- By the numbers
Cost of apartment: $40,000
Cost of redecorating and furnishings: $10,000
Revenue November 2012 – November 2013: $19,613 Average monthly revenue: $1,634 Rough monthly profit: $1,134 (after cleaning, bills and other expenses) Yearly profit: $13,608
These numbers would be a little higher but I’ve stayed at the apartment myself for a few weeks and also let friends stay for free.
By these rough numbers it should take a little under 4 years to completely pay off the price of the apartment.
-I was recently speaking with a man that has four rental properties that he owns. They are all long-term rental homes. Other than those traditional rentals, he does something I had never heard of; he rents out long term rentals himself, for around $1500, furnishes them and then sublets them for around $2500. He says he pulls in between 3 and $4k a month on the 4 sublets he has based on the cost of utilities -the only consistently changing variable. -Interesting.
Getting a property to rent is something I've been interested in for a long time, maybe because I'm from an area with a high concentration of colleges and universities. A couple of nice 1 bedrooms in decent parts of Boston might be a decent investment. I like the idea of airbnb, which I'd never heard of, but it does seem a bit more hands-on.
Maybe you should just rent a bunch of apartments, furnish them and then sublet them at a return?
Yeah too bad my government sucks: http://www.theglobeandmail.com/life/travel/quebec-cracks-dow...
Asking competing services to all abide by the same rules does not a government make suck. Perhaps the hotels deserve looser guidelines or perhaps Airbnb landlords should have additional requirements imposed. But right now, in many cases, the property hosts are violating the written law (As well as their their contract in the case of leased apartments).
Yeah, it's mostly a tax issue. I stay in a lot of hotels and I'm always amazed at the amount of "hospitality" taxes they levy. Each state in the US has different amounts and taxes too. Of course there are also regulatory issues; sanitation etc. that I as a consumer am not all together opposed to. If you have a business model that is essentially, I can own a hotel room and get a competitive advantage because I have little to no regulations and I don't have to pay the same taxes... well, that's not right.
That's a separate story from the author of the article. The property owners / leasers here are acting analogous to unlicensed hotels. This violates the zoning, heath, and safety laws surrounding hotel industry as well as taxes on renting out property. City governments have no interest in going after the small fry who rents a place out every now and then, but this is clearly property management turned small time business. The slippery slope is when you start seeing investors, realizing the profits, renting out multiple units. This pushes up housing prices in the area (Contributing to gentrification), increases noise and waste, and takes business away from the hotels that actually bother to follow the written law.
I've always had a strong interest in real estate and this sounds like such a good idea. I'm a very broke twenty two year old, I have trouble imagining who would agree to loan me this amount of money. But I'm still incredibly interested. newgreen, how'd you find this?
I think the sub-let idea that I mentioned above might be an interesting one for someone with limited means. You have less risk. But if you don't have the means, don't do it. Save, save, save and make prudent investments along the way. Nothing risky... yet.newgreen, how'd you find this?
I have several friends that email me articles they think I should read and today this was one of them. Not sure where they sourced it.
I'm hopefully entering Americorps in the next few months to pay off the one student loan I have. I used to think that it would be impossible to predict what kind of job I'd have when I was older, and it still kind of is, but in this period of my life I feel like the dreams of me and most of my peers are "narrowed down." I try not to operate under that perspective, because I think success is almost as much force of will as it is blind luck, and acknowledging that your dreams aren't what they used to be is, in a way, giving up. But about money? About making money to pay rent right now this week and then buy beans and rice and then pay for the gas to light my stove? I seem to only be able to find decent paying jobs in restaurants. But I'm tired of working in restaurants, at least in the front of the house (I've yet to bartend though). While working these jobs, I feel myself yearning for the shift to end, for time to speed up, and then when I get off work I move on to drinks and conversation, hearty laughter and cigarettes outside. I can tell that I'm wasting so much time (not to mention money and lung capacity), but I got rent and budding romantic relationships to finance (bus trips to New York and subway sandwiches when I'm there), so I can't exactly quit my job that I'm not exactly fond of. So when I read things like how to buy a property and then renovate it and manage it and make money on your terms, my heart swells a little. I would like a future where I'm more self-determined than I am right now. Thanks for listening, it got a little schmultzy at the end.Save, save, save...
I think there will be a new airbnb. Before airbnb there was vrbo.com (which is still up - just not as popular as airbnb.) I've used both because my mom is a frugal genius and hates hotels. Especially in cities like NYC, you can get a furnished apartment for a great of the price compared to the shoebox hotel. She still rents from AirBNB when my brother is playing in cities outside Durham and the other team moms are always jealous that she has a full kitchen and ability to sleep. There are rarely party animals in the AirBNB places, unlike the crowd you find in a mid-range hotel in a college town.
I'll have to try this out sometime. I've done it in other countries, but I didn't know that this was a thing in the U.S. until I saw this post. I'm aware of couch surfing, which is ok for the short-term, but it's nice to know that there are other levels and other options.
I'm not sure, but I would guess that they would attempt to have a more traditional long-term renting relationship. It might prove difficult in many markets and less profitable but it could keep you afloat. I know that regulators are coming down hard on such sites/practices. @soudns_sound@ didn't you post something about that a long while back?