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CategoriesLong Term Rentals Real Estate Investing

5 Reasons Why Your Portfolio Isn’t Growing

By brioproperties,

1. You Aren’t Protecting Your Time.
It’s a common thing in real estate investing and business in general to jump as soon as a potential or current customer needs something. It’s our natural instinct. But have you stopped to consider that your reaction to jump is probably preventing you from focusing on the tasks that grow your portfolio. When a prospective calls for a showing our instinct is to ask if they are available at that moment or within the hour. It’s great customer service right? (It actually sets a bad precedence as a rental investor which I talk about in my blog “Setting The Tone For A Tenancy”. #shamelessplug)

What makes the most successful people in the world…successful, is how they protect their time. They set a schedule (which we’ll talk about next) and they have spaces where they can put appointments. They do not deviate from this schedule, especially with appointments. They protect their time. If Bill Gates were a bootstrap real estate investor he wouldn’t look at his schedule as an investor and say “Well I can read about syndication deals later. I’ll go do this showing now.”

When we push something off, we often don’t get back to the task pushed aside for awhile. We’ll quickly get into the pattern of dealing with urgent rather than the important. What’s important doesn’t get done. The successful people we admire protect their schedule, they protect their time, and this provides them with maximum productivity.

2. You Don’t Have A Set Schedule.
It doesn’t matter what size portfolio you have or if you have a day job, you should have a schedule (at the very least) for Real Estate. I argue it’s infinitely more important if you do have a 9 to 5.

Your schedule should look like a template. You should have set hours and days where certain categories of things happen. I.e. Bookkeeping 3-5pm on Monday; appointments 12-3 Mondays, and 4-6 Thursdays. So on and so forth. If you do your own maintenance include times on certain days that you will do repairs at your units. Everything you have to do should have a block of time assigned to it every week. This includes ‘growth activities’.

The key is to only schedule appointments during the specific time period and stick to the category your suppose to be working on per the schedule. The blocks of time should be viewed as mandatory. If the time block arrives and you have no activities associated with it (i.e. repairs or showings) you can then decide what to do with the time block. I suggest using it for items that will make an impact on the future growth of your portfolio and not using it for the ‘urgent’ or routine.

3. Finding And Evaluating Deals Isn’t On Your Schedule.
You should be blocking 1-3 hours per week to find and analyze deals. This may seem silly because the best deals are off market and found at networking events. But if you make it a habit to look for and analyze deals during the week, you’ll be current on the market, evaluations will seem routine and it will be easier for you to do it quickly when a deal is in front of your face.

4. No One Knows You’re Looking To Buy.
One of the biggest ways to self sabotage expansion is to not tell people that you were looking to buy. Telling other investors that you’re looking to make a purchase is the most effective way to find out what’s available. When an investor asks you ‘what you’re up to’ or ‘how it’s going’ your first instinct should be to tell them what you’re looking for. If no one knows you’re looking, how are they going to know to tell you when they find something? Don’t assume everyone knows your looking to buy just because they know you invest.

5. You Aren’t Networking Enough.
In the digital age networking is more than just going to in person events. In-person events are where you will get the best connections but they aren’t the only piece of the puzzle. By being part of digital networking groups on Facebook, Bigger Pockets or others opens yourself up to the possibility of getting deals or working with people who do not live in your state. Chances are you won’t meet them at a local meeting. If you aren’t where they are, they won’t be able to find you, and you won’t be able to do business with them.

Stop sabotaging your own expansion. Implement these tips, stick to them and you will see how expanding your portfolio is quicker than you think it is.

Corina Eufinger

Owner of Brio Properties

CategoriesReal Estate Investing

Mixing It Up

By brioproperties,

I’m the type of person who likes variety in life. I like spicing up my life by traveling different places, trying new restaurants, and giving some things the good ole college try as hobbies. But one thing I haven’t done is mix up my investing strategy…yet.

All my life I’ve been around buy and hold rentals.  What my family did and my jobs in real estate have all been about long term rentals. It’s what all my transactions have been so far.  I know there are other investment strategies out there…I’ve just shied away from them.

