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I’m involved I hate single family homes and air bnb rentals. Homes are annoying. 4-6 unite small complexes or small mixed use 2 retails slots and 2-4 apts above. This way when you have a vacancy or a non payer you still have revenue. Moor doors more $$
What is up with the sudden rash of all these people who with zero experience suddenly want to jump to owning rental properties?
It conversations with people over the past 6 months, I've heard of 5 people that are now interesting in buying up cabins / vacation properties to rent on AirBnb?
These people have zero experience as a landlord, they are completely unfamiliar with the areas, and they aren't even what I'd call financially savvy or responsible people.
They decided to go rent an AirBnb a few times and then its like a lightbulb went off that they should get into the game to attempt to make some money.
Pandemic buying?
Sitting on extra disposable income this year due to all the stimulus / virtual stuff / no travel etc?
I think you are right that it is to generate income. Buy it, fix it up, rent it out (if you're lucky you'll have decent tenants). I mean, in theory it sounds doable... but it really sounds like a headache to me.
There IS a rash of wanna-be real estate moguls....planning their future wealth. Some have well thought out plans, while others are spouting the last article they read. What concerns me is the are almost all focusing on properties that are 150K at most and usually in another state. Most homes are more than 30 years old and they really do not have the liquid assets to replace a major malfunction. One such couple bought a HUD home for cash last year by getting helocs on residence and 2nd home. Repairs were done with savings and cc. They are now doing a cash out on the HUD home they fixed up like new to repay the debt they incurred. It's a condo and it appears to be in the middle of a large legal suit. A legal suit that was not uncovered because they paid cash. They broke a popular rule of investing, never involve your primary residence in your pursuit of rental property.
When you're on vacation paying $2000 a week for a beach condo and you realize you could buy a similar unit for $450,000 your mind starts spinning. Vacation math usually doesn't include accurate estimates of occupancy, expenses, management, maintenance, etc. Short term rentals can be lucrative but usually not for people who have to hire management.
When you're on vacation paying $2000 a week for a beach condo and you realize you could buy a similar unit for $450,000 your mind starts spinning. Vacation math usually doesn't include accurate estimates of occupancy, expenses, management, maintenance, etc. Short term rentals can be lucrative but usually not for people who have to hire management.
I just checked pricing for Roberts Cottages, and your right, they're 2 grand a week, pretty much.
If they were "For Sale," they wouldn't be 450, but your rental # is in the ballpark.
I prefer my investments don't come with property taxes, insurance premiums, or live inhabitants that can threaten to sue me. I stick with my ETF's.
If I were to get into real estate, I'd do vacation rentals. Nothing in which the guest could establish tenancy. Airbnb is a double edged sword. You have free promotion for your property to people who are already registered with the app and have payment methods ready to go (less friction), but with it come Airbnb's own terms and conditions for each the host and guest. Some policies are more guest-centric than I would write myself. Also the service fees may eat up the profits of someone who would otherwise have a viable business model.
My philosophy is this: easy come, easy go. Don't make it too easy. Be prepared for net bookings lower than expected with flaky vacationers who will argue the very cancellation policy they agreed to less than a week prior, asking for exceptions, refunds, etc. With higher bar to entry (an actual phone call, entering guest into our own system, holding our own deposits) your conversion is better because people who can't take the time to pick up the phone often can't take the time to fulfill the plans they made, either. You can also choose to have all-inclusive pricing, and guests don't make decisions based on what percentage of the cost of the stay the cleaning fee is.
A 3rd party platform also gets in the way of the host dealing directly with the card company in the event a chargeback is initiated. Airbnb sure isn't going to refund any of their own fees, much less protect the host from fraudulent, frivolous, baseless, or malicious chargebacks initiated by the guest. I know why many merchants refuse to accept American Express.
They are people who are not paying attention to what is going on around them. I suspect that the deliciously low interest rates are contributing.
All over the country, experienced landlords are dumping properties. Those get snapped up at extra high prices as soon as they hit the market, so there is definitely a new crop of landlords getting into the business.
I don’t know, maybe because they also want to use when not rented? If you can afford it without relying on any rental income it’s a great investment. Renting it out is just gravy.
We bought a place in the mountains with the intentions of renting it out, but decided against it so we can use it whenever we want. One day we will, but in the meantime it’s more than doubled in value since we bought it 4.5 years ago.
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