Our First Airbnb in 2016 -> Left my W-2 in 2022 !

[Jason Muth]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $192,000
Cash invested: $38,000

A few years of BP podcasts and lurking the forums, and we finally took action!

Back in 2016, before we had any idea what we were doing, we took the leap and purchased this lake home in New Hampshire.

Our first investment property - a lake home in New Hampshire that we have turned into a profitable short-term rental.

What made you interested in investing in this type of deal?

We had been visiting this lake for years and knew that we would be for years to come. We had enough for a small down payment and wanted to get into an investment. Others around the lake had been renting their properties to vacationers, and we figured that we could as well. Airbnb was just starting to gain steam, so we gave it a shot!

How did you find this deal and how did you negotiate it?

We were walking down the street and saw the For Sale sign! The house had been on the market for months and was recently reduced by $30k.

How did you finance this deal?

20% down payment / Conforming 30-year fixed loan @ 3.5%

(Fun fact, we won about 1/3 of the down payment in Las Vegas when we hit a Royal Flush on Let It Ride and won $15k. We unfortunately didn't bet the progressive that would have added $400k atop that...whoops!)

How did you add value to the deal?

Immediately, the goal was to make the home look less like a well-maintained grandparents' home and more like a lake home
We resurfaced the brick fireplaces with lake stone veneers, which really transformed the space
We repainted everything in neutral / natural tones (beige, greys, light blue, light green)
In the ensuing years, we added landscaping beds using rocks from around the property
Built a paver patio, pathway, and firepit
Added a retaining wall landscaping bed to redirect water

What was the outcome?

The outcome has been fantastic. We learned how to become short-term rental operators.

I'm now an Airbnb Superhost and Premier Host on VRBO.

Gross revenues tripled within four years.

The property has more than doubled in value, and as of this writing, we have reduced the principal balance on the mortgage by 25%.

Six years after I purchased this home, and because of subsequent short-term rental purchases, and I was able to leave the corporate world and my W-2 job for good

Lessons learned? Challenges?

We learned a ton:

- How to navigate the Airbnb and VRBO platforms and optimize our listings

- How to communicate with guests throughout their booking, stay, and post-stay time periods

- How to operate a STR and still be a good neighbor to community members who live nearby year-round

- Navigating crises (After one month, we had a frozen / burst pipe and flood affecting all 3 floors while guests were present, which could have been a financial and emotional disaster)

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes! Rory Gill at NextHome Titletown Real Estate and UrbanVillage Legal. Operating in MA and NH.