Author Topic: How to try out air bnb to see if it's for me?  (Read 932 times)

pudding

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How to try out air bnb to see if it's for me?
« on: December 01, 2018, 03:27:03 PM »
I live in a house that I own (OK, I have a mortgage), and my setup is that I have a suite in the basement with 3 young Japanese female students renting.

It's been that way for about 2 years now and it all works quite smoothly, the rents cover my expenses. They are no bother and seem to like to keep things clean and orderly, which suits me fine. As a landlord of 15 years, I'd say this is the smoothest least hassle set up I've had.

I'd like to spend some time seeing my family in Europe and the east coast (I'm over on the west coast)

Time ticks on and my father is in the U.K. and has a heart condition, my grandkids growing up on the east coast, and I feel like this desire to be around them is more than just wanting to travel for the sake of wanting to alleviate boredom etc...

To help with the cost of the trips, I could rent out my place on air bnb while I visit them. But I have my reservations, as I've never done it before.   

A couple of things that make me hesitant are just this idea of having people living in my place and 3 females downstairs. It could get strange?

I have a friend that tried air bnb, he had some guys stay there and they had done identity theft and stolen credit card, he caught them unscrewing the bulbs from his security lights, so they scarpered and he called the cops. It wasn't the only time he had a problem like that.

Nowadays he rents his place out as a furnished rental to people in the city on business contracts. He still says how he should be renting it out on air bnb as he could get x$ more that way... yet he doesn't, and doesn't really have an answer as to why not.

I can only presume it's because in reality it's a pain in the neck.

Has anyone got any experiences to share, both good and not so good?  Anyone tried it not as a full time thing, but just while they were away on holiday?

I live in a city that has less than 1% vacancy rate, so there's lots of demand.   But I'd just be away from my place for maybe 3 months a year for the next 3 years or so. Then I'll be ready to sell and move either to the east coast or back to the U.K.

So I guess the question is how to best rent out my place for 1 to 3 months a year without it going wrong, and not feeling anxious at the thought of what could go wrong.

One thing comes to mind is that time to time the parents of the students downstairs come to visit them and stay in hotels. I could put the word out that they could rent my space and just kind of plan my trips around the times they would like to stay here.

Another is I have friends and friends of family in UK that might like to stay here and rent while I'm away. That too could be OK... it's just the thought of some kind of random person staying here that has me a bit bothered. 


sammybiker

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Re: How to try out air bnb to see if it's for me?
« Reply #1 on: December 01, 2018, 03:40:54 PM »
I've had nothing but great experiences, including renting both my entire place as well as a bedroom in a small 2br apartment (great location though).

I would recommend getting your place setup and trial it for a couple of weekends to get a feel for it.  Stay with friends or take a roadtrip and give it a shot.  You'll know pretty quickly if you dig it or not. 

Also, if you're in such a high demand area, hit up a few Airbnb management folks and see what the fees look like. 

pudding

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Re: How to try out air bnb to see if it's for me?
« Reply #2 on: December 01, 2018, 08:10:20 PM »
Hey Sammybiker, thanks for your reply. That's the kind of thing I wanted to know... It's like I suspect I might be missing out on a good thing, but need a few people who've done it already to chat to and learn how to do it right.

I'll look into the Airbnb management idea too.

Shane

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Re: How to try out air bnb to see if it's for me?
« Reply #3 on: December 01, 2018, 09:00:28 PM »
Paula Pant did a good post on her site that might help you decide if Airbnbing your place is right for you. It's actually a series of posts. The link above is to the first one.

pudding

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Re: How to try out air bnb to see if it's for me?
« Reply #4 on: December 01, 2018, 09:20:08 PM »
Hi Shane, thanks so much for taking the time to reply! I'll check it out now.

