Author Topic: Airbnb - What can I expect from a barn rental?  (Read 931 times)

SenecaTheYoungest

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Airbnb - What can I expect from a barn rental?
« on: July 13, 2018, 06:47:38 AM »
I have an unfinished barn that is being used for storage and as a quasi-workshop. I have been thiniking about finishing it as a rental unit. The city only permits me to make it an 800 sq ft living unit so I would still have some extra room for storage/workshop. As a rough estimate I expect the conversion to cost about $200-$250k. So I am wondering if I can justify this conversion/renovation based on the rents I might receive on Airbnb once it's completed. I think it would rent out well since it's a barn and it is situated on an orchard. What I don't know is what I can expect in terms of vacany rates. For example, does the average Airbnb rent 365 days/year? Or is it more like half that. Anyone with Airbnb experience that can provide some insight? For reference I am in Minneosta about 30 min from Minneapolis.

driftwood

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Re: Airbnb - What can I expect from a barn rental?
« Reply #1 on: July 13, 2018, 07:47:33 AM »
Holy hell $200-250K?!?! How? You could build a tiny house for less, and then drive it into the barn.

Did you mean $20-25K?

If your original number is correct... don't waste your time with Airbnb... buy a house and rent it out.

Mother Fussbudget

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Re: Airbnb - What can I expect from a barn rental?
« Reply #2 on: July 13, 2018, 08:51:49 AM »
Keep in mind that an AirBnb isn't the standard "Tenant/Landlord" relationship as in a regular monthly rental unit.
AirBnb owners are in the HOSPITALITY BUSINESS - guest/hotelier.  More turnover than a monthly rental. 
Housekeeping & cleaning have to be done between each guest.  Key pickup/drop-off arranged.  More laundry & dishwasher loads.

sokoloff

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Re: Airbnb - What can I expect from a barn rental?
« Reply #3 on: July 13, 2018, 09:03:38 AM »
Absent substantial sewer or foundation work, I can't see an 800 ft^2 living space in a barn needing to be $200+K either.

waltworks

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Re: Airbnb - What can I expect from a barn rental?
« Reply #4 on: July 13, 2018, 12:23:37 PM »
I had an AirBnB that we recently converted back to a long term rental. Every situation is different, but our experience was:

-AirBnB/nightly rental market is completely saturated. Everyone and their uncle (and us, a year ago) thinks they are going to get rich with AirBnB (many of them don't actually track expenses, either, so they think they're doing better than they are) and competition has driven prices way, way down (at least if you want to actually have the place rented 75% of the time).

-The work to clean and deal with inquiries is considerable. Even for just a single unit (our basement apartment) that is located in our own house, we probably spent 2-3 hours per turnover. You can of course hire that out, but reliable cleaners *who will come on an inconsistent schedule and short notice* are not as cheap as you might think. If you choose to do it yourself, it's really not fun to scrub toilets.

-There will be a lot of vacancy. Even if your place is in a hot spot, and in demand - you will end up with someone booking for a week, then the next guest leaving a 1 or 2 day gap on a Tuesday or something that nobody will want. And if you're not in a super hot spot, your demand will be seasonal (or worse). We had about 75% occupancy but that required very aggressive pricing sometimes.

-Stuff wears out fast. If you have a nice place, keeping it nice will require replacing 10-20% of your furniture/linens/etc a year, conservatively. Sheets get gross after a few dozen different people have gotten lipstick and hair and sweat on them. Toasters break. Couches start to look shabby. On and on.

We ended up making a profit, after all expenses (albeit paying ourselves zero for cleaning) of about $15000 for 2017. Not bad, but that required (at a minimum) hundreds of hours of labor. The unit now rents for $1300/mo and other than finding tenants and the usual anticipated appliance repairs and such, there is zero work involved.

If I was paying $250k for an AirBnB it would need to be renting for a fortune every night. That is crazy crazy expensive for an 800 square foot barn conversion!

-W

DebtFreeinPhilly

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Re: Airbnb - What can I expect from a barn rental?
« Reply #5 on: July 17, 2018, 06:52:55 AM »
Instead of converting it to an AirBnB, why not rent it as a storage unit? I'm sure there are people looking to store vehicles or off season items that don't need to be in a super climate controlled environment.

Or rent it out as work space for a small business? A barn can be very useful because many small businesses are looking for space but cannot afford the high commercial space cost. You already have the 220V wiring in place, and with some basic renovations (wood stove for heat, basic insulation, bathroom, etc.) you would have an ideal place for a craftsman. 

affordablehousing

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Re: Airbnb - What can I expect from a barn rental?
« Reply #6 on: July 17, 2018, 12:59:28 PM »
People love barns for weddings, I would do that and cash in before the new hipster wedding fascination happens in vacant old banks or empty malls. I would assume a wedding rental to be $3K per weekend, with 20 bookings a year, and you paying an event planner $30K a year as a part time resource to market, manage bookings, etc. That's not bad.

px4shooter

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Re: Airbnb - What can I expect from a barn rental?
« Reply #7 on: July 21, 2018, 09:42:10 AM »
200k for a reno?

Or are you tearing the whole place down and starting over with a very nice shop and a detached rental space?

Unless you are in a very popular and limited market for AirBnB, you are going to struggle to recoup that type of investment.