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I Bought An Apartment To Rent Out On Airbnb

583 points by j0ncc 13y ago

jeffandersen 13y ago
Was there anything specific when applying for insurance? Did you need to disclose it was being rented out or anything (I'm assuming if you had to this would affect premiums)?
- crbnw00ts 13y ago
  You must be kidding! This is "disruption" we're talking about, after all. That means all precautions, regulations, contingencies, licensing, and everything else are out the window, full stop. What are you, some kind of last-century luddite who hates progress? What do you want, for the bad old pre-startup ways to contaminate things and spoil the party? "Insurance" is for non-entrepreneurial losers, and no one cases about them, because they're not really people anyway! Just do a textual search for "insurance" in the article. Zero results found. Yep, it's "disruption" all right! Full speed ahead!
  - woofyman 13y ago
    The only way to buy insurance would be to lie and commit fraud. Home owners associations also require insurance.
    - onebaddude 13y ago
      >The only way to buy insurance would be to lie and commit fraud. I'm sure that's what's happening, probably unintentionally. And you're okay, until a crime is committed, someone is hurt, damages are done or the place burns down. Then the insurance company says, "Oh, you were renting it out? Good luck!"
    - HeyLaughingBoy 13y ago
      Why would he need to lie? Landlord insurance is trivial to get and IIRC (it's been a few years) cheaper than regular homeowner's insurance.
      - woofyman 13y ago
        You can't buy insurance for an illegal activity.
    - oijaf888 13y ago
      Why? Do no insurance polices cover landlords? Or do those policies specify a duration for a tenant to stay?
- jack-r-abbit 13y ago
  I own two houses. I live in one and rent out the other (traditional, long-term lease style... not AirBnB style). My insurance company doesn't care that one is a rental. That is to say, I don't have to lie to them... they know one is a rental and accept it like any other property. The only real difference in my two policies is that the one for the rental is for structure only (possibly some liability too since I am the property owner... I don't recall) while my home has additional coverage for the contents of the house. The renters are advised to get renter's insurance to cover their stuff in my house... but that is completely optional to them. There isn't really any ding to my premiums for it being a rental. I lived in the rental before it was a rental. The full insurance premium (when I lived there) was about twice as much as it is now as a just rental.
- michaelstewart 13y ago
  AirBnB offers insurance.
ChuckMcM 13y ago
Thanks for this, I wondered what the details might be like. I don't suppose you've had the County come after you for occupancy tax yet have you? While in general there are a lot of hotel rooms in Vegas (something like over 140,000) the hotels are a pretty strong political block and have been a thorn in the side of some folks who went the VRBO route.
- a8da6b0c91d 13y ago
  Hotel stays in Vegas are also very cheap. I'm rather surprised he gets a price that lets this work.
  - genwin 13y ago
    Yes, $90 is more than I usually pay in Vegas for a quite nice place.
petercooper 13y ago
It’s possible to find a nice apartment in a major city for less than $50,000. The place I found was in Las Vegas and it cost $40,000. Wow, I had no idea things were that good/bad. Here in the UK, I deliberately choose to live in a cheap part of the country and you'd still be talking $120k or so for an equivalent 1 bed flat. This really illustrates to me why efforts to turn various areas in the US into "mini Silicon Valley" areas could actually work.. when you can have a good, secure base for a year's salary, it surely changes your attitude to risk. I don't think there's anywhere in the UK you could buy a house for under $100K where you wouldn't be getting bricks through your window or dealing with gangs of chavs on a daily basis. I wonder if this goes part of the way to explain why Brits are far more reluctant to take risks in the entrepreneurial sense.. you gotta be on a darn good salary to have a place of your own anywhere on our isles.
- agilebyte 13y ago
  Your GitHub says Cambridge, is that true? I am in Cambridge and it is not cheap here.
  - petercooper 13y ago
    No, I live in the middle of Lincolnshire. Cambridge is a relatively easy 2 hour drive though and GitHub only let me choose from a limited number of UK cities (at least at the time I set up my profile). But yeah, Cambridge is ridiculously expensive. So, increasingly, though is rural Lincolnshire! I'm looking for a 4 bed house close to town and £250k is about the minimum for something decent. I suspect that would barely buy a nice flat in Cambridge though..!
- adaml_623 13y ago
  I think you exaggerate. zoopla and some research gives me (all city centre addresses): Manchester - £55K+ Leeds - £70K+ Birmingham - £45K+ Hull - 50K Bristol - 100K Norwich - 70K etc. If you're happy with a small village then I think you can find even cheaper.
  - objclxt 13y ago
mmagin 13y ago
Does Lockitron work for someone who happens to not have mobile phone service where the rental is? As convenient as it is, it seems like short-duration travelers to a country don't always bother with having a working mobile phone where they're going. If so, I'd hope it's obvious in the listing.
