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No mortgage payment with your first home

StevieB

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I purchased my first home about 3 1/2 years ago and now am living here by myself in a 4 bedroom 2 1/2 bathroom home with a basement.

I was going to sell it because I don't need all of this space (there used to be my girlfriend here and 2 dogs) and was looking around at smaller homes, when the realtor I was with started talking me into renting my place out instead (he owned a rental mgmt company) to make some money on the side with it. I've never done this before but he got me seriously considering it since I could make around $4-500 off it a month with little effort on my part. However I'd have 2 mortgages at that point so there's a risk of making 2 payments which I was willing to take.

After thinking about it for a while it dawned on me that I have this huge house right next to a very popular lake in the area, what about AirBnB?

I haven't done this yet but just purchased 4 more beds that will be here within a couple of days and am going to put it on AirBnB which could net around 3k/month for this size of a home right next to the lake, which will cover the mortgage x3. Since the basement is unfinished it's worthless to anyone renting it, but I do have a couch down there so I plan on crashing in the basement, putting a lock on the basement door (and added to the rules the basement is the only area that's off limits) and I have shower facilities at a Gym I got to daily anyways.

So this way I won't need to pay 2 mortgages, only the 1 and still make more than I would just renting it out with less risk. I did some research on this area on AirBnB and the demand is pretty high so I know it'll rent, it's just finding that sweet spot of how much I can charge.

Soon i'll be living mortgage payment free basically, plus some extra income off my first home. If it goes well I can always add a bathroom down there which will increase the home value - either that or rent a room somewhere.
 
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StevieB

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As a follow up, I just listed my home yesterday.

I already have 1 booking and 1 interest. If the interest books, I'll already have about $700 worth of bookings. Mortgage is around ~800 total (tax/insurance).

I've had an oven/stove, fridge, and dishwasher installed in the basement and purchased a camping toilet for now. Once I see more traction I'll have a shower and toilet installed.

Since I pay it all the same anyways, every booking is just gravy.

This is mainly a lake home so during the summer in peak time I estimate around 3k income/month and I'll just have to pay around $300-400 for cleaning service.
 

biggeemac

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I am nearing completion of finishing my basement. I built a 4 bedroom apartment into mine. Kitchen cabinets are getting installed next week and then we wrap up. Can't wait to start making some bucks after nearly a year at this project. There are many ways to make money off spare bedrooms.

Congrats.
 

StevieB

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Thanks @biggeemac

So far :

$291
$197
$231
$384
$342
$380

$1825 - So this has payed my mortgage + an extra grand for this month.

This is what I currently have booked and some have already stayed. This is after only having it listed for about 1 1/2 weeks. They also have services that collect data in the local area and adjust pricing for you automatically (though airbnb has it's own that I use, not sure how good it is) but I haven't found one that supports my area.

I also just met someone in the movie industry and there's a place not to far from here that has movie extra's and she said my place is perfect for having them over, so this could turn into a great connection for steady visitors. Over time I'm going to invest into making the place look better so it will demand a higher price tag.

I've been responding to all inquiries very quickly and found someone who can come by for $50 to clean the place after each renter checks-out.

I really had no idea it would do so well this early on however summer is winding down, my place is next to the lake so it will be interesting to see if things continue as well once fall and winter hit.

It was actually a lot of work getting it ready on the top two floors and my basement is still a mess with my stuff that I just threw down here. Now I've got to organize my living space.
 
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HoneyBadger

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I crunched some numbers around me and in my local area it just didn't add up. I used airbnb data for my area I found on https://www.airdna.co/. I realized renting - even assuming 2 months of vacancy a year was 20% more profitable and far less headache (scheduling cleanings, welcoming guests, dealing with local laws) than what the area I was targeting was pulling in on Airbnb.

It did open my eyes purchasing a duplex type situation or a separated bedroom house in a desirable area next. If I lived where I rented out a room or something it could be really easy to swing by and clean/hand over keys.
 

StevieB

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It depends on the area, but for my home I currently get around $120-200/night. Renting it out I would only profit around $400, 1200 total. So for me it makes sense to go the AirBnB route.

Like you said, you could also get a duplex or a quad even, rent out the other units and live in the last one.

If you start this at a young age you'd basically never have a mortgage payment, but better late than never.
 