lhamo

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Re: How to try out air bnb to see if it's for me?
« Reply #5 on: December 01, 2018, 09:48:32 PM »
The idea to rent to the parents of your downstairs tenants is great -- you get some money for your travels and someone (a relatively known entity) to stay in the place while you are gone, the tenants get a place right upstairs for parents to stay.  win win if you ask me -- I'd talk about it with them and do a trial run and see how it goes.  Much less hassle/risk than air bnb

Dicey

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Re: How to try out air bnb to see if it's for me?
« Reply #6 on: December 02, 2018, 01:39:09 AM »
Paula Pant did a good post on her site that might help you decide if Airbnbing your place is right for you. It's actually a series of posts. The link above is to the first one.
Thanks for posting this, Shane. In addition, I'll bat signal our own @waltworks, who also has experience.

waltworks

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Re: How to try out air bnb to see if it's for me?
« Reply #7 on: December 02, 2018, 09:01:47 AM »
Bat signal received!

My experience may or may not be helpful. Long story short: it wasn't worth it for us *as compared to renting long term*.

Your situation is a bit different since you're basically just trying to make a few extra bucks when you're not home. Assuming you're ok with having strangers living in your space, that seems fine. But most people aren't really ok with strangers in their space. I can't answer that for you.

In more general terms, AirBnB is massively oversubscribed on the landlord side in a lot of places. People who are bad at math figure they'll get rich renting a place out, and once enough people do that, prices get pretty low. Around us (ski town, though we live about 4 miles from the actual lifts) lots of people with similar basement apartments were renting them on AirBnB for like $60 a night.

Now, in peak season, you can do way better. But that's only 3-4 months a year. You kill it and make $200 a night during ski season and then you do terrible the rest of the year as everyone cuts their rates to nothing. It's also *work* - you have to deal with guests, keep the place clean, replace worn and damaged items, etc. If you hire all that out, you make even less money.

After about 18 months of AirBnB (DIYing everything) we made about $22,500 after expenses, so $15k a year. I'd estimate there was 150 hours of work involved. Long term rental rates for a place like ours are $1300-1500 a month, though. So for almost *no* work, we could make the same or even a bit more money. That was not a hard decision to make and now it's rented long term to a nice couple.

Again, YMMV. The time to get rich with AirBnB was 5+ years ago. The word is out and it's basically just like running a tiny hotel with a ton of competition now in most places.

-W

jodelino

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Re: How to try out air bnb to see if it's for me?
« Reply #8 on: December 02, 2018, 02:08:38 PM »
Starting with your student tenants is a great idea. They may have other family members who would like to come for extended visits/semester abroad, etc. if they knew this was an option.

You could also try the local college/university housing office to see if they are looking for short-term housing for visiting faculty members for a semester.

I have a condo that I rent short-term year-round on VRBO/HomeAway, and that works well for me, but I would not rent out my primary home to strangers--too much personal stuff to put away/lock up. When we travel, we have trusted house sitter friends who stay here and take great care of the place.

Also, before you get too far into Airbnb, check out local laws on short-term rentals. You may need to become licensed in order to be legal.

pudding

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Re: How to try out air bnb to see if it's for me?
« Reply #9 on: December 03, 2018, 01:48:37 PM »
Bat signal received!




Your situation is a bit different since you're basically just trying to make a few extra bucks when you're not home. Assuming you're ok with having strangers living in your space, that seems fine. But most people aren't really ok with strangers in their space. I can't answer that for you.

Although I have 2 bedrooms in my place on the middle floor, one of which I use as a small home gym. I thought about putting a bed in there, then a lock on my bedroom door. That way I don't have some stranger sleeping in my bed and could quite easily put my own things in my bedroom and lock it off.





Thanks for bringing that up re; strangers living in my space. I think it's the bit I struggle with and maybe it's more than just a case of how much money I could get.
« Last Edit: December 03, 2018, 01:51:14 PM by pudding »

pudding

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Re: How to try out air bnb to see if it's for me?
« Reply #10 on: December 03, 2018, 02:10:45 PM »
Something that's bothered me for a while is that I might be able to make a lot more money renting out on Airbnb than I do renting out to the students.   

