How do you make the finances work?

Oh, I DO want to know!

Maybe there’s some way we can at least get some Airbnb practice in here in North Carolina. I always wanted to try it but don’t love the idea of a home share, especially as the space in our house that would lend itself to short term rentals doesn’t have a separate outside entrance.

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Smart move, you wont regret it.

JF

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Thank you for clarifying. Definitely skip the NH place. Too much risk and you already knew that the numbers don’t really work. Don’t sweat it and think next steps.
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There is nothing wrong with being interested in STR. I would suggest you see if you might start out small with a part-time “home share”, a bedroom or basement renovation - to see if you actually like hosting. It is not for everyone. Best to find that out without buying a property.
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Even still, make sure that even if you consider an experimental home share that you are smart about it - that it does not violate your homeowners insurance policy.

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I watched a duplex for a year before making an offer, first offer refused, 2nd offer sold.
Spent some money gradually over 3 years …now returns 20% on investment.

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It can be done any way you like. Some hosts do what they can remotely, some have a cohost handle everything.

As far as how people can afford these investment properties, you should have heard those over-extended hosts screaming and yelling last March when Airbnb cancelled all bookings when Covid hit. They were all living on the edge and were completely dependent on constant rentals. “I have 17 listings and 8 mortgages! I’m going to have to sell some of them!”

Yes, get out the tiny violin. Meantime there were single moms renting out a room or two to make ends meet who were going to lose the only home they had, where they and their children lived.

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I do not feel that this is the time or the market to purchase a big property hoping that STR will make your payments! Most of us have had our properties for many years and have now weathered (or are still) the Covid storm with no assurances! The pandemic is not over and we make our decisions day by day!

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@MisaMisa I don’t think you put any dates in when you looked at other Airbnbs in Concord. Before I put in dates I saw places for $150. When I put dates in, 3 bedroom listings are getting $245 - $540 at different times (and Oct looks more or less sold out). There is no way your place would go for as low as even $150. Maybe do more research with dates applied to your search and don’t forget to enter “entire place” and “3 bedrooms”. There’s probably not much available for next summer yet, but I imagine that is when you’d get your highest prices. At least get a full and accurate picture of your market.

However, I agree that it is probably not worth having the extra weight on you. Moving can be hard and it gets emotional. I have moved a ridiculous amount of times and there are still some places I miss so much but I am grateful that I don’t own them and especially that I am not running an Airbnb in any of them.

If you think the house will increase dramatically in the next year, you might try it out for a year and see how it goes and then sell higher if it doesn’t work out. People are still fleeing more congested areas like Boston so it’s possible you will get a good amount for your place either way.

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I own my house outright and rent out half as STR on Airbnb and Vebo. When I am not in perpetual lockdown it provides me with a decent extra income. Initial set up costs were cheap as I bought most of the furniture on Ebay. People sell the most high quality things cheaply because they can’t bear to thrown them out. Somebody else bought another house in my village and rented out the whole place on Airbnb for three times what I charged but it was a whole house, better set up and bigger. I figure a rising tide floats all boats and “competition” makes an area look more desirable. Especially if they are not undercutting your prices to get business. But they stopped trying to rent it out after 12 months. I estimated occupancy was about 20-30% except in Summer. I figure they weren’t getting the bookings they thought they would and the stress of getting a whole house cleaned in between guests wouldn’t have helped. So I do wonder if you can make buying a property and paying off your mortgage and all the initial and ongoing costs with Airbnb. Particularly in the country where rents are generally lower but house prices can be sky high in desirable weekender areas. If it was me I would appreciate the rental subsidising my mortgage but not expect it to pay it in full and have a backup plan to keep up payments given recent history.
Just my two cents worth.

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Finally being mortgage free was a nice to have prior to 2020. The last 2 years it has been a sanity saver.

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medium term big house, short term MIL suite maybe?

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As others have said, take emotion out of the finances. If you can afford to buy and maintain the house even without any rental income at all, then you can afford to buy it. If you would require any amount of rental income, then don’t buy it.

We’re still in the midst of a worldwide epidemic. It’s entirely possible that another shutdown will be necessary. Maybe more than one.

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You can’t afford it so do not do it. NO.
Also, with all those possible rental scenarios you have thought of, have you researched the local regulations of renting through the town zoning ? And what will you do if the town changes regulations…which they do all the time now…

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I’m in the same boat - own my home outright and rent out a room and bathroom. Furniture is all antiques that have been handed down in the family for forever and are sturdy. I chalk painted pieces to upcycle them and bought a new headboard/footboard. Other items have been thrifted. People seem to like it and it’s not stuffy so they feel comfortable.

Pre-Covid my bookings were amazing. 2020 was going to be a banner year and I was thrilled.

Now it’s pretty grim and I’m re-evaluating FurnishedFinder (I was an early adopter on their platform and wasn’t impressed).

Thankfully I don’t rely on the income, but it would be nice to have more guests. I miss my snowbirds and Canadians coming through and the home buyers needing a place to stay. Need to work on rebranding the listing and taking new pictures.

In your shoes, I’d do a bit more research on those numbers for rental costs. The STR seems really low, especially for your area.

Forget STR, it’s too stressful for a newbie who is in NC trying to manage NH.

Go for MTR or LTR and turn the back cottage into a functioning studio with kitchenette and a separate listing, possibly STR. Or look for a tenant who might turn into a reliable co-host for reduced rent.

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We hosted 15 exchange students (and they do NOT pay you, LOL), so I might like to try a home-share STR—and we have a spare bed and bath on the first floor—but it kind of freaks me out. Sharing the kitchen? Walking through our home to get in and out? I may try it, though.

Yes, I did…but I didn’t know they change often. What a pain!

Thank you. We could manage without the rental income but we would be dipping into savings and retirement, which I prefer not to do.

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Hmm, interesting! I don’t have my research notebook with me, but I looked at various places in town with a similar capacity and didn’t see anything nearly that high! I especially checked out places that are walkable to downtown since that’s where this house is. A lot of places did come up in my search that are on a lake in a nearby town, but I didn’t consider those since this house is not even near lakeside.

Smart! You have a lot more patience than I do. :sweat_smile:

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Oh, wow…how the heck did people even manage to buy that many houses if they were not in any kind of financial shape?

It’s really quite localized.

I live in El Paso TX and there have been zero local regs implemented here in the 7 years I’ve been hosting. The only thing that’s changed is that Airbnb started collecting some of the taxes in with their fees.