Guys with AirBNBs, what kind of market research did you do before getting into it? Been looking at lake houses close by and think there is a good opportunity to at least offset a lot of cost by renting it when I’m using it. Trying to look into demand on rental sites and things seem pretty booked up, but not sure how much of that is booked or just not online for owner usage.
Don't know anything about lake houses but can't imagine it's any different, they should have rental records included with the listing that any realtor can pull for you.
I'd just look at comps on Air BnB. I belonged to the largest realty company in my house's area for a decade. They used all sorts of research and formulas to come up with their recommended rates. I looked at similar neighboring houses on BnB and set the rate 1k higher than I ever did with the realty company. Within a week I was rented full through August.
In deciding to do it I: -knew the market intimately -looked at AirDNA -looked at comps on Airbnb and their blocked dates Then guestimated occupancy and nightly rate and did the math on breakeven.
The best thing about this market is, worst case scenario it sucks and you don't like it or it's not making any money, just sell the shit. You've got yourself an appreciating asset so it's fairly limited risk.
Yeah I’ve been looking at it as a good way to get a house at the lake a little quicker then I planned. If I could offset just half the payment I would be in really good shape.
Looking at BnBs there for a week this summer. Those mountain views from the lake ...hnnng. We usually do Gaston bc it's just so close to home.
Ive never really spent much time up there recreational, but I want to. Mainly been up there for work related things, but yeah there are some gorgeous areas.
This has been a fucking wild ride. Appraisal came in super low, so seller cut the price significantly. But I still had to come up with some more funds on top of what the bank was willing to finance to meet that price. Was able to pull together the money and just got final clearance to close tomorrow. Just ordered a bunch of lumber, going up there this weekend to build an outdoor shower and turn the yard into an IG influencer's dream. Fuck yes.
found you a vacant lot in a nice spot on Lake Chelan. Build something here and let me use it a few months a year https://www.zillow.com/homedetails/112-Crystal-Crest-Dr-Chelan-WA-98816/91543696_zpid/
I love how the south side of Lake Chelan around Chelan looks like Tuscany and the north side at Stehekin looks like a fjord.
Not many sub-200sq ft homes around Chelan. Not sure the tiny home business model would be as welcome.
After a little less than one year, I got my first sub-5 star rating -- for not enough firewood kindling. Went from a 5.0 to a 4.97. Bullshit. Hope to have number 2 up and running by August -- gonna be close.
Photographer scheduled for August 15, it'll be live after that. Should be perfect for Labor Day. Question - how much would it deter you if a place does not have internet or cell service? My place has very minimal cell service, can maybe send a text at night when everyone's asleep, and there's no internet. Hope to have internet in a few months whenever Starlink becomes available (their website says "mid-to-late 2021"), but going to have to market it as "offgrid" for the time being. There's a little town 5 minutes away that has perfect service, and you can even make a phone call at the end of my driveway, 100 ft from the house. Just where I'm at is a complete dead area.
Our place has great cell service and we went without wifi for several months trying to keep starting costs low and at least 1/2 of our guests still asked about it even though it clearly wasn't on the listing. So we finally got it.
We had terrible satellite internet for a while and people complained. Luckily they ran fiber soon thereafter and it helped our bookings tremendously
Depends what I'm there for. My son and I have stayed in yurts with no cell/wifi and planned for it. But if I'm not there for backpacking I want one or the other.
I gonna have big, bold all caps right when someone books: "THIS PLACE HAS NO CELL SERVICE AND NO INTERNET - YOU ARE FREE TO CANCEL NOW AT NO CHARGE" Need Elon to get off his ask and get some satellites up around the North Cascades.
I'm just gonna wait for Starlink at this point. I'll still make money without internet on my lowest projections, and hopefully its available by end of summer.
You have to have 4WD to access my rental. I have "MUST HAVE 4WD TO ACCESS THIS HOUSE" all over the listing multiple times and in the auto messages that go out. Amazingly no one has had to cancel yet. I do have to turn away a lot of inquiries though, "Will my mini Cooper with AWD work?". Nope, it will not.
