy guesstimate 😀

By the way, if Airbnb does work well but you hate being the coordinator for everything, a best guess for a PM fee around a short-term rental would be 25% vs. maybe 10% for the typical PM.