Air bnb

[Dansignal]

There is an interesting phenomenon occurring in The Woodlands, Texas market street area near The Cynthia Woods Mitchell Pavillion.  The Pavillion is consistently at the top of the world in annual attendance (not hyperbole). It is 35 miles north of Houston.  People come great distances to attend concerts.  Hotels in the area are expensive and remain 90% plus occupied and are sold out around Pavillion events. People are renting apartments within a short walking distance to Market Street, Shopping, Restaurants, and The Pavillion and converting them to Air BNB'. Has anyone done anything similar to this. It seems obvious that location is the key along with having a manager handle all of the client interaction, cleaning etc.  Just curious about the actual experience of owing a property to list for profit on a site like Air BNB.

[PhysicianOnFIRE]

I met a gal this spring who does this exclusively and has never really worked a standard job in her young adult life. She was recently featured on MMM in this article.

[hightower]

Great article, thanks for posting that link.

My wife runs an airbnb room out of our home.  We happen to have a perfect set up for it.  We live in an old 1880's town home in a popular downtown neighborhood.  Our house was built with a back staircase and separate "hired help" bedroom.  So, we are able to keep a couple of doors shut and offer a private bedroom, bathroom, and separate entrance from outside for an airbnb room.  It works out remarkably well.  It's quite surprising how many visitors we get to our town for all sorts of reason (business, travel, weddings, sporting events, museums, etc).  It was all my wife's idea, so I take zero credit.  She manages it herself for the most part (I help when needed of course).

It easily brings in $1100 or so a month.  Of course we have to pay taxes on that, but we can deduct a lot of expenses such as utilities, home repairs, supplies, etc.  We could squeeze more out of it, but we like to leave a day off in between bookings to give us ample time to re-set/clean the room for the next guest.  We could also raise the prices slightly now that we have so many positive reviews.  Regardless, it requires minimal effort these days so it's totally worth it.

The girl in the article runs quite an impressive operation.  She's very smart and remarkably business savvy for someone her age.

As to the OP's questions, renting an apartment from someone with the intention of then using it as an airbnb rental is no longer a very viable option in my opinion.  And often times it's against the rental agreement.  In many larger cities it's illegal.  So, I would not recommend doing anything like that.  I could see purchasing a condo or apartment as an investment property and managing it as an airbnb.  However, certain HOAs would look down on that as well.

There's one thing that the article points out that I think is absolutely spot on.  Being an airbnb host means you are in the "hospitality" service industry.  It's not a "set it and forget it" kind of real estate investment.  You have to think like you're in the hotel business.  People are often looking for an experience when they rent airbnb rooms.  They want a unique space, for a good price (you have to be priced better than hotels imo because that's kind of what drives most people to look for an airbnb...they want to save $$$), in an interesting part of town.  My wife goes to great lengths to make sure that she's providing a welcoming, clean, unique experience.  I also agree that renting entire units/homes is also probably a lot more desirable.  People often travel with family to weddings, school events, vacations, etc and like to find a place to stay together as a group.  If you have the opportunity to get some reasonably priced property in a desirable location and have an interest in making the space nice and providing for a pleasant experience, you can do quite well with airbnb, as the article shows.

[The White Coat Investor]

One of our back-up plans is rent out our basement (~1500 sq ft, two bedrooms and a bath, separate entrance, we basically only use it for storage and guests) as an AirBNB to skiers during the Winter. 8 miles to the resort. We could even put in a little kitchenette and a hottub right outside the door. The only reason we haven't done it is we can afford not to fully utilize our resources to increase our income.

[Lithium]

I stayed at an AirBnB when I skied in Aspen.  It was awesome and a great deal, and the family was terrific.  I would never host in a million years though.  I can't believe families let strangers sleep down the hall from kids.  I literally see patients every week who get hurt that way.

[DoubleMDs]

Unfortunately real estate near Houston may about to be much cheaper. Hope it's not as bad as they say.