I have a friend of a friend that had a similar house to mine and a similar set up.

We both have a house on 3 levels, she lived on the middle floor as I do, and she rented out her suites on the top floor and basement through Airbnb.

My friend said she made 90k a year!

I said I found it hard to believe.

But, she sold her house and moved to a small town to raise her kid there. The realtor foolishly put in the listing that she'd grossed over 90k year pervious off Airbnb and the local paper picked it up and she got busted for claiming it as her principal residence.   

So apparently it was true that she grossed 90 grand!

At that time I grossed around 40k renting to students, so 50k a year more doing short term rentals!

Since then the city have clamped down on short term rentals and you can no longer rent out your whole place like a hotel, also you have to get a business license off the city.

But I do wonder if I'm leaving money on the table, as I'm renting to 3 students anyway, if short term rentals doubled the amount I could get and for not much more trouble than I go through now, then that would be sweet!

https://thinkpol.ca/2018/05/20/vancouver-homeseller-boasts-making-92500-airbnb-last-year/

waltworks

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Re: How to try out air bnb to see if it's for me?
« Reply #11 on: December 03, 2018, 03:20:57 PM »
Assuming about 25% vacancy which is typical for AirBnB, she would have needed to average something like $300 a night. That's *really* hard to pull off unless you are renting a whole house in a desirable location. I have a hard time imagining anyone doing that with a portion of their residential house unless it's directly at the ski lift/concert venue/surf break.

The fact that she got in trouble for doing short term rentals doesn't have any bearing on whether she actually made as much as she said.

I mean, I ran an AirBnB for a while that is now a long term rental. It was a ton of work and no more money - and I live at a ski resort. I am always really dubious of people who are claiming to make a fortune doing it.

-W

pudding

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Re: How to try out air bnb to see if it's for me?
« Reply #12 on: December 03, 2018, 08:19:38 PM »
Assuming about 25% vacancy which is typical for AirBnB, she would have needed to average something like $300 a night. That's *really* hard to pull off unless you are renting a whole house in a desirable location. I have a hard time imagining anyone doing that with a portion of their residential house unless it's directly at the ski lift/concert venue/surf break.

The fact that she got in trouble for doing short term rentals doesn't have any bearing on whether she actually made as much as she said.

I mean, I ran an AirBnB for a while that is now a long term rental. It was a ton of work and no more money - and I live at a ski resort. I am always really dubious of people who are claiming to make a fortune doing it.

-W

In her case she had 2 suites, one on the top floor and one on ground floor. Both renovated and in a hip part of the city. I'm pretty sure that she did earn 92k in a year, as it was stated in the for sale advertisement, so I'm thinking she could have verified it. 
« Last Edit: December 03, 2018, 11:05:52 PM by pudding »

smoghat

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Re: How to try out air bnb to see if it's for me?
« Reply #13 on: December 04, 2018, 05:56:16 AM »
Friends are paying around $3k a month in rent (the going rate where they live, but they could live a commute away, especially because they work on their own most do the time and pay 1/2 that). They haven’t done well with savings in their lives. They travel a *lot* and eat out all the time. So they bought a house in the countryside. I was excited for them! But then they told me they were going to Airbnb it out, that they wouldn’t live there. This was just a way to make money. Oh yeah, have to get a mortgage and claim it as a principal residence too. Their “break even point” is roughly 1/2% monthly gross, but I guess they are expecting a 30 year mortgage so the bank can rob them blind in the meantime (and just how will they ever get a mortgage on a real primary residence if this is their fake primary presidency?), when they should be shooting for 1%. To generate the 1/2% monthly gross, they will have to rent half the month in down season. The problem is I just checked and there are much nicer places going for the same or marginally more (10%) a night and they aren’t rented for this weekend even though the local ski area is open.

Um, good luck with that.


« Last Edit: December 04, 2018, 06:35:03 AM by smoghat »