Mostly it was because of what I’ve read from Robert Kiyosaki and others who advise mastering one form of investment before moving on to another.  If you start out in long term rentals, stay with those until you feel you’ve gained a substantial amount of knowledge. I believe Robert’s barometer of preparedness was “Do you know enough about a segment of investing, that you feel confident having your mother wage her entire retirement on a deal you’ve evaluated and prepared?”  Once you’ve can say yes to that, you can try out another strategy.

My need for new experiences and temporary exhaustion of long term rentals is leading me down a different path this summer and I have two choices.  I can become a long-distance investor of vacation rentals or stay local and do a flip with a trusted acquaintance.

Vacation rentals are something I hear people make amazing money from. A friend of mine made $7,000 by renting out her home over the course of 2 years.  Not bad for part-time (she and her family obviously had to live there most of the year). I have an investor buddy in Florida who right now nets over $50K on 2 properties. But when it boils down to it by dabbling in vacation rentals…I feel that all I’m doing is giving my zebra fuschia stripes instead of black ones.  It’s still a zebra. I’m buying a property to hold on to. I’m renting it out to other people to use. I’m responsible for the maintenance. It’s still a zebra.

Flipping is different.  Flipping is a race. You’re acquiring a property, fixing it up as soon as you can, and selling it as fast as you can.  You aren’t renting something out. You aren’t holding on to the property long term. You get in, work, and get out. Once the property sells you’ve cut cords.

Flipping is expensive.  If I didn’t have connections with an active flipper with their own private money sources this wouldn’t be an option right now.  Most flipping requires private money (or a large stack of your own cash) because properties might not be lender worthy OR they require substantial remodeling.  

Flipping is time consuming.  Even if you hire out to contractors. Its picking out supplies, lining up contractors,  checking on those contractors, paying the contractors, being excruciatingly efficient with your “go time” as my friend calls it (the time between when you purchase and aim to get it on the market).  All while watching the home sales market to detect a change that might affect your on the market deadline.

Flipping pays.  A flip done properly (with experience or experienced partners) can net $20,000-$50,000. Down side to it? It’s not passive income like buy and hold. You are taxed at your normal rate.  

If I didn’t have experienced friends, if they didn’t have their own private money network I wouldn’t be entertaining this necessarily.  I wouldn’t go at it alone even if I had the financial capability myself. Why? Because I feel that buy and hold is so different from flipping that I want someone who will be sure I’m making decisions based on being a flipper than a buy and hold mentality creeping in.  

By no means do I believe this is a permanent shift.  It’s satisfying a curiosity. It’s providing me variety.  I will still be learning about rentals. Society is always changing, you are never really done learning about any given topic.  Ultimately I understand that true wealth comes from buy and hold. I will continue to acquire new rentals. I’m just spicing it up.  

Rather than painting my zebra’s stripes pink, I’m going to go befriend a cheetah.  

CategoriesReal Estate Investing

Who’s Says There’s No Creativity In Real Estate?

By brioproperties,

Over the past few years I’ve begun to appreciate a side of real estate investing that doesn’t get a lot of play, and that I honestly didn’t anticipate.  As investors we love talking about earning income while we sleep, or retirement plan, or freedom of time from a 9-5. Normally this is what we use as the great things about real estate.  Yet the part I’ve most began to love is: the creativity. If anyone has ever said there isn’t any creativity in real estate, they are dead wrong.

Now I’m not talking about creative financing or the like.  What I love about real estate is the imagination it fuels in me.  Trips to Menards, Home Depot, are fun. I love browsing the light fixtures, bath vanities, and countertops.  When I pass the paint section I often zone out for a few moments dreaming of repainting the exterior of my buildings.  I don’t want to give you the impression I’m a ‘rehab addict’ per say. I don’t let my imagination run away with my cash flow in hand.  

I even like contemplating the more irrational or aggressive imaginative ideas.  The thought of converting an upper/lower unit into a SFR with 3 bdrms, mother-in-law kitchen and large rec room. Or restoring a Victorian buildings common areas to truly Victorian with original floors, woodwork that is stained and not painted, etc.  Many of these won’t come to fruition but it keeps me passionate about real estate investing.