- toomuchtodo 13y ago
  You need a working mobile phone with service, but it doesn't need to be a smartphone. https://lockitron.com/help/mobile#smsaccess https://lockitron.com/help/mobile#smsaccess EDIT: Included more detail about needing a working mobile phone with service, due to ahlatimer.
  - smallegan 13y ago
    His question was does it work without having service. In other words offline mode. I think the answer is that no it does not.
    - toomuchtodo 13y ago
      I thought I answered that, while also providing additional information. I apologize if that seemed rude in any way.
      - ahlatimer 13y ago
        You did not. The OP was asking if you had a phone in the equivalent of "airplane mode" or just no service where you are, would Lockitron work? You have a mobile phone, which meets your criteria, but Lockitron would not work with SMS access, since you can't send an SMS. Would it work for smart phones? I have no idea. The page you linked to didn't say one way or the other (or if it did, I didn't see it).
  - sp332 13y ago
    So, you just need to write down the PIN somewhere you have service, right? Or am I misunderstanding when the PIN gets sent?
sn0v 13y ago
I wonder how he deals with unruly guests.
- naterator 13y ago
  More specifically: What if they completely trash the place? How remote is he, and could he travel to do the repairs on sudden notice? Could legal wrangling over the damage make it no longer worthwhile? What about future guests who are displaced by a damaged and unlivable apartment? What would you do if your neighbor became fed up with unruly guests and tried to do something about it (legal or otherwise)?
  - deleted 13y ago
    [deleted]
- notdrunkatall 13y ago
  By crossing his fingers, I'd imagine.
  - vkou 13y ago
    From the sound of some AirBnB horror stories, its by refunding their money, and eating the loss.
rubyrescue 13y ago
That's roughly a 25% annual return. nice. We're renting out our place in Buenos Aires. We're clearing 10% return and I use it when I go back there to meet with the team. Stays about 80% -90% full, great location. Guests love it. My wife (who doesn't work full time) manages it remotely. It's been a very positive experience and my takeaways are similar to the writer's. It's not passive income, but it's steady...
- pa5tabear 13y ago
  Do you rent to the same people for extended stays? I'm wondering about the amount of work it would take to clean up the room after each guest, and whether that would outweigh the profit.
  - rubyrescue 13y ago
    Our maid runs it now (hands off keys/cleans up). It costs us about 15% of the rental money we get. We focus around 1 week stays.
- RockyMcNuts 13y ago
  also significant labor invested and ongoing to make $13,608 per year (not passive, as you note), transaction costs if you want to sell it, not risk free (although not necessarily much riskier than say the S&P) .
- conanbatt 13y ago
  Would like to know more about this as an Argentinian! Airbnb prices are so steep in buenos aires, how does it make sense for tourists? Even Zonaprops has way cheaper places for weeks and such. In argentina Airbnb is not going to get regulation issues ever.. Would you mind if i gave you my email? Plus we might know each other already.
  - rubyrescue 13y ago
    Sure my email is in my profile... it's $110 US/night but 4 can stay. Cheaper than a hotel and separate bedrooms. So compared to a hotel, way cheaper. Also, safer than zonaprop or BYT where you have to show up w/$700 cash for a week PLUS $700 deposit. Then they argue w/you about the deposit, etc...
anishkothari 13y ago
very interesting post, it's always great to read about other sources of income. I wonder if renting on airbnb is more lucrative than renting in general.
- Avenger42 13y ago
  Depends on how quickly you can re-rent. If you sign a long lease, the landlord typically offers something lower than "market rate" in exchange for lower risk and less time un-rented. One thing he doesn't say is what percentage of the time the room was rented; he only says that it wasn't always making him money because he and his friends occasionally stayed there.
  - anishkothari 13y ago
    That's true about re-renting. I'm guessing he chose AirBnB over traditional renting so that he could stay at the place once in a while too.
noname123 13y ago
Hi j0ncc, Thanks for sharing. I was wondering if you could shed light on your inventory risk, meaning do you find that the market price for your rental and nights reserved is highly dependent on the economy, tourist season and weather conditions or fairly resistant to external circumstances. Furthermore, is your product fairly fungible meaning if you have had to deal with competitive pricing in your locale and/or have had repeat customers. Also, I'm guessing given the relative low price of your rental income and your buying in cash; real estate fluctuation risk is relatively low. Does your purchase qualify as a first time home-owner tax credit? For comparison, a $50K investment with 8% market annual return will compound to $68K in 4 years or $92.5K in 8 years. Using cash-flow discount model, assuming that your real estate property value stays the same and annual income the same, you spend $50K to yield $90K ($40K in illiquid property value and $50K in generated cash) in 8 years, making your net present value of your $50K investment to be discounted at $21.8K. Just food for thought.
- oijaf888 13y ago
  I don't think he would be eligible for the first time home-owner credit since its not owner occupied.
rll 13y ago
If enough people do this it will be the end of Airbnb. This is one of the patterns the state of NY is using against Airbnb while Airbnb is arguing that the service is intended for people occasionally renting out their primary residence. If the state is able to prove a significant number of people used this model Airbnb is done in NY and I fear other states will follow.
