All Forum Posts by: Rachel Hughes

Is this happening to anyone else? I've had two reservations 'canceled by admin'. They were both followed by what appears to be an automated message reading...

"Hi Rachel,
Unfortunately, I won’t be able to stay at your place after all because of the incident affecting Memphis."

I understand the seriousness of this virus...but shouldn't the guest have the freedom to decide what to do with their reservation?

One guest communicated that she had no intention of cancelling. Bummer. 

@Nathan Faucett

@John Underwood Thank you. All great points. 

Hi BP friends, 

My first STR has been up and running for almost 3 weeks now and I wanted to share my experience. Everyone on this forum has been super helpful and I hope to pay it forward any way that I can.

Link to my Airbnb listing below:

https://airbnb.com/h/rachelsplace 

My husband and I searched for months to find a property in Memphis TN that we could house hack (live in one unit, rent out the other). We ended up purchasing a property that has a 3bed/1bath house with a 2bed/1bath attached mother in-law suite (MIL). The house is ~1100 sq. ft. and the MIL is ~700 sq. ft. My husband and I are living in the MIL suite so we can maximize the STR revenue. Here are the details:

ZIP: 38111 (Memphis), not the most desirable neighborhood but certainly not the worst either. 

Purchase Price: 136,400

Cash to close: 31,400 (20% DP, some closing costs, some things escrowed)

Furnishing: ~7,500 (this includes everything: some appliances, furniture, 2 sets of linens for 5 beds, consumables, and much more)

Unforeseen repairs: ~5,500 (re-do HVAC, new water heater)

Total initial investment: ~44,000

PITI: 850/mo.

ADR estimate: 100/night

Occupancy estimate: 70%

Revenue estimate: 2,100/mo.

Expenses estimate: 500/mo.

Cash flow estimate: 1,600/mo if you exclude the PITI since it doubles as our own housing expense or 750/mo. + free rent if you include the PITI.

I listed the property on 2/26 and a few hours later I had a family of 6 book it for 14 nights starting the next day. I was thrilled! It ended up being a disaster and nearly everything in the house broke. The family was super patient and we were able to get everything fixed but we did have to put them up somewhere else for a few nights. 

I am charging $80 for cleaning but plan to do much of it myself because it is worth my time right now. We'll see how long that lasts! After our first guests checked out I was amazed at the destruction. Spent a couple of hours scrubbing dried mac and cheese and gum off my rugs, chocolate milk on the walls (and ceiling somehow???). 

A few things I have learned...

1) A 40 gallon water heater is not big enough for 8 people (lol)

2) If it is breakable... it will break

3) Fluffy rugs are a bad idea

4) People forget stuff... a lot of stuff (this is a pro and a con... I get lots of free food)

5) If you provide it, it will be consumed 

So far I have not had any trouble getting bookings. March is 60% booked already and my listing only has 1 review. Our listing is attracting all different types of travelers (families with kids, young budget travelers, etc.). The ability to sleep 8 people is a huge advantage but also creates a lot more wear and tear on the property. 

Overall I am very happy with this property and am already searching for my next. My goal is to have 2 more listings in Memphis by the end of the year.

Any constructive criticism/comments on my listing are welcome! I am still learning and open to suggestions on how to improve.

Rachel 

@Nathan Faucett Check out this post. Really great BRRRR example in Memphis.

@Nathan Faucett

If I remember correctly, Proper covers a wider range of scenarios when it comes to liability. They also cover building contents (i.e. furnishings) and loss of income. Unfortunately I don't have the quote USAA provided so I can't remember exactly what their coverage looked like. 

I would ask Proper/Foremost/Cbiz what advantage they offer over traditional policies that offer home-sharing coverage. They will be able to articulate much better than me. 

Good luck! Sounds like you have a great setup. 

@Nathan Faucett 

Just went through this process for a property I'm closing on next week! It's a 3/1 house with a 2/1 attached in-law suite. Planning to live in the in-law suite and Airbnb the house. 

You might be able to add a "home-sharing" rider to your current policy. This was the cheapest option I looked at (through USAA) but not the best coverage if you are serious about hosting. 

I also got quotes from Foremost, Cbiz, and Proper. Proper & Foremost were basically the same cost and Cbiz was a little higher. We ended up going with Foremost because they had the best website & customer service. 

@Luke Carl I just learned more from you than my lender. Do lenders disregard your DTI if you purchase with a second home loan? Can your second home be in the same city as your primary residence?

She was a great guest! I love hearing from other women in this space. Very motivating. 

@Nathan Gesner Thanks for the input. Parking is limited and the home only has one bathroom. I hadn't taken that into consideration. How do you manage if the guest is not honest about the # of people?