What to look to buy Airbnb

Question

Upstate ny for example? Is it a big home? A unique home? Is how do u know what will be a good deal? Stay within a budget or spend more ? For example a 200k home will rent for 120 per night but a 250k is 200. So that’s a better deal.

Any one has stories where it has not worked and or ones that have. ? Can you share lessons learn?

Michael Baum · Answer

STR's are like any rental property really. Location really matters more though IMHO. As Paul as often stated, no one will vacation where he has his rentals so he positions them for the workers.

People looking for vacations are going to plenty of different areas. It is hard to imagine all the different ideas of what makes a great vacation place. Lakes, mountains, beaches area all good bets. Access to hiking, biking and various other outdoor activities are winners.

As for the homes, I would always stick to the budget. You never know how it will perform. Personally, I would go for the lower priced unit. I am assuming this is your first STR so if it doesn't work out, you are not in as much risk.

Be prepared that your first year could be a bit of a loser. With no reviews and brand new to market, things could be slow. Once you get that first year under your belt and a few 5 star reviews, things should pickup.

That is how it has been for us. First year was slower than I would have like, but we were late to market. We have about 8 5 star reviews on AirBNB and HomeAway and now our second year is doing well.

We have it rented for 67 days now and I expect to get another 20-30 as the summer progresses. Our home is really a single season home with some bumper traffic in Spring and Fall for bike riders.

We button it up for the winter as no one is really wanting to spend a week on the lake while it is snowing and cold.

I plan on doing some marketing to get some winter coverage for longer term STR people. Folks who are job sharing, looking for a home etc.

Paul Sandhu · Answer

Rent to travelling workers, not vacationing people.  There is a petrochemical refinery in my town.  99% of my renters are welders, pipefitters, boilermakers, electricians and the like.  Average stay is probably 6 weeks.  I charge the same weekly rate as a motel room, but they get a furnished house instead of a motel room.  6 months of gross rent pays the purchase price of a house in this market.  It takes 7-10 months to get 6 months of rent.

My tenants just want 5 things.  A place to drink beer, cook food, do laundry, shower and sleep; in that order.  I do all that and throw in cable, wifi, Netflix, a grill, firepit, horseshoes, etc.

David Sisson · Answer

Location, good photos, good interior decor, be a great host, keep it clean. Have multiple back up strategies if Airbnb doesn't work out / the economy takes a dive.

Ken Latchers · Answer

There are many strategies.  But these are some of the things I try to do:

Use all the booking sites. Airbnb, HomeAway / VRBO, booking.com. Also Craigslist.

Get a good property management system. I use ownerreservations.com based on what I read on several forums

Use a dynamic pricing service such as wheelhouse or pricelabs or Beyond pricing.

Use Smart locks. For example I use erentallock.com but there are others

Try to avoid places that are already saturated. Recently I stayed a couple of nights in Newark, New Jersey it was easy to find $30 a night. Might as well do long-term rentals for that price.

Try to find a place that has several ways you can rent. Vacationers or tourists, long-term rentals, traveling nurses, Etc

Resist urge to jump into arbitrage or cohosting. There are so many potential problems they should at least own one or two properties and learn how to do it properly first.

My personal secret is similar to buying long-term rentals. It's nice to get a brand new building, but you can make twice the cap rate on an old decent building. I paid 135 thousand for a pair of Townhomes that grosses 65k a year + 280000 for a mfh building that grosses 120000 a year. Yes I had to put work in, but easier to make better ROI if costs low.

Don't start out remote. It is really hard to make everything work fine when you were eight hundred miles away. Don't listen to all the people who make it sound easy. It's easy until Things Fall Apart. And there's nothing you can do.

Don't cheap out on furnishings. You're not going to outfit and prep a place for 2,000 to 4000 dollars and impress Airbnb guests. On the other hand, don't spend $40,000 to outfit and prep a house.

Tyann Marcink · Answer

Know your target guest. For example, don’t set up a shabby chic girls weekend studio in a place that mainly deer hunters visit. Go talk to the Chamber of Commerce and the local businesses and find out the demographic of who comes to visit the area you want to purchase in. Then set up the property specifically for that demographic.

Stick to budget but look hard at the numbers. If spending another $100k gets you double the income, see if your budget can be stretched. That’s why I’m building a 10 bedroom house instead of a 5 bedroom house currently.

Keep top of mind Hospitality, customer service, and smiling when writing emails. Plus the other advice from the others who have commented.

STR is definitely not a passive income source.

What to look to buy Airbnb

Most Popular Reply