When I’m walking around a city or passenger in a car I look at vacant or blighted buildings.  I take a few moments to let my imagination run wild with how I would “save” the building, how I would restore it.  I begin to imagine what’s it’s best use would be. A small building located along a river downtown would make a nice pub or coffeehouse.  An old firehouse used as a restaurant. A historic church turned into a banquet hall.

This creativity often ends up leading to useful ideas.  From these moments of imagination I’ve made plans for landscaping a backyard, adding “metal” backsplashes to my kitchens for less grease damage and easier cleaning, and pulling up old vinyl out of sheer curiosity to find an original  geometric mosaic tile pattern from the 20s in good condition.

Whoever said there’s no creativity in real estate never took the time to appreciate it.

CategoriesReal Estate Investing

Real Estate Networking In A Tech Driver World

By brioproperties,

Even as soon as just a decade ago, networking was something that was only done in person.  You had to find chamber events, groups, community functions in hopes of finding people who are not only like minded but also eager to connect. Trade organizations (like WAA or REIAs) were the best chance to meet people who were in the same field as you.  The internet began to erode away at that norms of networking and in the last 4 years technology has shattered the long-held belief of networking only happens in person.

The cornerstone of these web based groups are the discussion forums. A place for idea exchange and advice seeking among members that knows no geographic bounds.  A query posted may have investors from California, NYC, or Australia offering comments or suggestions. This networking allows real estate investors to gather knowledge from across the world, connect with people in different parts of the world, and possibly become partners on deals.

.Com Groups

A web based real estate networking group uses the website as the primary focus or method of communication between members. These membership bases tend be nationwide.  This means education and opinions are not based on your local housing laws. But they are still amazing resources and ways to connect with people in various stages of real estate investing. Some examples of these are “Biggerpockets.com” and “realestateinvesting.com”.

Facebook

Facebook is one of the easiest ways to network with other investors.  There are groups within Facebook dedicated to connecting landlords or other real estate professionals. A simple search on Facebook for “landlord” will yield about 6-8 groups dedicated to rental investing.  Some are large groups (5k member) others are small (less than 500). Some are geographically focused on a certain area of the world, others are national or internationally based. The best groups are closed groups that require approved membership to join.  Membership is free but they ask you to answer a few questions to be sure you are truly an investor and not someone just looking to spam the community. Facebook groups are discussion based groups. Meaning their purpose is discussion started by other members posing questions, telling stories, etc.  Moderators aren’t necessarily posting original content or posing group questions, though some do. For the most part moderators are only there to make sure the community isn’t being spammed or being abused.

Instagram

Instagram is quickly becoming a platform that is more than just for posting neat photos.  Through use of hashtags, stories, and live video Instagram is becoming a unique platform for networking for all fields.  Instagram is unique because it allows you to see more than just words. It’s not a platform for seeking advice necessarily.  It’s a platform for you to exhibit your knowledge and skills in the industry. Real estate investors post pictures of their current projects, deals, and day in the life.  They use Instagram to brand themselves as investors. It’s a marketing tool. It networks them with people who have the same interests (through hashtagging). It’s a source for creativity by browsing other investors content. It’s a resume in video and picture form which can be used when talking to prospective private money investors, loan officers, and other investors.

Even with all these amazing networking abilities at your fingertips, it still is the in-person connections that will likely yield the quickest results. There is something about that in-person connection starts building loyalty and trust almost instantaneously.  Combining in-person networking with technology sources can really accelerate your investment business. Always be sure you are part of one organization that gives you a local pulse on laws and trends.

Remember: Your results are directly related to your level of participation. Little participation yields low results.

 

CategoriesReal Estate Investing

CPAs and Your Taxes

By brioproperties,

It’s tax time. If you are ambitious, you may already have them done. I am not part of that category when it comes to taxes.  My poor accountant usually receives my reports middle of March.  Which might not be a problem if it didn’t involve 3 businesses.  Even if you have finished your taxes this year already, continue to read because this article isn’t strictly about getting your taxes down this year.  

