Startup costs and length of time

[Ashley Wolfe]

All-Knowing Ones,

My husband and I have our little log cabin in La Grange, TX and we've received six bookings in the last six weeks through all three of our platforms (Airbnb, HomeAway, and Glamping Hub).  We're pretty pleased with it so far and are super excited about hosting our first set of guests at the end of December.

Slowly but surely, we've gotten past the small expenses like stocking paper supplies, dinnerware, and linens and are starting to look at the larger expenses like new TV, mattress and new living room furniture.

The two crumby recliners and the outdated TV in the listing photos are already out.  We know which mattress we want to buy, we've bought the TV on a Black Friday sale.  Now I'm stuck with which sofa/loveseat to purchase.  I find something that has a decent price but crappy reviews.  Then I look at the price tag of the nicer ones and it seems counter-productive to spend so much money that we don't have covered with rental income yet. 

This comes to my next question: when does the spending stop and the money making begin?  I think that my husband and I will be learning in the first year then improving significantly in the second year.  We will also hopefully see some repeat business in the second year.  But I want the first impression of our very first guests to be awesome so we start off with strong reviews so we can get some more bookings.

[Julie McCoy]

This is the moral equivalent of doing rehab on a house you intend to use as a LTR.  You spend a bunch of money up front, but if you set it up right, you're only doing it once.  Think of them as capital investments (and don't forget to write them off!).  It improves the value of your home, in the sense that with the improvements, you've created both a more desirable property and a higher rate threshold.  

Yeah, it'll take a little while to recoup the expenses, BUT you're definitely doing it right by wanting those first awesome reviews - once those start coming in, the bookings will start to snowball.  If you get meh reviews the first couple times out, it's really really hard to get momentum back.  People are willing to take a risk on something new, but if the only reviews are blah, they'll pass.

However, it's only honest to say that while the spending will certainly drop off (significantly!) it's never going to *stop* - there's always going to be sheets to replace, or the coffee maker that broke, or fixing this or that random thing.  But that feels like nothing once you've done the hard stuff of furnishing it nicely and outfitting the kitchen!  

I'm impressed you've done it on a budget of around $1600 - I probably spend twice that when tricking out a new place, and once you factor in true capex (like a new roof) I spend closer to $10k per property when I initially begin.  I am also excited to learn Zinus makes sofas!  I LOVE their mattresses and I'm going to be in the market for a new sofa very soon...