- dave5104 13y ago
  I'm not that familiar with the Airbnb situation in NY. Why is this a "bad" pattern that NY state has deemed to be a violation of the law?
  - shiftpgdn 13y ago
    Illegal hotels aka slums. There is a reason hotels are fairly highly regulated. My first (and only) stay at an Airbnb rental resulted in me getting bedbugs.
    - fnordfnordfnord 13y ago
      You won't be safe from bedbugs just because you're in a hotel.
      - username223 13y ago
        I have been for my entire life, but YMMV.
      - rtpg 13y ago
        the likelihood of you getting bedbugs in a hotel room is smaller than from a random room in all of NYC. Granted , the rooms up on airbnb for the moment probably don't represent a uniform cut of NYC, but considering the type of people who would start running unlicensed hotels, I'd imagine it being more likely.
    - lotsofpulp 13y ago
      It is unrealistic to expect any dwelling, whether it be hotel or hostel, to be free of bed bugs, especially if you're in a region with lots of international travelers. There is no effective insecticide for them, they can be impossible to see, and they don't need to eat for months. Now, any decent hotel will be doing periodic checks for bedbugs around the box spring and headboard, and any other wooden furniture. But there will always exist a small chance that the last person to be in the room brought a couple and you will get them. Good news is they don't transmit any disease, and if they bite you, it just itches for a few days and goes away.
atwebb 13y ago
Good, concise write up with real numbers which is nice. But the woman who is doing all that cleaning and contact work for $200/month is the one making this possible (so it seems) and that could quickly eat up profits (though the ROI is great enough that there's lots of room there). EDIT: Also, is there currently an AirBnb manager market? Similar to the cleaner/manager he has, it would be great for people to invest remotely. Do research, fly in to inspect potential properties, purchase and give the cleaner/manager a nice cut? I know there are property management companies but there seems to be some extra finesse (and possible discretion) needed here that I haven't seen from PM companies before.
- 205guy 13y ago
  Indeed. Seems like the place to be is AirBnB property manager. Have 6-12 properties to manage and you have a full-time income and perhaps part-time work. Of course, I would start out low ($200/month) then raise and raise the fee when you become indispensible. The absentee owner is essentially just an investor with the capital outlay. And being far away and totally reliant on the cleaner/manager, you can probably squeeze him until he's making only 10% annual return (better than stock market, just to leave some incentive). The owner makes it easy to arbitrage him when he puts his financials in the open. In your EDIT, I think you are essentially talking about a real-estate investment portfolio manager. You'd take money from investors, fly around and buy up property, then manage the cleaner/managers, take 50% of the profits and give the other 50% to the investors.
- brightsize 13y ago
  In a couple of the Airbnb places I stayed at, which had remote owners who I never saw, the manager was really just a minimum-wage sort of person who met me, oriented me, and periodically came in to do some light cleaning (I was a long-term (months) tenant). In Berlin, one of the guys had the gig as a "mini-job", and seemed quite unhappy when I tried to do any of the housekeeping myself - it was taking EUR out of his pocket by cutting his hours. I would think that it would be very easy, and cheap, to find assistants like this in the States who were not licensed PMs but were just plain folks.
  - 13y ago
pallian 13y ago
Thanks for posting this. I've been debating getting one of these micro homes (http://www.indiegogo.com/projects/nomad-micro-home-easily-assembled-under-30k http://www.indiegogo.com/projects/nomad-micro-home-easily-as...) and setting it up in Whistler to do exactly the same thing as you are... Airbnb it year round.
- johnmurch 13y ago
  I love these design/idea. I wonder if you could setup micro-condo living or "ski bum" living by buy a few of these and small parts of land. I could also see something like this being ideal for a small beach house getaway as you won't be out $XXX,XXX or even MM if it gets taken by a hurricane or storm.
whyenot 13y ago
I wonder what the neighbors think.
- woofyman 13y ago
  When the HOA finds out he's breaking the terms that he agreed to when purchasing the condo, they'll fine him per offense. Then get a lean on the apartment.
  - JonFish85 13y ago
    Nitpick: lien. But yes, if I'm a neighbor there and I find out this is going on, I get angry.
    - woofyman 13y ago
      Condo associations usually allow only a certain percentage of apartments to be rented. If too many units are rented, a buyer won't be able to get a mortgage. And most prohibit short term leasing.
    - woofyman 13y ago
      I wonder is the HOA would have the legal authority to change the locks ?
      - damoncali 13y ago
        In many cases, the HOA can do all kinds of stuff- like fix your house and bill you for it. If you don't pay up, they slap you with a lien.
akennberg 13y ago
How are you promoting Lockitron when they are still not shipping? http://blog.lockitron.com/ http://blog.lockitron.com/
- eru 13y ago
  So the whole post is suspect?
