STR in Home Before House Hack?

Question

Should we list two bedrooms in our primary residence on Airbnb while we are looking for our house hack?

Our goal is to house hack a small multi-family and have our living cost below $300/mo by the end of the year. Right now we own our home and plan to rent it out once we buy the house hack. Currently, like most of the country, our market is on FIRE (we are in Idaho Falls, ID) and we have been struggling to find a properties where the numbers work.

In the past, we have rented out two rooms in our house on Airbnb, which was pretty successful. We are considering hosting again to off-set some living cost while we look for our house hack. We can comfortably pay the expenses ourselves, but we are looking to decrease our costs as much as we can and increase our savings each month to go towards investments.

In the short term, the STR option looks attractive, but what happens if we find the house hack sooner rather then later? Summer is the high time for STRs since so many people pass through on their way to national parks, etc. I'm concerned we would have to cancel bookings and damage our Superhost status on Airbnb. On the flip side, if we don't list the bedrooms and we don't get into a house hack until fall, then we would have wasted prime time to earn extra money on Airbnb.

Would love to hear your thoughts and opinions! Is canceling bookings because we would be shutting down the listing as bad as I think?

Thanks!

Don Spafford · Answer

@Sam Webecke Halversen What type of property are you looking for to do a house hack? duplex, triplex, fourplex? Over the past 6 - 10 months or so I have seen a few that would work well for a house hack situation. The difficult part of it is to be the winning bid. You are already aware that there is a lot of competition right now for every property type. You need to be willing to pay well above asking and possibly forego some things that a few years ago would have been normal to ask for. Are you working with an agent yet or just looking on your own? We just received some off-market properties that may be getting listed soon. I haven't looked over them yet but there may be something there that could work. There are also some new construction triplexes I've seen under construction, you may be able to get one of those which would be ideal since they are new. But it all depends on your criteria and what you want to live in. Overall, just be patient, keep searching, get the word out that you are looking, and something will come up.For your current situation, if you can find a place for now that you can rent for less than your profit on air bnb for your house, then you would still come ahead. That allows you to still STR your house for the full high time, while removing the stress of all that and of finding a place in time to house hack. I don't know what you pay for your house, or what you make with STR, but if you can rent it for more while not living there, then say maybe you net $1200/mo. Maybe you can find a place to rent for $800 so the STR covers that rent for you and still profit $400/mo. That way you take advantage of the STR season while you can search for a househack without the stress.

Don Spafford · Answer

@Sam Webecke Halversen Thanks. After I saw your email I recognized that we have been in communication before, last Sept. I'll send you an email to reconnect.

Sam Webecke Halversen · Answer

@Don Spafford I just sent my number through the your contact button. I’d like to learn more about the new builds and the other properties you’ve mentioned and see where the numbers pencil out

Sam Webecke Halversen · Answer

Thanks for all the responses! @Don Spafford we aren’t signed with an agent, but we have been working off and on with a few. You are definitely correct! Being the winning bid is tough- we’ve put in a number of offers on properties that would have worked, but always got out bid or they went with a cash offer. We are trying to shoot for a duplex or triplex (right now we are being priced out of most of the 4plexes that we would be willing to live in). Ultimately, we want to reduce our living cost to less then $300/mo and still be in an area that we feel safe to have our young kids in.

Paul Sandhu · Answer

It depends where you sit on the risk/reward curve. I would be copacetic with that arrangement. But I had frozen pipes a few weeks ago and for my pre workout coffee I had to utilize water from the toilet.So what I'm saying is this, if you have the guts to drink toilet water you should go forward with your plan.Cheers.

Gerald Pitts · Answer

Do regulations in your area say you have to do owner occupy to STR? Otherwise, can just keep renting the rooms out after you move. If you have to owner occupy, maybe you could flip the script and just rent the rooms with long term lease, move out, and STR the other multifamily units in the house hack.

John Underwood · Answer

I personally would not want people I don't know to have immediate access to my family. I prefer to buy single family houses to rent out.