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I Bought An Apartment To Rent Out On Airbnb

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Re: I Bought An Apartment To Rent Out On Airbnb

#11

Post by noname123 »

Hi j0ncc,

Thanks for sharing. I was wondering if you could shed light on your inventory risk, meaning do you find that the market price for your rental and nights reserved is highly dependent on the economy, tourist season and weather conditions or fairly resistant to external circumstances. Furthermore, is your product fairly fungible meaning if you have had to deal with competitive pricing in your locale and/or have had repeat customers.

Also, I'm guessing given the relative low price of your rental income and your buying in cash; real estate fluctuation risk is relatively low. Does your purchase qualify as a first time home-owner tax credit?

For comparison, a $50K investment with 8% market annual return will compound to $68K in 4 years or $92.5K in 8 years. Using cash-flow discount model, assuming that your real estate property value stays the same and annual income the same, you spend $50K to yield $90K ($40K in illiquid property value and $50K in generated cash) in 8 years, making your net present value of your $50K investment to be discounted at $21.8K. Just food for thought.

Re: I Bought An Apartment To Rent Out On Airbnb

#12

Post by adaml_623 »

petercooper wrote: post #4

It’s possible to find a nice apartment in a major city for less than $50,000. The place I found was in Las Vegas and it cost $40,000. Wow, I had no idea things were that good/bad. Here in the UK, I deliberately choose to live in a cheap part of the country and you'd still be talking $120k or so for an equivalent 1 bed flat. This really illustrates to me why efforts to turn various areas in the US into "mini Silicon V…

I think you exaggerate. zoopla and some research gives me (all city centre addresses):

Manchester - £55K+

Leeds - £70K+

Birmingham - £45K+

Hull - 50K

Bristol - 100K

Norwich - 70K

etc.

If you're happy with a small village then I think you can find even cheaper.

Re: I Bought An Apartment To Rent Out On Airbnb

#13

Post by rll »

If enough people do this it will be the end of Airbnb. This is one of the patterns the state of NY is using against Airbnb while Airbnb is arguing that the service is intended for people occasionally renting out their primary residence. If the state is able to prove a significant number of people used this model Airbnb is done in NY and I fear other states will follow.

Re: I Bought An Apartment To Rent Out On Airbnb

#14

Post by atwebb »

Good, concise write up with real numbers which is nice. But the woman who is doing all that cleaning and contact work for $200/month is the one making this possible (so it seems) and that could quickly eat up profits (though the ROI is great enough that there's lots of room there).

EDIT: Also, is there currently an AirBnb manager market? Similar to the cleaner/manager he has, it would be great for people to invest remotely. Do research, fly in to inspect potential properties, purchase and give the cleaner/manager a nice cut? I know there are property management companies but there seems to be some extra finesse (and possible discretion) needed here that I haven't seen from PM companies before.

Re: I Bought An Apartment To Rent Out On Airbnb

#17

Post by objclxt »

adaml_623 wrote: post #12
petercooper wrote: post #4

It’s possible to find a nice apartment in a major city for less than $50,000. The place I found was in Las Vegas and it cost $40,000. Wow, I had no idea things were that good/bad. Here in the UK, I deliberately choose to live in a cheap part of the country and you'd still be talking $120k or so for an equivalent 1 bed flat. This really illustrates to me why efforts to turn various areas in the US into "mini Silicon V…

I think you exaggerate. zoopla and some research gives me (all city centre addresses): Manchester - £55K+ Leeds - £70K+ Birmingham - £45K+ Hull - 50K Bristol - 100K Norwich - 70K etc. If you're happy with a small village then I think you can find even cheaper.

Yes, I think the OP is rather mis-informed. There are plenty of places in the UK where you can get a one bed apartment for between £50-70k and not get a 'brick through the window'.

Are these places you're likely to be able to rent out to full capacity on AirBNB? That's a different question.

Re: I Bought An Apartment To Rent Out On Airbnb

#19

Post by smallegan »

toomuchtodo wrote: post #9
mmagin wrote: post #5

Does Lockitron work for someone who happens to not have mobile phone service where the rental is? As convenient as it is, it seems like short-duration travelers to a country don't always bother with having a working mobile phone where they're going. If so, I'd hope it's obvious in the listing.

You need a working mobile phone with service, but it doesn't need to be a smartphone. https://lockitron.com/help/mobile#smsaccess EDIT: Included more detail about needing a working mobile phone with service, due to ahlatimer.

His question was does it work without having service. In other words offline mode. I think the answer is that no it does not.
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