Seattle weather in winter makes me feel terrible and I travel a lot south during these months and spend a lot of money on it overall I was thinking of turning this need into an investment: - buy real estate somewhere warm - make it short term rental (fully managed) - find property management that would allow me to stay there. Basically I book my airbnb but don’t pay for it, just cleaning maybe. - ideally potential for value appreciation Is such arrangement common/possible? Does it make sense in general? Any tips how to start, any particular areas that’d make sense?
If you’re buying somewhere warm, depending on the location, the times that you’re not there could be more considered off times with less bookings (example: Arizona).
I attempted to do exactly this and it worked for the first year or two but then the neighbors started to cause problems and I had to switch to long term rental. I heard many stories similar to mine. Managing from afar, even with an agency, is tough, because the neighbors hate you that much more - they feel you're ruining their community while not even being there and just earning money on that. I have an apartment but heard similar stories for SFHs too (complaints about party noise or guests blocking driveways etc).
STR are hard and expensive to manage, and costly to do so. It's basically running a hospitality business, not a rental. Insurance is way higher, furnishings need to be replaced and it's expensive, then consumables and services like cleaning. Prop management takes a lot too per booking... The political climate towards these are also ever-changing....and typically against. This can happen fast. People already hate landlords, they really hate STR landlords...and these people are most likely in your neighborhood. Lastly, it'll be a huge pain in the ass on taxes. You get like 14 free days or discounted per the IRS... After that it gets funky. This includes discounted days to friends and family.... But you can extend it so long as you're working on the property. Appreciation is tricky....if you're in a popular area that's propped up by tourism and this STR if the tourist goes away your property value is likely to tank... If STR get too regulated...again property values might tank. Upside for future appreciation is likely limited unless you find an up and coming spot...but post COVID lot of people already beat you to most of these. Again at surface level, this looks like a cheap way to get a vacation home....but once you dig into the costs it's not nearly as cheap.
Great answer thanks
Which state is a good investment for airbnb ? Plenty of city zones in Florida don’t allow short term
That’s what I’m wondering as well as I also looked into Florida initially and it looks tough