When I started my first business, I went through a checklist to get my professional support team in place.  I found an attorney (well two one business law the other real estate and rental), I found a CPA, and I found an insurance guy.  It wasn’t until after I had my first taxes done that I learned that all CPAs are not built the same.  

Big Box Tax Preparation

It’s no secret that places H&R Block and Hewitt-Jackson are not the same as the Certified Public Accountant that may operate a practice off your local street corner.  If you need a description of why they are different think of it this way: H&R Block operates a business, a CPA operates a practice.  A CPA practices accounting much like you say your doctor practices medicine.  H&R Block is business with a procedure used for every transaction (much like McDonald’s drive thru). While I believe H&R Block and others may do okay for the Jones Family who don’t own businesses or investments, if you own either of those you are being under serviced by those companies.

Do You Dare Do Your Own?

The same goes for doing your own taxes if you own investments or a business.  Tax preparation is a specialized field.  If you don’t have the proper knowledge to complete your own taxes (and your online service doesn’t go in depth) then you are doing yourself a disservice.  I truly believe preparing your own taxes is much like doing car repair.  You wouldn’t rebuild your transmission without preparing yourself with a very complete understanding of vehicle operation and the process to rebuilding the transmission.  Tax preparation is the same way when you own things other than your primary residence.  You should have read a few books, watched a few tutorials on how the tax code works prior to preparing your own. Your research should include learning how to prepare them when business income or investment income is involved.  

CPAs v. Tax Advisors

Now all CPAs are not built the same.  The vast majority of CPAs are specialists in accounting and the procedures of filing taxes.  An accountant can help your depreciate your asset, decide between accrual and cash accounting, and like concepts.  But most accountants are not tax advisors.  A tax advisor is one who helps you build a plan for your investments and businesses that presents the lowest possible tax liability based on your projected performance for the year.  When you have a major change, they help you structure and organize said change so that it will have the smallest negative affect (or biggest possible positive influence) on your tax liability.  Tax advisors are passionate about knowing the tax code in its most updated form.  

It is possible for CPAs to be tax advisors but not all tax advisors are CPAs.  Tax advisors do have accreditations available to them. The Accreditation Council of Accountancy and Taxation bestows tax advisors with the accreditation of ATA (Accredited Tax Advisor).  This is why every once in awhile you may stumble upon an accountant that lists his or herself as  “Ellis Bell; CPA, ATA”.  If you prefer to have your accountant and tax advisor in one, that is the alphabet soup you look for after their name.

You may be wondering if they even should be the same person.  It depends on the size of your ventures.  If you own 300 rental units and have 7 LLCs you may want to consider having an accountant and a separate tax advisor.  Only because keeping your accounting in line will likely be enough of a load one person.  And truth be told at the point your tax strategy will be enough work for one consultant.  However until you get to an enterprise level, you can certainly use one accredited person for both purposes.

 

CategoriesReal Estate Investing

Do Credit Cards and Real Estate Mix?

By brioproperties,

 

It is a very heated topic among experienced real estate investors.  Using credit cards in real estate.  Some investors swear by it saying it is one the best forms of leverage they have.  Others would rather pass on a good deal than enter the realm of credit cards in real estate.  Factually, there are many ways credit cards can be utilized in real estate (all depending on your credit limit).  What you use them for is up to your level comfort in your ability and the investment.  

Rewards and Advantages

Credit cards can be lumped into two categories: store cards and bank cards. Store cards are cards that are store specific that can only be used at a particular retailer.  Think Menards Big card or Lowe’s Advantage.  The second major type of credit card are your bank cards.  These are issued with a Visa, MasterCard, Discover, or American Express mark. These are the cards that can be used most anywhere. These offer the most versatility.  

So what can someone do with a credit card in real estate? The obvious use is making purchases and delaying the payment for it.  We’ve probably all done that at some point or another. The handy thing about this is most any credit now days has cash back rewards or point system.  So as you purchase your repair items you are earning cash back or gift card rewards.  I use my Capital One rewards to get restaurant gift cards and treat myself. You can also opt to directly credit your cashback to your bill.  

