AirBnB: Is it worth the work?
Hi, this is Michael Dominguez with the Doors to Wealth Real Estate Group.
I have another question: What are the pros and cons of owning a seasonal Airbnb property as an investment?
The pros of AirBnB are pretty easy.
The number one pro of having a short-term rental is it just simply will cashflow better. If you’re renting something out by the month or by the year, it generates a certain amount of rental income. By renting it out by the day or the week, you can simply generate that much more money. The second upside that I’ve heard from people that are doing it is the number of people that you meet that are different from all over the world, and from an interaction standpoint could be a lot of fun.
Those are some of the pros, but there are a lot of cons.
The first one is, don’t fool yourself, you are basically creating a hotel. You are going to be needing to be finding 20, 30 new tenants on an annual basis and you’re going to be needing to clean up the property afterwards, you need to be servicing that property, it’s going to have more wear and tear on it. There’s going to be some repairs as a result of that.
AirBnb means constant tenant searching.
My least favourite thing to do is finding a tenant. I don’t like doing it once every two years on a property, in this case, you’d likely be doing it about 20 times a year. That’s a bit of a challenge there. Again, being a hotel, you need to furnish the property ahead of time, you need to be cleaning the bedding and clean toilets 20, 30 times a year. That’s what you need to be doing. My advice would be to talk with a local meetup and meet people that are actually doing it because the biggest concern is that it sounds glamorous, but it may not actually do so, generate the kind of revenues that you’re hoping that it can be.
One last thing I want to point out, and I realize it’s going long, is that if you have an Airbnb, there is always a concern in short-term rentals that the neighbours could complain, or the community could complain. And then all of a sudden, your plan for a short-term rental gets taken away. A condo, you may not be able to do it in your condo building anymore, you may not be allowed to do it in your community anymore. If that’s the case, then your entire avenue for generating extra revenue is simply gone.
Thank you very much