  - spokenn 13y ago
    That's what I'm thinking.
- gkoberger 13y ago
  They've shipped a few devices already.
- ianburrell 13y ago
  There was also an old version of the Lockitron. My understanding is that the old one was a deadbolt replacement while the new one goes over an existing deadbolt lock. They still sell the Lockitron Access (https://lockitron.com/store/buzzer https://lockitron.com/store/buzzer) which works with electronic locks. It is possible that he has one of those.
smallegan 13y ago
How do you go about insuring this? As a second home or as a rental property?
j-m-o 13y ago
I really like the mention of Lockitron, the whole 'keyless entry' idea really is going to be the future of AirBnB rentals. I have several customers who are AirBnB hosts who use my service, Ringo [1], which lets their guests into the units via the apartment buzzer. That combined with Lockitron, and you never need to worry about key transfer again. You can effectively live on a different continent than your AirBnB property. [1] https://www.tryringo.com https://www.tryringo.com
samspenc 13y ago
$200 monthly for a local cleaner who does unlimited cleans AND handles the bookings/inquiries??? That's quite a steal!
- wildgift 13y ago
  she's probably getting ripped off in this deal.
  - lxmorj 13y ago
    She probably signed away her right to stop working for him, and is now stuck working $2 per hour! It can't be that she's a free person able to choose to work for a given rate. She must be a victim!
- kilovoltaire 13y ago
  Yeah, a stat I wish the author had included was what this works out for her hourly wages; seems like it must be quite low.
- stfu 13y ago
  Could actually be a business opportunity: Propoerty management for Airbnb spaces.
- beginagain 13y ago
  Not really. It doesn't take much effort to manage properties like this. Most guests on Airbnb don't want negative feedback as the author mentions, so they make an effort to leave the place as they found it. The person managing the property is probably not the same one cleaning it. She sources her own cleaning team most likely, and very may well have 60 or so properties under her wing. @ 80 properties & 200 bucks per month, after paying the cleaning team, she is pulling 12000 without lifting a finger. Also, I would be willing to bet she does not report all that income.
  - samspenc 13y ago
    Ummm, based on my experience in service-related industries, this doesn't ring quite true. Customer-facing work is really really hard.
malthaus 13y ago
Getting the cleaner to manage 'guest relations' for this cheap is probably a great deal not easy to replicate. Handling them poorly could quickly result in bad reviews. On the other hand, those kind of profits are really just short term until the market catches up. People are not stupid to not take easy profit and / or governments will crack down with regulation and taxes.
wildgift 13y ago
That's messed up for the neighbors. Please don't do this.
- adrianpike 13y ago
  I don't want to come across as being facetious, but why? At least in my building, there's a large percentage of neighbors who I don't know at all - whether they were renting via Airbnb or owners of their condo, it doesn't make a huge difference to me.
  - woofyman 13y ago
    He's breaking the contract with the owners association that he agreed to on purchase. It lowers everybody else's property values and prevents them from selling their unit.
    - brk 13y ago
      Where'd you get a copy of the contract he signed?
      - whyenot 13y ago
        http://valenciahoa.com/admin/uploads/r&r.pdf http://valenciahoa.com/admin/uploads/r&r.pdf Section VIII: "Short term leases (leases with terms less than 30 days) are prohibited."
  - elliottcarlson 13y ago
    Because those people, even if you don't know them, are part of the community of the building, and for the most part people will respect the building they live in (obviously there are those people who don't as well). When you have strangers coming and going constantly, you lose some security in who is around you and when - and while it might be that the largest percentage of AirBNBers will treat the property with respect (and not just the apartment, but the building), it still increases the overall risk (either directly form bad short-term tenants, or even not properly closing the lobby door, or letting people in behind them that should not be in the building).
wbeckler 13y ago
It sounds like travelers to Vegas, the hotel capitol of the US, are savvy enough to check airbnb. And VRBO it seems as well. This is a big pain for searchers. Hipmunk shows each of these, but not very well as they only have a handful of the 1000s of listings from Airbnb. We've tried to help with this at http://AllTheRooms.com http://AllTheRooms.com by aggregating everything we can find.
candybar 13y ago
This has to be illegal, right? I can understand renting out your vacation home or apartment when you're not using it, but buying a home/apartment to run essentially a mini hotel has to run afoul of zoning/licensing/regulations in most places
- gamblor956 13y ago
  He is quite likely violating the COA of the condo development in which he purchased the room. He's also probably violating the building code for short term rental units, which could mean very heft fines. Depending on where the property is located in Vegas, he could also be violating local zoning and use restrictions.
- philsnow 13y ago
  wait, what's the functional difference between those two? intent?
  - abruzzi 13y ago
    that and volume. new people coming in every 3-5 days are potentially more disruptive to neighbors and building owners.
  - candybar 13y ago
    It's like the difference between occasional bets between friends on sports games and being a professional bookie.
wtvanhest 13y ago
Why did you choose to do this remotely?
