How do you make the finances work?


The stars are aligning in such a way that we may be in a position to buy the home we lived in and loved in Concord, NH, before moving to NC to be near my family. I’ve been wanting to do STR for a long time as well, so I thought it could be a perfect situation: we could STR the house except when we want to use it for our own vacations.

However, I’m having trouble making the numbers work and was hoping people here could share their advice and experiences. Having two mortgages would be too much of a stretch for us without rental income, so I ran several scenarios. This is a 2,400-sf house with 3 br, 1 1/2 baths, which also has an area in the back that used to be an in-law but was converted into regular living space. (Now it has just the half-bath and no kitchen.)

The house is in an area with a 1% vacancy rate, and people I know who rent out apartments there say they get people asking to send in a deposit without even seeing the place. AirDNA suggests that an average to shoot for is $117/night and a 73% rate of occupancy. I used these numbers to be safe, even though I see that similar rentals in the area are more like $150/night, at least now through the end of the year.

The scenarios are:

  1. STR for entire house.
  2. STR the main house, convert the rest back into an in-law for a LTR or medium-term rental (30-180 days) for $2,500/month. (I had a call with FurnishedFinder and discovered that Concord is on the top 100 cities for traveling nurses, and 30-40% of them come as a couple, as a group, or with families.)
  3. MTR the entire house at $2,500/month.
  4. MTR the main house, convert the rest back into an in-law as a LTR or second medium-term rental. (Main house $2,500/month, in-law $1,300/month.)

The up-front costs I’m estimating are $20k for the main house (mainly furnishing) and $22,000 to get the in-law set up (adding shower and mini kitchen, furnishing, etc.).

I took into consideration NH’s lodging tax of 9% per stay, ABB’s 3% fee, and property management (since we live in NC). I figured property management at 20% and also calculated a scenario where I instead have a co-host at 10%. I also factored in insurance as well as $4k/annually for repairs and maintenance (using the 1% rule of thumb where you set aside 1% of the value of the house each year).

I was very conservative with the numbers just to be safe: The LTR prices for the house and in-law could/should be more, I overestimated the costs for furnishing, etc. I’m also not sure if the lodging tax applies to MTR and LTR, but I factored it in just in case. Zillow says the house is worth $375k, but it’s a hot market there so I budgeted $400k.

No matter which way I look at the numbers, we end up in a big hole—without even counting the up-front costs of getting the place(s) set up.

Am I missing something? Sorry for the ignorance, but we are brand new to this. I know people who do ABB or LTRs and they are not wealthy by any means…so how does one manage to buy a second house, rent it out, and make it work on an average income?

Thanks so much for any advice, experiences, etc. you can share. And I’ll say it again, we are super newbies to please be gentle. :smiley:

That’s a big home as a STR, especially when you take into account maintenance, utilities, furnishing, etc. why not just look for a cute cottage or cabin if you’d like to use it as a vacation getaway for yourself and rental income? Our 2 AirBnBs are compact and we did most of the reno ourselves plus maintain and manage them- one is on our property and one is closeby.

(PS- where did you get 10% for a cohost fee or 20% property management? Those seem quite a bit less than I’d budget for at least in my area of upstate NY)

Then forget it. If you can’t make the numbers work you’ll end up in the shit at some point.

Classic example, Covid. If you need bookings to simply survive then all it takes is one spanner in the works…

I’m mellow this evening, just been to an Oloroso tasting at the most expensive bodega in Jerez :wine_glass:so that’s the “gentle” versión :blush:



Thank you! (And hey, both of my parents are from Hudson and I had/still have a ton of relatives there!)

I know, I know. You are right. I just love this house so much, and we have an “in” since a friend of ours knows them. The market is so tight that it’s hard to find anything at all, but the current owner knows we’re interested and it sounds like she’ll let us bid before putting it on the market. We also know (most of) the quirks of the house.

I did a lot of random research and read that 20% is the norm for property management but it can go as low as 10% for local cohosts. Is that not the case?

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Haha! Yes.

We have enough in savings that a slow rental market wouldn’t bankrupt us, but I’d rather not have to dip into that.

I just feel like I’m missing some big thing in my calculations…like there’s some way all these people are affording to buy investment properties that isn’t just “you now have two mortgages, whee!” And of course I understand none of it…leverage, equity, it’s all Greek to me.

