Property size

[Tim2742]

Which has better profit potential 2x two bedroom property’s vs one 3/4 bedroom property? 

I currently own 2x two bedroom properties. Both doing really well but I’m weighing up the opportunity to sell both properties and purchase a bigger 3/4 bedroom property. Is bigger the way to go in regards to less overheads than having two smaller properties? Will one “big” property achieve the same earning potential of two smaller properties?

taking into account the large property would most likely be weekly bookings and the smaller properties 2/3 night stays. 

any advice from other hosts who have either would be great! 👍🏼 Thanks. 

[Laura2592]

@Tim2742 in my experience, smaller is better. 

Larger properties invite more big groups. Right now and for the past year, most of the folks traveling in big groups are looking for a place to throw a party. Covid has deeply cut back on family vacations for multi generations. If you are thinking that you will be getting nice families with your larger space, you will likely be unpleasantly surprised to be hosting bachelor/bachelorette groups that need extra clean up. Larger listings require more clean up time and cost, are more expensive to heat and cool, and may be less likely to fully book. 

[Tim2742]

Thanks for the reply @Laura2592 really appreciate it. I thought an 80% occupancy rate with weekly bookings for a large house may be hard to achieve. 

shorter night stays do require a lot more work with the smaller properties but for me it’s definitely worthwhile when you look at end of year earnings. 

[Laura2592]

@Tim2742 no doubt 2 properties of any size are more work than one, and short stays are more work than longer. But there is always the option to rent one long term as a traditional landlord rather than through ABB.

I definitely favor small properties with lower capacity numbers and shorter stays on this platform. If a guest isn't a fit, they are gone in a few days. Clean up is typically manageable. And because we visit our space after each stay, we have a very good idea of its condition. I had tried to talk my husband into a second small property in the area at one point, but we just would be pulled too thin with other business ventures we have going on. 

[Brian2036]

@Tim2742 

I definitely agree with @Laura2592.

Your two smaller properties would probably return nearly twice the income of one larger one in our market, although it might be different where you are.

Our listing actually has 4 bedrooms, 3 bathrooms but we blocked off 2 and rent it as only 2/2. 

The income has been about the same with fewer problems.

We are planning on remodeling a smaller cabin, 1/1 and expect to rent it for about 80% of the larger one.

[Tim2742]

Thanks for the the input @Brian2036 appreciate it.

My area is definitely more suited for shorter stays for couples and small families. However bigger properties can do well but I’m not sure on occupancy rates for weekly bookings in the winter months with the bigger properties.

[Mike-And-Jane0]

@Tim2742 We have a 1 bed, a 2 bed and a 3 bed apartment all in the same building. Per bedroom the 1 bed is most profitable followed by the 2 and then 3 bed. I would definitely stick with smaller properties and would split the 3 bed into 2 if we could!

[Brian2036]

@Tim2742 @Mike-And-Jane0 

In our experience, twice as many guests often equals four times the mess, particularly when children are involved.