- iends 13y ago
  He probably lives in an area that is less touristy.
  - kdot 13y ago
    He lives in SF-- high property values
kirpekar 13y ago
I wonder what the monthly rent is there. It might just be a better idea to skip abnb and rent out the place over a 12 month lease.
deleted 13y ago
[deleted]
mariusz331 13y ago
We're building a service called Airenvy (airenvy.com) that caters to short term renting on services like airbnb. We could have been tremendously helpful to the author had we been in the Vegas area. We are growing rapidly in SF and our property owners love all the money we're making them! On average we increase income by 30%!
rytis 13y ago
I live in constant fear of getting a bad review. I wonder when is someone going to come up with an idea how to fix this. As far as I can tell there's not a lot a supplier on airbnb/ebay/etc can do about them. It's all too consumer centric... My subjective opinion is that most bad reviews are unwarranted, left by customers that have unrealistic demands.
- steveisaac 13y ago
  TripAdvisor and others came up with a good solution a while ago - they let the property owner write a reply to a bad review, and post the reply right underneath the bad review.
  - NoodleIncident 13y ago
    I saw those on Amazon a while back, too. It works out quite well, both sides get a say.
  - pmiller2 13y ago
    That's the same thing eBay does. You know what? I never look at them on eBay. All I ever look at is the percent of positive reviews.
    - itsybitsycoder 13y ago
      Being able to post a reply is a solution to a one-off or occasional bad review having an unfairly negative impact. If a large percentage of the reviews are bad, the best solution is probably to solve whatever problems are causing the bad reviews.
  - jack-r-abbit 13y ago
    It looks like AirBnB also allows that.
o0-0o 13y ago
I hope you don't have neighbors that share your walls.
skizm 13y ago
This guy's twitter handle is @jon. Color me jealous. Smart idea though. I've heard of some people who do this in NYC on a larger scale and all of them have reported raking in the cash and even hiring managers so their income is pretty much entirely passive (they just deal with the manager(s)). Seems like a pretty sweet gig if you have the capital.
callmeed 13y ago
Shouldn't he be paying tax? I believe hotel/bed tax in Las Vegas is 12%. On $19,613, that's $2,353.
jkaljundi 13y ago
I wonder could you buy a car and rent a guy and then rent them out on Uber?
- iends 13y ago
  This is already being done, there are stories about a driver starting with his own car and building up a fleet of drivers/vehicles.
southphillyman 13y ago
I think this is pretty common already.... I used ABnb twice last week and both hosts were doing this....one of them currently lives in Nigeria actually. I googled one of the condo's I was staying in and the rent was around $1300 a month, I then looked at the calendar for unit and realized the rent would be paid with about a week and 1/2 of bookings which was present. It's a nice hustle. I'm thinking about doing it though I live in the NE and a comparable unit would run me $2000+ a month I think. I need to do some research but this posting gave me some more ideas
jimt67 13y ago
So you have roughly, a 27% ROI for your first year -- which seems good. Have you accounted for: Income tax? Property tax? Insurance costs? Legal risks: (i.e., you potentially in violation of law)? Liability risks: (i.e., something happens to a tenant)? Property damage risks (may be included in cleanup costs)? Labor costs (i.e., your time)? Property value appreciation/depreciation (could be a positive)? After that is all taken into account, I wonder if you end up netting more from a passive investment.
venutip 13y ago
Stuff like this makes me sad. When I first used Airbnb three years ago, it was easy to find a real person letting out their room or apartment to make some extra money. Nowadays, it's very difficult to tell who is a real person and who is just like this guy: an absentee landlord for a place they've never lived in. It's an abuse of the system, and it's people like this who are going to get Airbnb shut down. Blame them when it happens.
tptacek 13y ago
Exactly what is the difference between what this person is doing and running an unlicensed extended-stay hotel?
- baddox 13y ago
  Nothing. I like it.
  - freyr 13y ago
    And the neighbors may not. Licensing isn't just about the man screwing you over.
- tedunangst 13y ago
  They're disrupting an obsolete industry.
  - camus2 13y ago
    Oh , yeah , "DISSSSRUPT" ! the new startup leitmotiv. that gives them or any "DISSSSRUPTIVE!" startup the right to break the law , doesnt it ? as long as it's on the web , anything goes,hey...
  - JackFr 13y ago
    No, travel agents were an obsolete industry. Hotels are not obsolete, AirBnB is 'disrupting' the industry by ignoring local laws and regulations. It may be that these regulations exist to protect an obsolete business model but it also might not. When your path is blocked by a fence before you tear it down, its a good idea to understand why it was put up in the first place.