If you’re that far away you’d need a trustworthy local cohost to be on call when there are guests +take care of other necessary things like platform correspondence, vetting/accepting guests, follow ups, reviews, answering guest questions, enforcing rules, managing cleaning schedule (laundry?), prep and check of Airbnb before guest arrival, inventory, maintenance checklist, buying supplies, etc… you’re looking at far more than 10%.

I’ve been approached several times to manage other people’s AirBnB’s upstate but honestly it’s a lot more work and a bigger commitment than many realize.

You need to look at this strictly as an investment, so it is challenging and the numbers really need to work in a conservative model and be BETTER than simply putting your money into Vanguard Index funds! If you can not easily make the numbers work at 50% occupancy, this would be very risky. And it would be your first STR and entirely remote? Time to move on.
It sounds like you are renting the house you live in and moving 800 miles away to NC? Ok so look to do STR at some point where you are moving to - where you are your own host and local to your stay.


I didn’t know those rules of thumb (re: index funds and 50% occupancy), thank you!

We lived in this house from 2005 - 2011 and then moved to NC to be close to family. However, I’ve missed the area and that house ever since and got wind that the current owners are looking to move. So we would be managing from afar at least for the next 6 years until our son is out of school.

Set aside your FOMO from being given the “inside track” to purchase and your emotional attachment to the house.

Real estate can be a good investment, but I personally wouldn’t buy now as it is still a seller’s market with inflated prices. And, when & if prices come down and you still want to buy, guess what, there will always be another suitable house.

Enjoy your move to NC and dive into your new life there without having to worry about running a long-distance STR, at least for now.


Good to know! I figured that the homeowner was in charge of the platform, vetting, reviews, etc. and the co-host would be on hand locally to manage check-ins/check-outs plus emergencies.

Yes! This is partly an emotional decision, which I know is not exactly ideal. :slight_smile: We actually have been living in NC for 10 years but I cherish the opportunity to get our old NH home back, even if just for vacations. You’re right, of course,. We sold the house for $220 in 2011 and now it would likely go for around $400k. Lots of nice upgrades in the meantime but a lot of it was cosmetic.

That’s a crazy-low price for a three-bedroom house. It works out to be under $20 per night per person if you allow two people per bedroom. No one could make it work at that price.

If the market price is really that low for that many people, then your competitors are owners that already have paid off the mortgage or are renting just rooms in their home and you won’t be able to compete.


Even if you handled all the platform correspondence, you’d be asking for someone to be on call at any time for issues (or even small things, for example a guest says they need extra towels or more coffee on a Sunday morning). To be ready at a moment’s notice to break up a party or deal with a lock that’s jammed… that goes along with a much higher rate than 10%. I wouldn’t co-host for less than 35/40% because I know how much work it takes to maintain a STR and being on call 24-7 is a big commitment.

I think you already know the answer … and i understand the emotional pull you’re experiencing, but its a business decision which you already recognise doesn’t seem to add up financially. if it was you being asked the same question from a family member (son, daughter etc) what would you advise?


Thank you for the reality check! I think the piece I read about it was a little too optimistic in terms of commitment and costs. :slight_smile:

I was surprised that that was the recommendation from airDNA as the comparable rentals I researched seem to be going for hire. But I decided to use that number just to be super conservative.

Yep yep yep. Just talked with my husband and we decided to save our money for frequent trips to the area instead. Maybe someday we will be in a position to buy a house there, even if it’s not that particular house.

I feel foolish now that I even considered the idea, but I guess it would be more foolish to jump in without running the numbers and asking for advice here. I’ve been not very financially savvy my whole life and have been looking to turn that around. Managed it so that we have no debt other than our mortgage so I am pretty proud I am learning. :slight_smile:

Thank you to everyone here for their support and advice! I really appreciate it.

Paying $400,000 for a property you plan to rent short term seems excessive to me. Scary to have two big mortgages. God forbid you become unemployed, will you be able to keep up with two mortgage payments.

Also like you mentioned, prices are up. What if in a few years prices drop and you end up with an upside down mortgage.

If you want to invest and rent out the place on Airbnb, wait for prices to drop or wait for a fixer upper that’s priced to sell.

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Sorry to be a downer. I had to go take care of a spider for a guest not too long ago and drop off batteries after the previous guests switched out all the ones in the house (I don’t even want to know :rofl:) Things come up and hosting is a very hands on gig especially if you care a lot about hospitality and the home :heartpulse:

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its not foolish to consider ideas, especially wishes and dreams and it certainly isnt foolish to ask for advice. Sometimes if you write your ideas down on paper and then look at what you’ve written, it helps you to focus your mind. and interrogate your thought process.