The future of Airbnb

[Ricky Mai]

Hi,

Are laws cracking down on Airbnb? I just heard on a BiggerPocket podcast that someone was killing it Airbnb. I got excited so I decided to look into it. Everything looked great in my area, Southern California, for Airbnb. 

But then I started to see laws and permits against Airbnb and many cities in my area (Anahiem, Los Angeles, Santa Monica, San Diego) are not allowing Airbnb anymore and looks like that way for many major cities in the USA. It looks like its just getting worst.

Is there still opportunity in Airbnb and if so, where?

Thanks!

[Michael Rutkowski]

In my market, we have a temporary ban on STR's, but my property is R4 zoning, so as restrictions get tighter, my profits increase because competitors drop out one by one. I've got one unit crushing it, and am remodeling 2 more units to get online ASAP. It's not like a traditional landlord type situation. You are in the hospitality industry at this point, and if you don't treat it as such, your reviews will take a hit, and your rankings will drop, and you won't make enough money.

My wife and I had years of hospitality experience before this, and we are loving it. It's amazing. Our guests love us. We are always booked, and getting repeat customers after 6 months (business people are our bread and butter, and being business owners, we know exactly what they need). They all hate hotels and motels because they are depressing. They always tell us how grateful they are that our place is like a home, filled with things to look at, read, watch, do, and play with. I've had people offer to pay me $3k per month to rent my unit, but I make more than that in the high season, and almost as much in the low. They just can't understand we would lose money if we rented it out to them long term.

With that said, there are a ton of pitfalls. Insurance, zoning are the two big ones. You will need to do your own research there, or just read my previous posts on it. As for taxes, I carry over lodging, bed, and the soon-to-be sales tax in my town, to my customers. Plus cleaning fees, and pet fees. A family traveling in my area isn't going to even blink at $100 cleaning fee. It is a crazy bargain for them to have their pet, 4 kids, and grandpa with them, rather than renting 3 motel/hotel rooms out. And I've got a nice landscaped yard with a firepit, and dog run for them... They love it. I have nothing but 5 star reviews across like 5 sites. Very satisfying business for us.