Should I keep going?

End of year, and I’m comparing Airbnb with full-time rental. My apartment was rented for 231 days last year, and I used it (or friends used it) for 59 days (I don’t live in the same city). The rest of the time was “shoulder” gaps between guests. My net rental income averages just under $3400 per month. This is the same as my gross rental income last time I rented the condo full-time, but is significantly less than I’d be making on the market today ($4500-$5000).
When I started doing airbnb at the beginning of the year, a close friend claimed that the additional income from full-time rental (compared to airbnb) would have allowed me to stay in any airbnb I wanted, any time I visited the city. I was skeptical, but he was right. So now I’m debating whether the cost of staying in my own place is worth it. Particularly since airbnb is an enormous amount of work, relative to full-time rental. I don’t mind doing the work, but I feel pretty dumb doing all that work for less money.
Opinions?

It seems obvious that you should find a long term tenant. Assuming you can get one as soon as it goes on the market and you don’t have any gaps between tenants doing LTR. Keep in mind you need to block off the Airbnb listing so you don’t have people booking it and interfering with getting a new tenant.

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The only reason that I wouldn’t get a long term tenant in these circumstances, is if your second home offers you features or conveniences that couldn’t be found in someone else’s home. How much do you value having a closet of your own stuff, knowing what kitchen utensils you can rely on having, easy parking, and proximity to the services that are important to you. Otherwise, this AirBNB thing is a lot of work. Maybe you should outsource your vacation spot.

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And that’s the crux of the matter. I have known several people who have done STRs who have forgotten to factor in their own time when deciding whether or not it’s worth it. When they work out that they are working for a fraction of the minimum hourly rate, they soon decide to go for long term.

Unless a host has bookings where guests are staying for two or three weeks, being a host can take a lot of time. (And even for those guests if they are needy). Factor in the time it takes preparing the rental, cleaning it (or organising cleaners), arranging for handymen, answering inquiries, writing reviews, house tours, laundry, replenishing consumables, shopping for cleaning materials, ordering replacement goods and much more then it’s easy to be working for only pennies per hour if you’re not careful.

Airbnb (and all those ebooks telling you how you can make a fortune) sell the idea of its services as being something marvellous and profitable. And it is for many people if the circumstances are right. (It’s perfect for me).But the reality is that it’s not right for everyone.

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I assume the 4-5k you mention does not include bills as your tenant would be expected to cover that? In contrast does the 3.5k income take account the cost of heating and services?

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Correct, the airbnb number is net of any expense (such as utilities) that tenants would pay themselves. Neither number includes costs like insurance which would be equivalent in either case.

So the 3.5k is what you’ve earned after deducting gas, electricity and relevant utilities …I thought there was a chance you might not have factored those in.

Seems obvious you should be going for a long term let then …

LTR FTW :wink:

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Yeah, the only reason we Air instead of LTR our MIL apartment is that we’re not zoned as a two family residence, so we’d be breaking local ordinances to have a permanent resident live there. But we can according to the city do STR. Plus due to the size of it and the convenience of it being on our property on a bad month we make almost double what we would LTRing it. But I was telling my friend who is thinking of buying houses and STRing them that especially with houses and everything, LTRing is the way to go. You may bring in more $, but once you factor in all your time and expenses you net about the same. And then he was thinking of doing it with a few houses and all he’d be doing is making his own competition in an already growing and saturated markets.

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Well, you probably already know the answer yourself.

Which do you enjoy more? Which one makes more money and has less effort? The question is which business model really fits your financial needs as well as your lifestyle and personality. Any business has to meet those criteria or you can’t succeed in the long term.