    - umsm 13y ago
      In my personal experience, I love travel agents. They were able to: (1) Make valuable recommendations (2) Offer me a better price than any website (3) Save me hours upon hours of wasted time
whyenot 13y ago
Average monthly revenue: $1,634 Rough monthly profit: $1,134 (after cleaning, bills and other expenses) subtract $200 for the monthly maid service, $196 for Las Vegas' 12% hotel tax. HOA fees, utilities, cable, and everything else is only $104 per month? Something doesn't add up here. (But I'm a botanist, not an accountant, so I may not understand something)
- mcpherrinm 13y ago
  I'm not familiar with AirBnB but I'd guess there's no hotel tax being paid? Assuming a $300 for utilities + HOA fees sounds believable
  - whyenot 13y ago
    I just had a look at his listing on AirBNB and he charges a $35 cleaning fee. That also shifts the numbers into the more believable range.
- namlem 13y ago
  He's not paying the tax.
bluedino 13y ago
Just buy houses in Flint or some other lowly rust-belt city. Buy the property for $5,000, fix it up a little (wait to see why) and then find a renter for $700/month. If you're lucky they'll be section 8 so you don't really even have to worry about them skipping out on the rent. Worst case you spend a few months evicting them and then spend a couple grand fixing it up after the house is completely trashed from piles of trash and holes in the walls and urine and feces in the floors. Then the next family moves in and the cycle repeats.
- genwin 13y ago
  There's an article online about a guy who did this for dozens of properties in Detroit. It didn't work out so well because rent is more like $400 a month. The typical fix cost on a $5K property is $20K because of tax payments in arrears and liens and so forth.
- DominicaW 13y ago
  When software engineers discover that they could be slumlords: LOL.
alttab 13y ago
Its called a timeshare.
mbreese 13y ago
If anyone is interested, this looks like the link to the place: https://www.airbnb.com/rooms/643721 https://www.airbnb.com/rooms/643721 Another thing to add to the "if you're thinking of doing this" list - don't write a post about it where you and the location can be identified. This is probably against the HOA agreement (short term leases are prohibited). It also could be a safety issue if you aren't actually living there. Once someone knows the apartment number, someone could see when a particular place isn't going to be occupied and use that to their (ahem) advantage. Seriously kids - don't do this. You'll probably be breaking a bunch of contracts and a fair number of hotel and zoning laws. Not to mention the insurance and liability issues that aren't even remotely discussed in the post.
- deleted 13y ago
  [deleted]
- oijaf888 13y ago
  Are there hotel and zoning laws in unincorporated communities in Nevada?
  - delinka 13y ago
    Probably. It's still in the state of Nevada and in a county. An "unincorporated" town isn't lawless.
    - oijaf888 13y ago
      Right but from a quick scan of https://www.leg.state.nv.us/NRS/NRS-651.html https://www.leg.state.nv.us/NRS/NRS-651.html (admittedly very quick) it appears all he has to do is post a rate card for his maximum daily rate and not discriminate against guests.
      - mbreese 13y ago
        From a quick scan of what I think is likely the HOA rules (http://valenciahoa.com/admin/uploads/r&r.pdf http://valenciahoa.com/admin/uploads/r&r.pdf), you can't have sub-30 day leases. I'm not sure this is the right HOA, but from the Google Street View, the logos are the same.
kayoone 13y ago
isnt he missing income taxes? In germany you would have to pay up to 42% income tax on the profits, depending what other earnings you have.. Still an okay return though.
- kayoone 13y ago
  adding to this: if hed use the profits to pay off the loan on the apartment, he probably wouldnt need to pay income taxes.
mathattack 13y ago
I think this is great. Vegas is the perfect spot. It was overbuilt, there is lots of extra supply, and lots of tourists. Great they made it happen. I would think there are two dangers: 1) It can take a lot of time, and time is money. If you make 200K/year, your time is worth ~100/hour. Spending 100 hours on this takes away a 10K profit. 2) You are the on the hook for big surprises: Theft, something breaks, etc. But again, great for the OP!
- camus2 13y ago
  2) or just getting caught by going public with it... People should not boast about something that is illegal in a state...
- nilkn 13y ago
  > If you make 200K/year, your time is worth ~100/hour. Spending 100 hours on this takes away a 10K profit. Stuff like this doesn't make much sense if you're salaried. People like to break down salaries by the hour, but it's just not true. You can put in all the overtime you want and not see an extra penny of profit, at least not directly. You'll only benefit from it if you actually get a promotion or raise as a direct result of the extra work. If you're contracting, though, and actually charge by the hour, then this calculation makes sense. Also, this is tangential, but $200k is hardly an even remotely typical salary for a developer in the US.
  - mathattack 13y ago
    Ok - 100k and it's 50 an hour. You could be freelancing with that time. Unless you get enjoyment out of rebuilding homes and customer service. In that case, knock yourself out and do 2 more. Or plow the earnings into a housing empire and do it full time.
andr3w321 13y ago
Could someone explain to my ignorant self why zoning a property as hotel and paying hotel tax is necessary? What is it for and why was it created? It seems like a lot of these new startups are the same old business model but skirt costly taxes and regulation (Uber for taxis, Airbnb for hotels, Bitcoin for money transfers)
- chadwickthebold 13y ago
  I believe hotels are regulated and inspected? Not all taxes and regulations are invalid on principle.. Regulations on hotels, car services, and money transfers are usually sold on being in the best interest of the people - protecting their health, safety, and preventing them from being scammed.