I don't think I've ever heard a good review. That's an option locals have suggested, but I'd rather not pay for something so unreliable. Gonna bill it as some sort of glamping thing. "50% Airbnb, 50% off-grid glamping," something like that. Something to get the ppl going It's less than 10 min from N Cascade National Park, less than 15 miles from Mt Baker, next to amazing outdoor activities -- hoping the type of ppl that visit this aren't totally reliant on cell service. What will hurt is no bookings from ppl that need to conduct business while staying. Have a few of those at my tiny home, but the internet is awesome down there so it hasn't been an issue.
Someone buy this and let me run it. 6.5 miles from my current tiny home https://www.redfin.com/WA/Ashford/55313-265th-Ave-E-98304/home/2700969 https://www.vrbo.com/1080016 https://www.vrbo.com/2084057
Yea as long as you make it overly and annoyingly clear in the listing you’ll be good. and probably cheaper.
For real, we’ve been discussing it. Des Moines doesn’t seem like an area that would be constantly booked, so we’re looking at buying out of state and hiring a manager locally. That specific cabin isn’t in the cards immediately, but the area is a possibility we’re considering.
That property is TWO cabins on one parcel, which makes it so enticing. And it's booked throughout 2021. But yea, Ashford is probably more than 50% Airbnbs. Perfect little community for it. I think sticking around National Parks/awesome outdoor areas will (hopefully) attract a certain demographic that won't party/damage your shit, and will also be out exploring most of the time rather than inside the rental itself.
Help me understand the appeal. 35,000 in gross and 500k purchase. That doesn't reconcile. Assume value add somewhere?? Seems like it would need to be $75,000 or more to justify that price. That'd get you 40,000 NOI at 8 cap with 45% opx. That's 259 nights a year at $290 total rent/night...what am I missing?
I don't know what any of that shit means. Maybe like half of it. Mine sits at about 65% occupancy without renting Jan - March. You'd have to put down 10-20%, so $50K-100K up front. 30 yr mortgage for $400-450K would be around $2,250-2,500/month. Call it $3K with utilities. Each unit would bring in $3K/month gross. Definitely over $5K/month combined from April - Dec. It would net more than $2K every month. It'd take you some time to get your down payment back, but you'd still be building equity and in the black every year.
Those are income based metrics and questions. At 45% opx and 35k rents it's a 3.8% cap (noi/price). Seems like it's a stretch to get the underlying assumptions to make the investment an 8 cap. Lot of work for an 8 cap much less a 3.8%cap. Curious what I'm missing.
I think what you’re saying is the house/property is listed much too high. I know Zillow isn’t the best at having accurate prices but the zestimate is $243k. That would square your figures to get close to an 8 cap right?
He wants cash flow on a monthly basis. While overall numbers matter, he's not applying your traditional metrics to evaluate properties. He wants to retire and have an income stream.
We're house hunting in the N Ga mountains with an eye toward having room on the property for a tiny house or a yurt or two. We looked at one place that had two yurts generating a total of about about $2k/week gross. Unfortunately, the house itself had polybutylene plumbing and the owners weren't interested in negotiating, so we had to nope out.
You are answering your own question well. But my concern is that I don't understand why you'd invest in a sub 4 cap airbnb when you could pick an 8 cap airbnb? When you are an income RE investor like me you want high caps and little work. High caps usually come with a lot of work. They are high for a reason. Here it's penciling out to a 3.8cap and airbnbs are a lot of work. That doesn't reconcile... I do not know it all, so I feel as if I'm missing something in the assumptions...hence my questions to BamaNug .
I don’t understand why CAP is main figure for investment properties. Why do we not evaluating return on cash invested?
Because that is a financing decision, not reflective of the asset itself. Comparing IRRs across investors is far more complex.
We own an AirBNB that does pretty well. Looking at maybe adding another, but prices are absolutely bonkers and construction costs seem even worse if you can find a builder. Property values in the area are still approachable, though. And while yurts are just too crazy (to me), I've found a pretty rad, higher end tiny home prefab company. Any experiences out there worth sharing?
This is what my tiny home is. Very affordable and gets great reviews. My only concern is that it will break down/show age much quicker than a stick home. I plan on selling it in 2-3 years before that happens, hopefully.
Yea that's probably my biggest concern too. I've heard that with RV's they're kinda built shoddily since people only use them a few times a year. Tiny Homes strike me as that, but used all the time :\ I've got way too many questions than appropriate for TMB, but.. in general has it been a positive experience? Guests are cool with it and its had a decent return?