[Complete_newbie]

Have airbnb setup in Houston but not in woodlands area. It's in another hotspot that gets lotta visitor traffic. Doing very well and is cash flow positive. Do a good benefit analysis - I spent a lot of time on spread sheets and thinking before pulling trigger (not alone with business partner to further mitigate risk)

[mobilehomegurl]

It's definitely up and coming in the world of real estate investing. Unfortunately, a lot of hotels are trying to block it out due to competition. Some cities have started imposing additional taxes and/or restrictions on these types of accommodations. It's definitely filling a need: supply and demand. Will be interesting to see what the future brings!  

[adventure]

We rented out a bedroom with AirBnB for a while in a previous house. Easy, brings in serious cash, and fun to meet folks. Great if you can make it work. Thinking about an addition on the house to create a separate MIL suite for renting out. It's on the someday plans; haven't done any financial analysis on it yet.

Worked with a guy who put his place up on AirBnB when a colleague would come to town. Work pays for lodging, so this guy (via AirBnB) gets paid from work to have his buddies stay with him!

[The White Coat Investor]

Lithium wrote:

I stayed at an AirBnB when I skied in Aspen.  It was awesome and a great deal, and the family was terrific.  I would never host in a million years though.  I can’t believe families let strangers sleep down the hall from kids.  I literally see patients every week who get hurt that way.

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Yea, I don't think I'd go for that. My idea is to deadbolt the basement door and have them use an outside entrance. But honestly, I'm really not very interested in going into the hotel business. It's a back-up plan, and pretty far down the list.

[PhysicianOnFIRE]

Lithium wrote:

I can’t believe families let strangers sleep down the hall from kids. I literally see patients every week who get hurt that way.

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You actually see kids getting hurt by strangers sleeping down the hall on a weekly basis? Remind me not to take my family to wherever you live!

AirBNB has a reviewing screening process that lets the owner approve or disapprove the tenant. You don't know exactly what you're getting, but a history of posiive feedback from other owners is a good start. I also wouldn't have strangers sharing the house. Separate entrance, standalone apartment, etc... would be the way to go.

[VagabondMD]

I am sitting in an AirBNB in Memphis, TN, as I type this. It's a duplex, with the owner living in the adjacent unit. I have stayed in other duplexes and carriage houses in the past. It seems like the ideal model for an AirBNB side hustle, for someone who otherwise has a career or is retired.

There is no way I would have strangers in my house, and even if I (and my wife) were okay with it, the dogs would certainly not approve of such an arrangement.

[Hatton]

I agree with vagabond my 80+ pound pit bull /great Pyrenees's would not like guests.

[Lithium]

PhysicianOnFIRE wrote:

Lithium wrote:

I can’t believe families let strangers sleep down the hall from kids. I literally see patients every week who get hurt that way. 

Click to expand…

You actually see kids getting hurt by strangers sleeping down the hall on a weekly basis? Remind me not to take my family to wherever you live!

AirBNB has a reviewing screening process that lets the owner approve or disapprove the tenant. You don’t know exactly what you’re getting, but a history of posiive feedback from other owners is a good start. I also wouldn’t have strangers sharing the house. Separate entrance, standalone apartment, etc… would be the way to go.

Click to expand...

I guess there's a difference between complete strangers and hookups mom brings home from last call, exchange students, and distant relatives I haven't seen in over ten years, but not in how much trust I'd allow them to sleep under my roof.

but yeah, MIL apt would be ok.  When I was in Aspen (presumably with a family who didn't need the money that desperately) I was in a basement with two girls under 10.  That's just insane.

[Dansignal]

Thanks for all of the thoughtful responses. My vision is a free standing home in an area ripe for rental such as near a convention venue or lake or ocean. I'm also not comfortable with and will not have a tenant under the same roof.  I've studied the Air BNB site.  They discuss the concept of co hosting where, for a fee, another established host will manage every aspect of the care and feeding of this venture. My long term goal is to have tenants buy a property for me. I'm comfortable with equity and appreciation and the occasional personal use of the property.