Anyone have experience w/ owning short term rentals? (airbnb,etc)

[Jon Peterson]

Hello BPers!

I have a few long term rentals, but am thinking of buying a SFH to use as a short-term rental. Does anyone in this community have any experience with this? If so, what neighborhoods have you found to be best? Would you be willing to share a broad generalization of the financials? Do you prefer it over long term buy-and-holds? I'm looking to get educated, and talking to folks with experience is the best way I know how! Any input is welcome, and thanks in advance!

[Andrew Kerr]

@Jon Peterson I always like to start looking at data. I like Airdna, its not perfect but I like to use their broad market report, then look at specific zip code reports. This helps get me a look at average nightly rates, average and medium occupancy, see any seasonal changes, and lets me compare different size units along with amenities offered by top listings. Then I use this data to make a more informed decision on where I buy, how to furnish it and market the unit.

I don't know the local laws in the Twin Cities, but it is import to learn the local regulations if there are some, and fully understand the local sentiment towards short term rentals and if it will potentially change. The last thing you want to do is buy a place as a short term rental then regulations pass that make the property no longer feasible as a short term rental. A good example is in New Orleans (a MSA where I invest). About a year ago they passed regulations on short term rentals. In a non owner occupied building, that isn't zoned commercial, you can only rent out a place for 90 nights per year as a short term rental. This basically made a lot of SFR or duplexes being used as short term rentals limit their income potential and made the income on par with what you could get with long term tenants.