AirBnB and creating potential opportunities

[Eric Claus]

Hi everyone!
I am new to BP and somewhat new to REI. My wife and I frequent AirBnB when we travel and have considered the potential passive income through this service.

Near our home is a relatively popular recreational area. Through initial research, there are very few AirBnB options for anyone out of town looking for a non-hotel experience. 

My question: Does anyone have experience, or recommend either way, in purchasing land to build a potential AirBnB to rent out on a daily/weekend/weekly basis?  I have run the numbers on a beautiful piece of land and cost of building lodging. Initial signs suggest the numbers can work. My worry is, unlike having a regular tenant, the monthly income is more seasonal and less predictable. Is is worth it? Thoughts, experience, advice?

Thank you!!!

[David M Trapani]

Hi Eric,

I agree with Jaron and Matt's messages. 

I'm also not an "expert" but have owned/operated 6 different Airbnb properties (1 condo and 5 sfh's) in 5 cities / 2 states in the last 5 years.

As you sense, the opportunity can be quite profitable.

It's suspicious though that there aren't any short-term rentals ("STR") listed on the platform you checked out. Not sure which location you're scouting.

As you know, some cities have essentially or totally banned them (New York, South Lake Tahoe, Nashville, Palm Desert, etc.). Those are to be avoided.

Before investing in one it's a good idea to type into your search engine: "ABC city short term rental ordinance". This will give 2 key bits of info. 1. What if any laws affect STR's and if allowed, what the process is for a permit; and 2. News articles on the political climate or developments on STR regulations.

Must have this data before spending a penny. If it looks promising, I personally look for user-friendly (reasonable) STR rules reasonably priced, partially or totally furnished property (nice furniture appropriate to the locale & decor and lighting can be added) in an excellent location close to the action and amenities, walking distance if possible.

Also best to be in a popular destination location with growth and jobs to assist appreciation in addition to cash flow.

Haven't done a ground-up build on one of these, so hard for me to chime in. Personally, it sounds like a lot more risk involving contractors, possible mechanic's liens, city permitting issues, insurance, etc.

Not that I would discourage it. For the right location, could be worth.

I like to hit the ground running though and prefer an existing property, which is turn-key as possible.

Best wishes & good luck!