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HoneyBadger

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That's an awesome opportunity then. The thing that really swayed me was looking at the states in terms of occupancy rates of airbnb properties. There is certainly some units that can stay consistently booked but it surprised me how many average only 1-3 months over the year. I chalked it up to them most likely not having it listed the whole time, bad prices, etc. but it does make you think.
 

StevieB

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There's a lot of people that rent them out only during certain months of the year then live in them the rest if they have more than one home.
 

Nicoknowsbest

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StevieB

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@StevieB

Great start, keep it up!

Have you seen these?

https://www.thefastlaneforum.com/community/threads/stop-paying-rent-live-for-free.51893/

https://www.thefastlaneforum.com/community/threads/live-rent-free-in-multiple-countries.59964/

Might provide you with some alternative angles and additional ideas.

I hit "Watch Thread" too. Keep us posted :)

Thanks! Yes I've read through those as well, great info in them.

Since I posted yesterday I've already increased my bookings by $594 for a total of $2419.
 

StevieB

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I've consistently booked the house and and have earned between 2-3k/month.

The bad news is I just had someone steal 2 of the TV's that were upstairs. Thankfully I found one on craigslist for $25 for a 40" and will replace one of them with that and only use that for a TV. This will remove pretty much everything of high value and I've already installed a camera which I should have done when I first started.
 

MJM CLE

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This will remove pretty much everything of high value and I've already installed a camera which I should have done when I first started.

FYI - check your local laws. Especially if camera is inside and you are renting.
 

Pacman385

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I've consistently booked the house and and have earned between 2-3k/month.

The bad news is I just had someone steal 2 of the TV's that were upstairs. Thankfully I found one on craigslist for $25 for a 40" and will replace one of them with that and only use that for a TV. This will remove pretty much everything of high value and I've already installed a camera which I should have done when I first started.
Wait a minute- a robber or someone from airbnb? If airbnb, I've found their customer service to be extremely helpful. Would definitely get in touch with them.

A couple of months ago I stayed at an airbnb in Montreal and the listing advertised a hair dryer, ironing board and iron. When we got there, none of these things were there. So we went out and bought our own.

At the end of the trip we filed a complaint straight to airbnb. They gave us the full price of the items we bought, even though we kept the items, some extra for the hassle and a $50 voucher for future stays.

In your case, I'd assume they'd do the same. Refund the original cost of the TVs plus some extra for the hassle.
 
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Nomangee

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If you want to increase your profit significantly and get more bookings I would suggest you get asap Everbooked to manage your prices.

They take a cut of 0.75%, but a friend of mine who has several apartments on AirBnB has increased his profit by 24% on average. It's not only that the software updates your prices everyday and therefor brings you more profit, but SEO wise, to have an up to date calendar gives you a boost against your competitors.
 
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StevieB

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Yes, I signed up for Everbook but unfortunately they don't support my area.

Airbnb reimbursed me for the loss. They were actually very reasonable and accommodating.

I actually ended up coming out on top as I replaced the TV with a $25 TV off craiglist, a little smaller but it's still LCD and works great which is all short term renters need.

So far this has been fairly profitable. After the mortgage payment & insurance on average it's been about $1700 profit. The basement is getting old though as I can hear everything upstairs. So I am currently looking at duplex housing and will move into one side of the home and rent out the other side. This will mean the renters will be paying the new mortgage payment and I won't have anyone walking around above me. I plan on moving out of the duplex and renting out the other side as well once I'm ready to purchase another property.

Eventually I'll make the floor more soundproof then rent out the basement to. Once that happens I estimate it will come close to my slowlane income stream.
 

StevieB

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For 5 1/2 weeks.

$3084
Time : Approx. 14 hrs (cleaning)

$220/hr

I've looked around to pay someone to clean and likely will at some point, but for now am still doing it myself. I've also been getting some quotes to soundproof the basement ceiling.
 
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StevieB

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Well the "F*ck it let's throw it on AirBnB and see what happens" moment has netted a grand total of $42598 in 13 months.

I just purchased a property in Panama City Beach with a rental history of approx. 45k/yr as well over the past 5 years.

With both combined I will pay them off over the next 15 years so will have assests worth over half a million paid by other people generating over 70k/yr. almost passive income.
 

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