The advantage of a store card is that most allow you to pick cashback or 6 month interest free financing for large purchases. They also may run specials that are exclusive to current card holders (i.e. 2% APR on flooring purchases for 3 months). The Menards Big Card gives you a percentage back from every purchase in a quarterly rebate and you can earn additional 1-3% by making brand loyal purchases.

Cash Advances As A Form of Payment

There are investors who use credit card cash advances to fund cash property purchases on fixer uppers. Usually this is done when they have their eye on a deal and are in holding to be cashed out of another deal.  This is an advanced form of real estate investing for sure.  You definitely need to know when you will be liquid and have a back up plan if you don’t get the cash as expected.

You can also use the cash advance with craigslist purchases.  My girlfriend who is also an investor saw an ad for appliances from an apartment complex that was getting updated with all stainless steel.  They were offering 5-7 year old fridges and stoves for under $150 a piece. My friend got a cash advance for $2500 and we hauled 6 fridges and 5 stoves to her storage unit (in one very long day). Best part was that  everything was plugged in and verified to be working when we picked them up. She paid back the cash advance with only one billing cycle of interest and fees using the move-in she had coming 3 weeks later. If she hadn’t been able to take a cash advance she likely would have missed out on the deal because Craiglist deals are cash only.  After paying back the credit card she still had saved 55% on retail.  

After all this, do credit cards have usefulness in real estate? Yes, with moderation and correct usage. Under no circumstance do I recommend the cash advance for property purchase idea. It is very risky if something happens and you can’t pay the full amount back quickly. The interest rate becomes a killer quickly and you could be left overstretched.  If you can stick within a budget, there is no reason why you shouldn’t use credit cards and get the cash back rewards.  The key is to stick within the budget and be sure to pay it off in full every month.  As for my friend’s Craigslist purchases…that was just pure genius.

CategoriesLong Term Rentals Real Estate Investing

Real Estate Books To Grow Your Portfolio

By brioproperties,
As originally seen on waaonline.org

One of the first Facebook live events I did was a compilation of the best books I’ve read for real estate investors and entrepreneurs. At LED earlier in the month I was asked to do a series of blog posts on the books I’ve read and talked about either on FB Lives or in blogs.  I decided to break the series down over a couple of months because I don’t want it to detract from writing other timely blogs or more pertinent topics.  What better way to dive into this topic of educational reading than to start with books written on specifically on  real estate? These books are in no particular order and is by no means an exhaustive list of the awesome books I have read.

Millionaire Real Estate Investor by Gary Keller

You have probably heard me refer to Gary Keller a couple of times if you have been following my online content. He’s written a number of books for investors and entrepreneurs.  Two of his books have been game changers for my life.  His Millionaire Real Estate Investor book is one of those.

Millionaire Real Estate Investors is NOT a book written by a man spewing his philosophy on what has worked for him.  It’s a brain trust book.  Keller got highly successful real estate investors together (net worth of $1,000,000 or more) and broke them down into two groups.  What ensued was a forum of ideas, war stories, success stories and nuggets of knowledge which were transcribed into a real estate book that could easily be deemed a “bible” for real estate investors.  Its topics are expansive, including:  acquisition models, property criteria, vendor issues, investing myths, mentality and more.  As a warning though, Millionaire Real Estate Investor is not a light read.  You don’t curl up with a cup of tea and read it to relax.  You actively read it, more so than most any other real estate book out there  It’s best read in a style similar to your school days where you are focused, writing notes, and maybe even re-reading paragraphs to be sure you took it all in.  It’s a must read for anyone that wants go further than in their real estate career.

ABC’s of Real Estate Investing by Ken McElroy  

Straight out of the Rich Dad Authors series comes McElroy’s book on real estate investing.  The series offers a wide variety of books on most any topic involved in real estate. I would recommend you google the series and add a few to your reading list.