  - aetherson 13y ago
    That is the theory. However, these sorts of local business regulations are the kinds of things that I think you should be particularly skeptical of. A few points: 1. It's hard to imagine that there's a ton of democratic oversight over hotel regulation. Prior to AirBnB, did anyone EVER, in your life, suggest to you that you should be concerned about the specifics of hotel regulation in your town? 2. These are local laws. Smaller government components, like city, county, and state, are probably more vulnerable to being captured by medium or large businesses than the federal government is, due to less sophistication and professionalism of the politicians (especially) and bureaucrats (less so). 3. A big hotel has a lot of incentive to try to corrupt local regulation to quash competitors and shore up their business. It directly affects their bottom line. 4. These regulations have accreted over time, leading to complex regulations that have lots of loopholes and potentially anachronistic components to them.
- saalweachter 13y ago
  While part of hotel taxes are simple politics (the best tax base is the one that can't vote for or against you), some of it is also rational: a large tourist population adds cost to running a city, so the cost should be borne by the tourists. For instance, Las Vegas has a population of 600,000, and receives 40 million visitors. If the tourists stay one night a piece, that's an average of 110,000 tourists at any given time -- an extra 18% to the city population which isn't paying most city taxes.
pouzy 13y ago
50k for an appartment in LV ? That sounds way cheaper than I expected. Impressively cheaper. Would you consider making it your full income at that pace ?
jayferd 13y ago
"I'm buying up this incredibly valuable resource to lease it to people who only need it temporarily so I can turn a profit! Cool, right?"
- prawn 13y ago
  Incredibly valuable would mean it cost more than $40k.
- lxmorj 13y ago
  Quick, pick a business where that isn't the way things work! Guy: 'I run a Valvoline' Douche: 'OH! So you BUY UP all the mechanics and then CHARGE PEOPLE to access them?!' Guy: 'Uh, yes. This makes me, the customers and the mechanics better off, dipshit.'
acuozzo 13y ago
I still don't "get" Airbnb. How can anyone be comfortable letting a complete stranger into their home? I'd freak out if someone were to start fiddling with my electronics, perusing my Laserdisc collection, etc.
- gotrecruit 13y ago
  i think the idea is that you do not keep valuables or expensive things in the apartment when there are guests there. either that, or perhaps you also live in there at the same time and only rent out a room or a couch, thus mitigating some of the risks as well.
apierre 13y ago
I wish I could do the same in London. But in that price range, I can only rent out a closet.
bayesianhorse 13y ago
Sounds risky. Four years is a long time. The price of the property can fall sharply, cities might decide they don't want "commercial" one-room hotels, and finally a renter might wreck the place or sue you for something. Yeah, I know, reputation system, rare chance, but rare chances is the kind of thing you often don't want happening to 60K investment!
- jannotti 13y ago
  Four years is a ridiculously quick time to recover the entire cost of an apartment, and that limits the risk a lot. For example, if this gets stopped somehow in the next year or so, he would only lose out if property prices also fell more that 25-40% in that same year or so. The chances of both happening at once seems very, very small to me.
- prawn 13y ago
  Doesn't sound too risky at all to me. Cheap price for the unit (would be $200k where I live) and has already made back a reasonable portion of his investment.
deleted 13y ago
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yannisp 13y ago
Hmm I don't see any mention of equity here but only profit. If you're able to cover the cost of mortgage + HOA/property tax + expenses of running the place then the equity is the profit. Assuming the price of the place is the same in, say, 10 years. Then you've built up 10 years worth of equity buy having someone else pay your mortgage... Of course if this place was bought cash, you could have done the same thing in reverse. Take that money and loan it to an individual to buy a house. The only difference is there's no extra profit to be made but also no added risk of not finding clients, repairs, etc. (unless someone wrecks the place and it becomes worthless)
- jack-r-abbit 13y ago
  I could be wrong but I got the impression he bought it outright and not with a mortgage. But even so, if his mortgage was a traditional 30/yr fixed loan, his monthly payment would ridiculously low. And then he is free to massively over-pay his mortgage payment each month... which is going to pay it off in about the same 4 years he mentions in his write-up.
jwblackwell 13y ago
Wow $40,000 for an apartment that provides ROI in one year. if only you could do that in London...
mceoin 13y ago
Haha - Nice dude! I scraped AirBnB last year to compare it to local prices with the same intent last year to automate. Totally do-able and profitable. Local tenant & housing laws are the most important thing to keep track of IMO. You can outsource the Q/A with guests.
