What To Expect
Have you ever wanted a vacation home, but didn’t think you could afford it? Airbnb, or Short Term Rental investing, has made second home ownership affordable and even profitable for thousands of investors - use 10% down to buy a second home, use it personally for vacations 1-2 times a year, and rent it on Airbnb & VRBO for the rest of the year!
PROS
10% down payment options, higher cash flow than traditional rentals, and the use of the property personally for vacations make Short Term Rentals one of the most enjoyable investments to own.
CONS
Unlike Long Term Rentals, Short Term Rentals are a business, not a source of passive income. Most owners dedicate an hour a week to managing their property, or hire property managers - but beware, Airbnb property management costs about 4 times more than Long Term Rental property management!
ROI
Like HouseHacking, Short Term Rental Investing allows for big gains with a smaller cash down payment. overall returns of 25% - 100% are possible in Year 1. The low down payment and high cashflow also means great Cash-on-Cash Returns (8% - 15%), and the flexibility of the strategy can bring above average rental income (14 Gross Rent Multiplier, “GRM”, or less).
Property Types
Cabins in the woods in areas with 4 season traffic, such as near ski resorts, make great STR destinations, as do homes or guest suites near tourist destinations, transit, or the airport. Condos can also make good STR’s, although be aware that most Condo HOA’s have banned Short Term Rentals, and only a few associations allow you to rent your property for less than 30 day stays.
Check out some AirBnB's that HouseHack Seattle has helped clients aquire and setup here --> https://www.airbnb.com/wishlists/960557766
Market & Competition
Since 2020 & the global pandemic Airbnb & second home demand has skyrocketed. The ability to earn significant returns through Airbnb, the prevalence of remote work opportunities, increasingly fast internet in remote destinations, and limited supply of housing in vacation towns all align to make these homes high competition, and high appreciation assets.