ABC’s of Real Estate Investing would more easily be classified as light reading compared Keller’s book.  McElroy’s writing style is a less dense style. McElory gives a detailed overview in simpler language of how to evaluate investment properties (one of the best overviews I’ve seen).  McElroy does focus on multi family properties so if you plan on investing in single family homes as rentals,  you may not get as much out of the book. While other business books may have more thorough discussions on negotiation tactics,  McElroy gives an overview of how real estate investors should handle price negotiations based on their evaluations.  It’s topics aren’t advanced but that doesn’t mean it isn’t worth the read if you are experienced.  (In that case you can consider this booker a primer for his “Advanced Guide to Real Estate Investing”. Which I didn’t put on this list because I didn’t want this to become The Rich Dad Authors blog.)

Landlording on Auto Pilot by Mike Butler

Out of all of the books on the list, this is probably the easiest read.  Butler writes about how he created a system to his managing his rentals while keeping his more than full time job as a police detective.  The reason I like this book is because it’s a reminder of how integral to success it is to have a good system in place.  As Robert Kiyosaki likes to say, very few people truly go to McDonalds for the food.  They go to McDonalds for the system that produces inexpensive, consistent, and predictable prices for food on the go.

Butler’s book details his own experience and what worked for him.  I encourage you to read this book as a jumping off point for creating your own automation to your landlording because his book goes into detail about aspects of our industry that are regulated by state and municipalities (i.e. eviction, law compliance, screening).  His book is full of hundreds of ways to create a well-oiled machine for managing your small or moderate rental portfolio if you prefer to be a hands on landlord.  The book was originally published in 2006 and unfortunately Butler hasn’t updated it for the Kindle version released this year.  This means that some of the information is a little out of date (i.e. pager system, marketing that doesn’t feature social media or a high concentration on web based sources). I wouldn’t say its information is ground-breaking but its a good read to motivate you to systemize your landlording as much as you can.  

The Book On Investing In Real Estate With Low Or No Money Down

by Brandon Turner

This book certainly gets the award for longest title in the list.  Turner is a seasoned real estate rehaber and buy and hold owner at the young age of low 30s.  His motivation and enthusiasm make him an addicting person to follow in real estate investing.  

His book is written based on the strategies he used to get involved in real estate with very little money in his bank account as a young adult.  Turner outlines all the strategies he has used to acquire properties without having to save up for a 20% down payment.  His strategies include: Buy Rehab Rent Refinance (his go to and today tried and true platform), live-in flip for buy and hold, master lease, owner financing, and partnership (one person brings the money the other brings the sweat equity per say).  Turner’s books are always easy to read and usually an enjoyable narrative.  If you like narratives tied into your real estate books, Turner’s books will be ones you enjoy.  His enthusiasm and dedication even jump off the book pages at you.  

You can pick up all these books on Amazon in Kindle or paper format.  

Corina Eufinger

Owner Brio Properties

Wisconsin Apartment Association Director of Records

CategoriesLong Term Rentals Real Estate Investing

Do Airbnb and Rentals Mix?

By brioproperties,

Written By: Corina Eufinger

Last week I attended a networking event for real estate investors in Northern Illinois and in the breakout session an investor was musing about her 1 bedroom being vacant over the holiday season unless she gets someone in there in the next month. Someone, intending well no doubt, said “I saw a video on Youtube where an investor rented out their vacant apartment on Airbnb for the holiday season and made a thousand dollars in one week.”  Danger Will Robinson, Danger.  I saw the stressed investor’s face light up at the suggestion of it so I immediately chimed in hoping to bring her back to reality and out of her Scrooge McDuck coin pool fantasy she was already imagining. I know it’s tempting when you are looking at having a vacancy through the holiday season to offer it up as a hotel like stay.  But there are many things to consider. It’s not as easy as you might first think.  It has its fair share of headaches and complications.

  1. Airbnb is still in a grey area and some places it’s illegal.

It’s been well documented that Airbnb’s in some locations are a legal grey area.  You aren’t a registered hospitality venue and (a point I will reiterate next) you are not a landlord.  In those geographic locations you are riding the rails between legal and illegal which makes knowing what is legally expected of you and what your rights are difficult.  Some municipalities have passed ordinances banning Airbnb’s all together. So it is important to find out your municipality’s ordinances. Hosts that obfuscated the law (whether they knew it existed or not) have been dragged to court and ended up paying triple or quadruple in fines than what they earned in one week of Airbnb.

