Buying first AirBnB - want advice !

[Danny Day]

My wife and I are looking at purchasing our first AirBnb - and I am finding this method of real estate investing is much different than the others I've studied.

Quick details on the deal...

We are looking at a property that will run us about $1,950 / month to operate with an average occupancy rate of around 30%.. this will spike in the summer months as this is a vacation home as well near a river / lake. 

For the seasoned pro's and those that have done this before, I am sure you have ran into some of the same questions I asking myself... such as: How do I find (accurate) occupancy rates? and How do I find (accurate) rental rates / comps?

When I compare what I see booked on Airbnb playing with dates, vs what is showing on some of the Airbnb metric websites, they are very conflicting.

I'm trying to think of everything that I am not thinking of... any words of wisdom, articles, or advice is appreciated

Danny

[Luke Carl]

@Danny Day 30% occ run. Don’t do it. Where is this thing and what is it? Are you looking for something to vacation in or something to make cash? Need way more details. Happy to help!

[Paul Sandhu]

You're in an oil industry city. Rent an STR out to people working in the oil industry. They get a per diem, usually around $100/day. Renting furnished houses to refinery contractors is what I do with my 23 STRs in this town.

[Danny Day]

Originally posted by @Luke Carl:

@Danny Day 30% occ run. Don’t do it. Where is this thing and what is it? Are you looking for something to vacation in or something to make cash? Need way more details. Happy to help!

 I don't know if the 30% number is an accurate estimate of the occ.. I pulled that from airdna. This is going to be a second / vacation home we were hoping would pay for itself via AirBnb when we're not using it. The property will be located in Canyon Lake, TX

[Danny Day]

Originally posted by @Paul Sandhu:

You're in an oil industry city. Rent an STR out to people working in the oil industry. They get a per diem, usually around $100/day. Renting furnished houses to refinery contractors is what I do with my 23 STRs in this town.

 Yes that makes a lot of sense, but we will not be purchasing a home in Houston. This is going to be a vacation property near a lake / river in Canyon Lake, TX

[Lynette D Nickleberry]

Sounds like you need a str calculator. Got this in another thread. Very helpful!

https://www.dropbox.com/s/xwnw30cmjx32is1/Vacation...

Best of luck on your VR hunting!

credit: Jon Crosby

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[Eric A.]

@Danny Day AirDNA is adequate info in some markets but is often incorrect. They mine their data daily that does not account for dates blocked or removed temporarily which occurs frequently in a seasonal vacation market. Shoot me a message and I can give you some more info on what you might look into. Lastly, if this is a personal vacation home, and you see the added revenue as gravy then go for it. If you genuinely need the income to make it a viable investment don’t fall in love with a property, fall in love with a great deal. I see this time and time again, and in the end they overpay for a nice view when you could have just rented for the few weeks a year they use it. Take care!

[Luke Carl]

@Danny Day So buying one for personal use is totally different than buying one for cash flow. If you can get remotely close to breaking even over the life of a 30 year mortgage go for it..... IF you think you won’t regret the thousands and thousands of guests you’ll have to deal with over the next 30 years AND you can get over the fact that thousands of strangers will be doing disgusting things in your bed.

And couches. And hot tubs. And kitchen counters. And living room floors. And coffee tables. And pool tables. And vanities. And pac man machines. And every other square inch of your house. Then they leave you a 4 star review because they didn’t like your brand of toilet paper. Fun stuff :)

[Paul Sandhu]

@Danny Day  Reverend @Luke Carl was kind enough not to mention a tenant overdosing in your vacation property, people cooking meth in your vacation property, people breaking in to your vacant vacation property for a free vacation and a free HDTV, an unplanned fatality in your vacation property, etc.  All these things happened to me.  They could happen to you.  But don't let that discourage you. 

[Benjamin Gallant]

@Lynette D Nickleberry thanks for sharing that Lynette! That’s super helpful

[Brian Moore]

@Paul Sandhu you mention an unplanned fatality and all I could think was “sooo the planned fatalities go better???” I love your hustle though. Appreciate all of the insight that you share about the Airbnb game. You’re one of the realer voices about it here from what I’ve seen in my limited time on the boards

[Account Closed]

@Danny Day what ever you do don’t buy it in Chicago. Or any other market that is targeting Airbnb and making them impossible to run.

[Mark S.]

@Danny Day We have a STR rental in Wimberley, north of Canyon Lake. Your 30% is too low. You should easily do north of 50% without trying. Make sure it is a nice property that people will want to stay at and there's no reason you aren't north of 75% occupancy

PS...when we were looking we found a lot of areas around Canyon Lake that had home/property owners associations that prohibited STRs.  So keep that in mind.

[Tyann Marcink]

@Danny Day congrats on wanting to enter this addicting industry! Yes, it is very different from other real estate investments. Personally, I find it enjoyable...especially when you are talking to guests who are happy to pay you $600/nt versus tenants who are late on paying you $600/mo.

Definitely first figure out what your goal is: personal use and rent to cover expenses, or cash flow. This will determine how you proceed with your decisions on how you operate it.

My personal goal for an area with a definite high season and longer shoulder season is to make sure I can cover my total annual expenses during the high season when I know I'll get the bookings. Then the rest is my profit and hustle.

For accurate occupancy rates and rental rates / comps, look at the current listing calendars and rates and watch them, chart them. But really, you won't know if someone has blocked dates for themselves or a repair, so it can definitely be skewed.

The new site Vrolio does have a lot of investment information and education that might help, so be sure to check that out. You might also find value in the new Hospitality Guide at The Distinguished Guest.