All Forum Posts by: Scott K.

I got invited a year ago when they started. Never bothered. I don't spend my time trying to convince other people to become airbnb hosts. Seems like a lot of hoops to jump through just to get a higher referral bonus.

I'd suggest waiting 6 months for prices to calm down. It's a tough market if you're new to it. Things are inflated about 30 percent over last year. 

If you want the rent it crowd, go on fb for the group Airbnb automated. (or something like that) you'll hear plenty of horror stories or examples why its so difficult to do. But there are also a few guys who claim to have 300+ units. So who knows. Pretty much everyone here is a traditional investor and owns. 

I own 4 properties in the Poconos. I'd never buy a lakefront. I'd also not buy in a gated community. Overpriced, and too many guest issues getting in. Hoas are constantly screwing us owners and were fighting back. Currently involved in 2 communities with issues. You need a lot of cash for furniture, and rehab. More than you anticipate. Make sure you have excess capital! Good luck. 

Given your brief financials... don't sell it.

You're making $8k a month? That's almost $100k a year. If you stand to only make $30k profit by selling it, compare that with how much profit you make from that $100k a year. Then estimate how long it will take to get back to that kind of profit.

That being said, it would go towards a good cause, and you should be thinking about long term risk. Who knows if the oil industry will be around in 5 years in your area. You know way better than we do about this risk.

The last thing to consider is - do you have an immediate use for that $45k? Would it just sit in a bank? Stocks? Or do you have something better in mind.

Seriously. Do 1 business the right way. If you aren't making enough money on that business, don't try to stuff a 2nd business on top of it. You'll half *** both. Only whole *** one business at a time until it's perfect. 

Poconos is a hellscape for buying properties, especially STRs right now. If you don't know what you're doing, I'd stay away from the market for 6 months until it cools off or you'll buy something you regret. Most places have 20-25 offers on them, and are going for about 30% higher than last year. There are a lot of short-term rentals coming onto the market from people who failed and gave up. Then they get bought in a week by someone else who has never run one before.

I own 3 airbnbs at this point and they all make about 3% per month. Those 'hard and fast percentage rules' are garbage, never use them. Run your own analysis and decide if this is the best use of your money, in your situation. My long term rentals never made 1%, then they doubled in value due to the neighborhood, and now they cashflow well.

If you want to run an analysis, don't use airdna. I've found it WAY off base on my own properties. I haven't found a better site either. The way I run my own analysis goes like this:

1. Find a house similar to what you want to buy on airbnb

2. Check it's nightly rate (NOT what is listed, that is a misleading marketing device), to check the proper nightly rate just find some dates (in the future a month or two, nearby dates have discounts) and do an entire week. Remove any 'weekly discounts' they give you. Take note what the weekend rates are, and what the weekday rates are.

3. Check nearby dates for that property to calculate what it's getting booked for. You'll see blocked off dates, that means its booked most likely. Calculate on average how many weekend nights, how many weekday nights per month. Multiply by your nightly rates. THis is your monthly rate.

4. Keep in mind, that some areas are VERY seasonal. I make 2.5x during summer months. This is where websites like airdna are good, for 'trends', not for 'rates'. You can evaluate which areas are seasonal, and get a good idea of what multiplier you should use to calculate the yearly rate, based on your one months rent you calculated.

I should also say - 10% isn't the best situation. Usually to get that sort of loan (or less than 20%) you have to pay PMI, and you have to pay a ton of points up front, making your ROI suffer greatly. Your goal should be to maximize your ROI, not lower the down payment.

Investment properties are harder to finance than homes you live in. Usually the LTV has to be 15%+, depending on how many you own. My first investment prop was 15%. My 2nd, 3rd, and 4th had to be 20%. Now I usually have to hit 25% for them to finance me. It also varies by lender, some are more willing to do lower amounts.

There are plenty of ways to get around this, most of them involve taking loans from people with much higher interest rates, who don't care about the property and will just lend you money. They're called hard money lenders. Rates can go between 10-20%, and usually people plan to do this just for a year, then when the income they have from the rental property qualifies for a conventional loan (usually 1 year) they can apply at a mortgage company and switch over the debt (pay off the hard money lender)