NET REVENUE (NOT GROSS) from 1 of my properties

[Bailey Kramer]

Yesterday I shared how much a property I Co-Host GROSSES ($100k-$115k/year) and people wanted the NET number.  Since I'm the Co-Host for that one, I don't know the net and I'm paid off of the GROSS revenue (20%).

So I wanted share how much one of the Airbnbs I own made in 1 full year.  My goal for this post is simply to inspire and also show that it is possible to make money even with high-interest rates!!  If you have any specific questions, throw em below (: 

Let's get into the details:

Purchase Price: $115K (turnkey AND came furnished)

Interest Rate: 8.5% (DSCR Loan. I was 22 when I bought it and banks didn't like me not having a W-2 Job #entreprenur)

Location: Indiana

Strategy: I ran this property as a STR/MTR Hybrid

Total Revenue: $32,609

Expenses: $7,639

PIT: $7,323

Net Profit: $17,647

Important notes:

1. I've been running this property for 10 months now so I extrapolated the data to show the full 12 months.  We have a mid-term guest so I know the exact revenue and expenses for the next 2 months* 

2. Capex isn't included in those #'s, although I've kept all of the money I've made in the account as a reserve at the moment. When I buy another property, i'll use some of the funds to help with the purchase, and leave a healthy reserve in the account!

Have comments or questions?  Feel free to throw em below!

[Nathan Gesner]

Quote from @Bailey Kramer:

A big part of the problem with STR is that people fail to accurately account for expenses and exaggerate their income. I'm not hacking on you, but I'm going to hack on you because I love to dig into this stuff.

A mortgage of $100,000 at 8.5% is $8,760 a year and property tax probably runs around $1,400. That's over $10,000 but you only list $7,323? How are you saving $3,000?

Where's the property insurance that runs an average of $1,600? It seems PITI would be over $11,000 so I'm missing $4,000 or more from your accounting.

Maintenance is typically 10% of the rental income, which would be $3,200. Is that included in your expenses? Average utilities in Indiana are $365. Add internet and you're looking at a minimum of $5,000 and that assumes your Tenants only use an aveage amount of utilities, which is unlikely. Then you've set nothing aside for capex. I would expect your expenses to be closer to $10,000.

Here's the expense missed by 99% of all posters: your time. Let's be conservative and say your time is only worth $20 an hour. If you spend five hours a week on this property, that's $5,200 you could have made stocking shelves at Walmart during that time. You have to account for that in your expenses. 

Bottom line: I'm digging up $10,000 - $12,000 that's not accounted for in your numbers. Am I missing something?