Realistic return on investment

[Pedro1814]

Hi, I am thinking of hosting on Airbnb. I wanted to know if the ROI I hear about are realistic? Can anyone share their experience with me? Thanks!

[Pedro1814]

Hey Mike and Jane0,

Just took a look at his listing and boy is it unique. Wow!!!

[Bhumika]

On a side note @Fred13 about your vacation destinations, THAT IS AMAZING!!!! This resonates so much with my travel wish-list😝.

I have watched 2-3 Icelandic TV Series, what beautiful sceneries to behold😍. I will be looking forward to all the amazing stories and pictures of your trip! 

How are you preparing for this long trip! Curious about the itinerary😛.

[Fred13]

   This time we will be taking a cruise (with Celebrity): London > Southampton > Iceland > Ireland > Norway > England. Three things we want to see in Iceland: the puffins, Northern Lights and stay in an ice hotel.

Wanted to see @Stephanie last Fall in London, but we were there but 2 hours,  maybe this time.

[Lorna170 · Accepted solution]

@Pedro1814  The ROI touted by arbitragers and other STR promoters depends on the property, the location, the size, the competition, the market ... I could go on and on.

Set your sights low.  How much can you make if it is rented for only 10 days a month?  Did you take into account outrageous utility bills (because guests will leave the AC or Heat on full blast with the doors and windows open, all lights on and showers so long you run out of hot water).  How much do you have to pay for housekeeping or your own time cleaning between guests?  Are you available at a moment's notice to unlock the door, replace a beeping fire alarm battery, or answer an inane text that arrives at 2AM?

My advice...for every dollar that you expect to earn, 50 to 75 cents will go to services, taxes, upkeep and maintenance.

[Pedro1814]

Thanks for the info @Lorna170 . I'll have to thread carefully and find an affordable rental unit. I'm planning to do subleasing to get started and will take into account your suggestions. From your experience, do you feel that coaching will be useful for me as a complete beginner or do you believe a book will suffice? Thanks!

[Lorna170]

@Pedro1814  No book is going to teach you about how hard it is to be an AirBnB host.  Before you get into subleasing, be sure that the lease you signed with the property owner allows subleasing.  You also need to get insurance (not AirBnB's AirCover) and follow the short term rental rules in your state.

Good luck.

[Pedro1814]

Hi Lorna,

Thanks for your advice. Really appreciate it.

[Helen3]

Ah you didn't say you wanted to do arbitrage - that's even more risky @Pedro1814 

You will have to pay rent, all bills and taxes even if you don't get the bookings you want and be locked into a longer term rental. 

do you have the funds to cover all these costs if you don't get the bookings you want? 

[Pedro1814]

I have some funds to cover a few month's from time to time. I'm in NYC, do you have any knowledge about the market here?