All Forum Posts by: Alex M.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $485,000
Cash invested: $120,000

Two 1bed+loft/2bath cabins with 100-mile views on the same title. Began self-managing to grow connections in the region.

How did you finance this deal?

Traditional financing as a 2nd home.

How did you add value to the deal?

Some light improvements and superior self management

What was the outcome?

We turned the gross revenues from $9k in July of 2017 (when managed by the cabin rental companies) to $14K for July of 2018 while self managed.

Absolutely a huge waste to pay 30-40% to a company to manage these.  That said it's not that simple either.  Self managing requires you to be "on call" 24/7 for any issues that arise and you need to handle them quickly and in the proper way or else your guests will start asking for refunds.  As more and more people get savvier with how AirBNB's case managers/ refund policy work, expect to be dealing with that anytime internet goes out, water levels are low, etc etc.  

I would say in my experience (I have bought 5 cabins since July) that the revenue is good and the net cash flow is decent but not as great once you start factoring in expenses, specifically utilities and maintenance.  

There are a lot of expenses in managing these cabins as things go wrong fairly often and getting a good and reliable person to work for you can be a real effort.  On my first inspection, the inspector missed a leak, and the handyman who went in to "fix" it didnt do anything.  As an out of state investor, be ready for scare tactics to try to upsell you on larger projects, and ongoing expensive maintenance to keep them going (fixing hottubs, fireplaces, etc.) (One of my cabins had some minor cracks in the foundation and the quotes I received to fix it ranged from $5k to $20k) 

Utility costs are high at $250/ month on average for a 2bed/1bath and during the winter you're looking at $600-700/ month.  I also recently had a seller not disclose an issue and am looking at $5000 to fix.  Remains to be seen whether I can fight back on this.  Just be very careful is all I will say.

I have not had a full year of data, but I think it's still a good market despite expenses, and if you have any questions you can reach out to me on PM. 

Hi,

Does anyone know the current situation with AirBNB in Indianapolis?   Believe its fully legal right?  Looking to put some capital to work so if anyone has a broker there who is familiar with airbnb investments, please do pass along.

Appreciated.

Noah

Hi comm.,

Im looking at seattle for a couple airbnb investments in the ~$500K-1M range.  Anyone know a good broker who has experience in this?

thanks

Also interested but may not be able to make tonight.  I would like to attend future events tho-  can you send me the details? Maybe we great a Whatsapp or text group?

Hi Steve-- I am looking to put some capital to work in Nashville potentially.  I will PM you.

@Costin I. @Joshua Young

Josh, want to just PM me and set up a coffee or call?  Itll be easier to chat that way.  

@Julia Green What about Boston's new airbnb regulations capping the # of nights you can rent it?  

@Valerie Rogers I vehemently disagree with you on the basic liberties that go along with property ownership.  So we can leave it at that.