After several years of running a successful wedding photography business, I began to notice that as much as I enjoy weddings and photography, my real passion is business. That coupled with missing important weekend events with friends and family to photograph weddings had me thinking: how can I continue making the kind of money I need to support my family without missing out on too much of my life in the process?
I needed something that would bring in money without eating up too much of my time. Something where the work required could be done mostly remotely. And hopefully something that would double as some kind of investment.
After an impromptu weekend trip up to the White Mountains left us dreaming about a vacation home there one day, I began to wonder about the possibility of actually buying one now and using Airbnb, VRBO, or a vacation rental company to rent it out. I began researching it obsessively, and to my surprise, it looked like we might be able to not only cover the costs, but also make a profit!
We began searching for properties, and soon after, bought our second home in the mountains! We spent four intense months renovating and redecorating it and began hosting on Airbnb at the end of January.
Since then, I have spent something like an hour per week sending messages to guests and coordinating with our cleaner. It’s low maintenance, and we’re on track to make around $10K in profit this year.
We took out a mortgage and a short-term loan for the renovations and redecoration, so we expect to profit around $18K per year for a while and then around $30K+ per year once those two are paid off. Possibly more, if you account for revenue growth due to a higher occupancy rate in the future (now that we’re more experienced and have reached Superhost status) and rates rising over time while our loan costs remain fixed. Pretty good for just a handful of hours per month working!
The best part? Each month as we pay off our mortgage, we’re putting money into real estate that will gain value on its own most years and can be sold in the future. And because we’re focusing on vacation rentals, we get to use it as our vacation home, too!
Here are some things to consider if you’re looking into buying an investment property:
- Live in an expensive city? If you feel like you’ll never be able to afford property there, consider buying a vacation rental property somewhere less expensive as your first piece of real estate.
- Choose the location wisely. It’s often better to buy a vacation rental property in an area where people enjoy vacationing, where tourism is a considerable part of the local economy, but where it’s too far from a major city to support a large population or lots of very high-end jobs. This creates a nice balance where the property prices are lower, the rental income is easy to find, and you’re positively impacting the local economy rather than creating major problems for locals.
- Spend time finding a team of locals you can trust. Getting to know a few local businesses and the people who run them will give you major peace of mind if something goes wrong and you’re too far away to do handle it in person. Find a good cleaner, plumber, electrician, and handyperson and build relationships with them.
- Pay your cleaner well. A good cleaner is one of the most important parts of successfully owning an Airbnb, especially if you live remotely. A clean place is incredibly important to guests, and high ratings are crucial for lots of bookings. Your cleaner will also be the one letting you know when you need to restock on certain items, giving you a heads up about damages, and so on. They’re the person who will be most familiar with your property, and finding someone who cares and makes your life easier is well worth paying well for!
- Ask your realtor for suggestions. If you’re having trouble finding reputable services on Yelp, Google, etc., try asking your realtor for local recommendations. You can also try joining a local Facebook group or two and asking around in there—that’s how we found our amazing cleaner.
- Treat it like a business. Keep your listing updated, invest in a purposefully decorated interior, get professional photos taken seasonally, set very realistic expectations, and be brutally truthful about your house and the experience guests can expect. (And over-deliver!) Educate yourself on how to succeed with an Airbnb, and always strive for Superhost status—you’ll be amazed at what a difference it makes.
- Consider co-hosting. If you want to buy a property and not deal with any of the logistics, Airbnb offers a co-host service. You just pay local Superhosts 10-20% of your revenue to manage tasks of your choosing.
If your first property goes well, you can even consider investing in multiple properties. Each one will add a little bit more (mostly) passive income to your wallet. And as you pay them off, you’ll get to enjoy more and more passive income in the future—hello, semi-retirement!