Author Topic: Evaluate my plans  (Read 2871 times)

kevinb421

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Evaluate my plans
« on: March 19, 2015, 09:06:14 AM »
Hello again everyone!

I am moving to Estes Park CO from Iowa in 3 weeks. The property I am looking at is 2 buildings, one cottage and one duplex. The duplex is a 2 bedroom 1 bath 850 sqft and a 1 bedroom 1 bath 600 sqft. Both have separate entrances, parking, kitchens, etc. The cottage is right next door and my plan is to put some money into them and get them setup as vacation properties on sites such as Airbnb.com. I have never used the site before but from a little research I believe it is exactly what I am looking for. The goal would be, short term rental income and the ability to block off dates when friends/family come to visit and give them a place to stay that has privacy.
I am moving to Estes and will be working  from home which makes the upkeep on a vacation rental possible.
I am just looking for any advice related to Airbnb or short term vacation rentals. I have had rental property for the past 5 years but it has always been to long term leases.

Thanks for the input. All advice is welcome.

Wile E. Coyote

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Re: Evaluate my plans
« Reply #1 on: March 19, 2015, 09:09:26 AM »
I don't have any experience with Airbnb so I can't help, but I do love Estes Park.  If you do this, I may need to rent from you!😄

kevinb421

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Re: Evaluate my plans
« Reply #2 on: March 19, 2015, 09:10:32 AM »
I am committing right now to a MMM discount!

waltworks

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Re: Evaluate my plans
« Reply #3 on: March 19, 2015, 09:46:37 AM »
Estes is a tourist town, so you will need to pay hotel taxes for AirBnB, most likely. Some places the city won't check or notice, but Estes probably will.

Check with the city about the legality of what you're doing and fee/taxes/licenses needed NOW, rather than getting fined/stuck with huge back hotel taxes in a few years.

Other than that, seems like a fine plan assuming the numbers work. But you didn't provide any so it could either be horrible or great.

-W

kevinb421

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Re: Evaluate my plans
« Reply #4 on: March 19, 2015, 10:04:38 AM »
Numbers are a little up in the air. The property is listed for $295k. It has been listed a long time so I think I can get a considerable discount. Most residents of Estes don't want to deal with something like this. Even though it is a vacation town I feel like the residents don't really care for their presence.

Even though that is higher than a single family would cost me, it isn't much higher and I would not need a drop of income to comfortably pay the mortgage on that.
When I research other properties in the area I think $100 a night for the 2 bedroom is more competitive than what I see and $75-80 for the 1 bedroom. This may even be low but I prefer the rooms to be filled and get the reviews started.

I am estimating $7k in upgrades to the 2 bedroom to make it into the cabin feel, buy furniture etc and $5k for the 1 bedroom. I am also estimating 45 days after closing until I can take reservations. This would put my opening towards the end of June. Again, I don't NEED this place to produce any income. The income is to pay for the furniture, help a little bit with the mortgage and then have a place for friends/family to stay for free when they visit.
My financial situation is not one where this needs to be super profitable, but it would be really exciting to make it into a great income producer.

ems2014

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Re: Evaluate my plans
« Reply #5 on: March 19, 2015, 10:35:14 AM »
I've rented vacation places through VRBO.com so you may want to consider that, as well.

kevinb421

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Re: Evaluate my plans
« Reply #6 on: March 19, 2015, 11:01:03 AM »
Yeah, I intend to use all the available sites. I don't really want to go the craigslist route as I want the protections offered by using the broker sites.

waltworks

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Re: Evaluate my plans
« Reply #7 on: March 19, 2015, 11:08:10 AM »
Read the case study sticky and re-post some hard numbers or at least estimates (and figure out what you'll pay for your hotel license/taxes) if you want actual help here. If you are just dead-set on buying this place (if it's been on the market forever that's usually a warning sign) and want some high-fives, great - sounds cool. Based on the very limited info here, I doubt you will make money but if that's not your main goal, no big deal.

-W

kevinb421

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Re: Evaluate my plans
« Reply #8 on: March 19, 2015, 11:15:49 AM »
I know the numbers well enough, my advice asking is more on the risks and costs of having short term rentals and reviews of success rate with the vacation rental sites. Sorry if I wasn't more clear.
I know my hotel tax is just over 10%, Colorado does not require a hotel license. The things I don't know are how to screen people on the sites, what to look out for. How to avoid negative reviews, what level of service have you experienced in the past. What have been people's occupancy rates, etc.

affordablehousing

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Re: Evaluate my plans
« Reply #9 on: March 19, 2015, 11:33:08 AM »
I used to rent my apartment on Airbnb and here's my advice. First, I think you can rent your primary residence out for up to 2 weeks tax free (federal). I believe this was to allow for peopel renting it for movie sets, etc. Ask Airbnb for a photographer to come out and shoot your place, helps it look a lot better and saves your time. Also, you'll get way more traffic if you have non-ikea stuff in there. 99% of Airbnb units have ~$800 invested in total furnishings and look like crap. Distinguish yourself and save money buying $500 of flea market furnishings. Get a digital door handle/lock. Make sure you have a good covered place for people to smoke outdoors away from the door and put hardwood in if it isn't already. Have a no party policy and take a deposit through the site, more deterrent than actually useful. Laminate some cards with local sites/restaurants etc. to make it seem a bit more like a hotel. I think peopel will respect the unit more. I think it's the ultimate in income maximization, nominal investment, and maximal flexibility. Had a crappy tenant? they'll leave at the endo f the stay and you can close your calendar and reevaluate no hassle.