Anyone had Multi-Units while living onsite?

[Scott2084]

My wife and I came upon a Lodge near a beautiful river that has about 8 rental units that are rented out by combination of AirBnb and some other methods. 

Potentially we would be living onsite in a 2,000 sf owners residence. The hope is that since it's largely the AirBnb model with sometimes longer term rentals month to month during the off-season, it would be largely hands off except for the room cleaning etc. 

I posted this idea on Reddit and one person cautioned me that this could become a potential nightmare with guests having nitpick needs etc. My wife and I both work from home full time online.

The response I saw on Reddit was well thought out and well intentioned, it's giving me a little pause on the idea. There isn't really enough income from the rentals to pay for a management company at this point, but the rentals would pay for the mortgage and it would reduce our overall cost of living significantly, allowing more money to go into retirement accounts.  Any thoughts on this? Greatly appreciate anyone's thoughts. 

[Elisa]

Hi @Scott2084 😊, 

Thank you for asking this question here!

Did you already start hosting?

I'm tagging few experienced hosts to see if they can help you: @Shelley159, @Tara0, @Marie8425 and @Debra300. 

Thank you in advance, everyone!

Warm regards 🌻,

[Marie8425]

@Scott2084 

The only Red Flag I truly see is "Hands Off". 

I don't have nit picky guests and I have other businesses I manage.  Airbnb Rentals are like any business some work required.

You can design how much work your willing to do and how much you will hire to do and you manage.  Cleaners and Co Host options.

Then using your expenses and what you determine rental price, is the profit margin where you want?

[Shelley159]

Hi @Scott2084 

I agree with @Marie8425 that one can't aim to actively manage 8 listings yourself, and at the same time hope it'll be "hands off".

The part where you say "except for the room cleaning etc. " is actually a huge job. I assume you won't physically do the cleaning yourself, but at every guest changeover in each of the 8 units there will be three main tasks: cleaning, laundry and re-stocking. If you want to make money, you have to do quick changeovers so you can take in the next guests as soon as possible, so all three of those jobs in all 8 of the units are done under time pressure. Then the real problem comes in: all three of those jobs, in all 8 of the units, all done under pressure ... are like miniature exams at every changeover. Each time, guests get to judge how well the jobs were done, and they publish the results publicly on your listings. Your future occupancy depends on the quality of past reviews, so you end up working harder and trying to do better all the time. You may likely also want to make some changes and do some renovations - both to improve the experience for your guests and to make your own tasks easier. These also take time and focus.

As most of the effort goes into guest changeovers, the obvious way to reduce work is to take longer bookings. This can help, but it isn't necessarily always a perfect fix. The longer a guest stays, the more discount he expects, cutting into profits. If you're on site, guests who stay longer may expect more personal interaction from you. They may also need the unit to be cleaned and laundry to be done during their stay, (meaning you didn't avoid that job after all). Or they may stay long and request that nobody cleans during their stay, potentially building up to a massive clean-up project at the end (and uncertainty about how soon you can be ready for the next guest). What's more is that taking long bookings in the off-season does you no favours in the search rankings on Airbnb. The more (very happy) guests you turn, the better you look to the algorithm.

Here's what I predict: If you decide to invest in the lodge, you'll likely really enjoy the 8 units, spend time trying to do well, and eventually like it so much that you decide to cut back on your full-time job 😀

[Scott2084]

Thank you very much Shelley159 and others for your kind, thoughtful and detailed responses. 

[Frances3408 · Accepted solution]

@Scott2084. I manage both types but generally prefer to see the types of tenants lodged separately The multi unit model worked well here until increasing regulations as commercial premises made it uneconomic.

So are you paying for the management rights or are you buying the entire property? Ask for full financials to check how much it is costing to run and work out what profit is in it after all costs including your own labour.

Try to book to stay as a STR guest and see how the combination of longer and short term guests is working. Is there enough space between the units, privacy and shared areas. How big are the recreational areas to manage and do you need to buy any equipment. What is the weather like in all 4 seasons as well as the STR demand off season? How much is the insurance, given its lakeside?

It only takes one bad longer term tenant to upset the peace and tranquility of everyone else (and vice versa). Plus living onsite you are at their beck and call, so to speak.

One of my TV viewing indulgences when I get time is the Lakefront Bargain Hunt Renovation show. You can learn a lot from other people's journey.

Good luck.

[Scott2084]

Thank you very much Frances. Greatly appreciate the useful information. We stayed onsite for 2 days  in one of the larger units that gets long term rentals (has a kitchen).