All Forum Posts by: Will Lotherington

Thats a good question @Federico Gutierrez, there is probably a reason there are so few airbnb listings in Elmhurst. Looking at AirDNA, there are very few international guests, and the top guest city is Chicago. It is relatively close to the airport and can be gotten to from the city by train, so maybe its related to that... but I'm not sure.

Hello everyone, thank you so much for all of the responses, I did not expect such quick input and I really appreciate all of the answers to my inexperienced questions.

Thank you for the quick check @Michael Baum (and pointing me towards AirDNA), I plugged in the specific address and details and it gives an ADR of $77 and an occupancy rate of 80%. The potential annual revenue is $22,528 which comes out to $1,877/mo on average. There are only 4 other active "Entire Home" listings, and this apartment is in a significantly better location and will photography better, so I am optimistic that the projection is on the conservative side.

That being said, based on @John Underwood's feedback, I do see that these margins are still extremely slim (especially taking into account utilities etc.), and the likelihood of this being a profitable venture are very low. @Andrea Cole, I did not realize people shoot for 2-3x LT rent, even with the higher estimate I'm pretty far off.

I am still considering trying it out though as a low risk way to learn if I enjoy the hospitality side of things @Marcia Maynard talked about. If things go amazingly I could potentially keep doing it, or more likely use the experience to decide if I want to buy a property for STR. I'm only about 1 month, 2 books, and a handful of podcasts into the real estate world and buying anything is still a pretty terrifying idea to wrap my head around.

Thank you all again for all of the information, I deeply appreciate it.

-Will

TL;DR should I rent a 2bed 1bath for $1200 if I can Airbnb it for ~$1600?

Hello, I recently discovered BP and am extremely excited by everything I've learned over the last few weeks.

I believe I found a low risk opportunity to dip my toe into managing an Airbnb, but I would greatly appreciate a gut check before signing anything.

I rent an apartment in a suburb of Chicago (Elmhurst) and found a second apartment (2 bed, 1 bath, 1200sqrft) 2 blocks away. The second one is renting $200-$300 below market at $1200/mo since the owner is a retired 77 year old living remotely and just wanting a low maintenance property, and the property manager is the owner's old friend who primarily wants a reliable tenant who pays on time (she's been getting several subpar applicants).

The unit is in a great spot less than a block away from the metra train that goes into downtown Chicago, and in the center of all the stores and restaurants in the little town. I talked to the property manager about wanting to rent the place so my friends and family who visit about every other month from CA don't have to get a hotel (this is completely true and something I have to factor out of my numbers), and asked if she would be comfortable if I listed the apartment on Airbnb the rest of the time. She thought it was a great idea.

I reached out to several current Airbnb hosts in my suburb and they all said there weren't any weird legal issues like the city of Chicago has. Airbnb estimates ~1600/mo average, and I think it is a bit conservative given the location next to public transportation, "coolness" of the unit (100+ year old building that will stage and photograph well), and relatively underwhelming alternative Airbnb and hotel options.

Furnishing everything is my biggest unknown that I'm working on, but I would greatly appreciate hearing about any red flags/concerns/oversights that jumped out at you while reading this. Sorry for the crazy long post, but thank you very much for your help!