 

  • As an Airbnb you are not a landlord!

 

One thing is for sure in Wisconsin is that for the particular unit you use as Airbnb, you are no longer a landlord.  Which means all the laws, regulations and codes you know (or hopefully know) like the back of your hand don’t apply.  In reality, you don’t know jack because your breadth of knowledge isn’t applicable.

 

  • Your existing tenants may hate you

 

[If you are considering renting your single family rental as an Airbnb replace tenants with “neighbors”.] Consider your existing tenant’s feelings when thinking about doing an Airbnb. How will your fixed tenants be affected (I mean really affected) by Airbnb guests? Holidays are stressful for everyone, including your renters.  Introducing an unknown like an Airbnb guests may make their holiday season even more stressful. That stress doesn’t tend be quickly forgotten January 1.  It may stick in their throats and sway the decision of renewal.

 

  • Most Airbnb’s come furnished

 

This is perhaps the biggest item to overcome logistically.  Most every Airbnb is furnished completely.  Most of don’t have a storage unit with a full spare of house furniture waiting to be used. Beds, dressers, kitchen table and chairs, couches, tvs, etc.  So that would certainly be a start-up cost.  Don’t think you could go to goodwill and pick up any old items and creating an eclectic look.  Airbnb’s rent on aesthetics like any other hotel guest so having a painted white dresser, maple tone nightstand and yellow lamp will work for selling your Airbnb.

 

  • Hotel guests tend not to care about utility usage…..in a worse way

 

Ever gotten to a hotel after a long road trip and just wanted to take a nice long shower?  I mean….l…o…n…g. That’s exactly what some Airbnber’s like to do.  They also like to unwind watching cable or streaming so you will have to do provide one or the other.  They also tend to use lights more.  If they are anything like me in a hotel, I always leave at least one on when even when I leave. Then there those who simply don’t care because they aren’t paying for it.  Long hot shower every day!  All these activities may create a higher utility bill than you are used to so be sure to budget accordingly.  

 

  • Increased traffic on the property

 

Think about the last time you stayed at a hotel? Chances are you came and went from the hotel without really thinking about it, and usually more than you come in and out of your own home.  Also consider your Airbnb guests may be more likely to entertain others (perhaps the locals they are visiting) since their lodgings have more of a homey feeling and they can cook in their lodgings.  Lastly, if you are a successful Airbnb host, you will likely having a revolving door of new guests every  4-7 days.  

 

  • What about insurance?

 

While this is last on my list, it should be one of the first things you think about.  How does your choice to Airbnb affect your insurance? Are you going to inform your insurance? If you don’t inform you insurance and something happens, what if the insurance cancels your policy because of unsanctioned activity? Can you get an insurance supplement that would cover you in case of an Airbnb catastrophe?

 

That might seem like a long list of negatives, but it’s merely a list of complications. During the U.S. Open at Erin Hills, property owners were raking in large cash for renting out their homes and rentals to golf patrons for a week or so.  Rates were anywhere between $1,000 and $4,000 for a week of moderate lodging. Which is a decent chunk of change, especially if you get great guests.

If you are considering doing this for the holiday period, definetly be sure there is a market for it.  It’s best achieved in a slightly populated area or destination area (like Baraboo, Sheboygan, etc). You can get an idea of how much you should charge by calling around to area hotels (think more Holiday Inn, Hampton Inn than Motel 6) and see what they are charging. Use that as a jumping block for your rates.  While a hotel may offer a pool, breakfast, etc you are offering a home setting with the ability to cook their own meals. So you aren’t necessarily offering less amenities.    

Final thought, if you do choose to convert a vacant to an Airbnb for the holiday season consider if the market is there for an extended stay year round?  Would local companies like having a place for their visiting contractors, executives and others to stay that isn’t a hotel environment? The best way to find this out is to start calling local large companies.

If you are wondering where I stand on the issue I don’t see myself becoming an Airbnb host.  I’m much more likely to create a duplex with extended stay than a permanent Airbnb mostly because I am familiar with renting out extended stays.

As originally posted on the Wisconsin Apartment Association’s blog.

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