dougabug 13y ago
As a condo owner and resident, the last thing I want is to find myself living in a boarding house. My personal belongings, safety, privacy, the quality of the grounds, and the value of my property all seem to me to be threatened by AirBnB's take down of local regulations, taxes, and HOA covenants. As an individual, my rights are eclipsed by disproportionate corporate power. What are the realistic prospects for Class Action Lawsuits against AirBnB and other scofflaws ala the States vs Big Tobacco?
ye 13y ago
So what happens when 1) Your apartment gets trashed. They break your walls, pour cement down your drain, break the furniture, etc? 2) Tenants refuse to move out. I'm sure there are all kinds of laws protecting them, and it's very hard to kick them out even if they aren't paying. 3) Somebody gets injured on your property (slips in the bathroom and breaks an arm), and sues you for a shitload of money. Also, you forgot amortization in your calculations. Things will wear and tear.
macspoofing 13y ago
Stuff like that is what's going to kill AirBnB. Sooner or later they will have to crack down on this, because if they don't the municipality will, and if they won't (and they will), HOAs will.
argumentum 13y ago
AirBnB + Lockitron = major win, always surprised AirBnB hasn't offered a package like getaround does.
jbarham 13y ago
If anyone's interested in creating HDR photos for real estate, check out my startup TurboHDR (https://www.turbohdr.com https://www.turbohdr.com) which is a service to generate HDR photos in the cloud. Strictly speaking it uses "exposure fusion" which isn't true HDR but the end result is similar to a tone-mapped HDR image and is generally more realistic with fewer artifacts. FWIW it's written in Go and hosted on Google App Engine.
patio11 13y ago
If you're thinking of doing this but aren't sure about the legal side of things, consider buying a duplex or quadplex and living in one of the units yourself. This will let you qualify for owner-occupied rates on the mortgage and insurance, likely insulate you from a condo agreement which would forbid renting, and means that you're the primary party who'd suffer from guest misbehavior, which strikes me as socially optimal. Also, if you tire of Airbnb transient relationships, duplex units are fairly easy to rent out "traditionally." Downside: more capitally intensive, and requires you to be OK with owning a house. This is (pre-Airbnb) one of the classic hacks for middle class Americans to start real estate businesses, since you can fairly easily get sufficient cash flow and/or equity after running a duplex for a few years to get a bank to OK you adding other rental properties.
shawnee_ 13y ago
Find a great property manager / cleaner -- Without one of these doing this remotely would be impossible. I managed to find a great local cleaner on craigslist. She charges a flat fee of $200 per month which covers unlimited cleanings. And she's probably illegal . . . But even if she's not illegal, how can this "property manager" live with himself, taking advantage of people who don't "know" enough (whether of the language or minimum wage laws) to understand that they are being taken advantage of? I was born in Vegas and have seen what that city has become -- if there's one thing in abundance there it's under-the-radar immigrants. This post represents everything that is wrong with the property management and rental industry: White man want easy money. White man charge high rents. White man hire nice, busy ladies who no speak English to do hard work cleaning. White man hire nice, fast men who no speak English to do hard work painting and carpet replacing. White man take profit for himself and give teeny bit to people who no speak English because they no understand how hard it is to make easy money. His cleaning lady is even laundering towels and sheets for $200 per month? How nice of her. I have about 3 or 4 sets of sheets and towels. This way the cleaner doesn’t need to wash everything in the 3 hours between guest check in and check out. They can simply take all the dirty sheets and towels home, wash them, then next time they swing by the apartment have a clean set of everything ready to drop off.
- happyrock 13y ago
  Those evil white men up to no good again. When will the evil white man ever understand his evil? He won't, because evil never knows itself. It's in his nature after all. In other words, yawn.
- donutdan4114 13y ago
  It's not like the cleaner is working 40 hours / week at this guy's place. Depending on how the booking is for the month, she might have to go in and do some cleanup like 10 times per month. Combine her tasks like laundry with other clients to optimize time usage and she can probably handle 20 clients / month. You made so many assumptions about this guy.. Don't try and assume...
- cft 13y ago
  Just out of curiousity what about pre 1913, when there was no income tax and no minimum wages? Were all those people exploited? Was that all immoral or illegal? It was then that the American wealth was created, at the rates that seem incredible now?
arb99 13y ago
A house for 40,000 usd? Thats cheap...
pooky666 13y ago
I think this article was just an ad for Lockitron.
TeeWEE 13y ago
This is illegal in the netherlands. http://nos.nl/op3/artikel/562868-airbnb-mag-alleen-nog-met-toestemming-van-de-vve.html http://nos.nl/op3/artikel/562868-airbnb-mag-alleen-nog-met-t...
deleted 13y ago
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realworldview 13y ago
HackerNews? Is this like saying I sell things on eBay, because it's the new world economy? I would be more interested to hear about the tax situation than furniture delivery times.
guiliop 13y ago
Too bad it's illegal.
pasbesoin 13y ago
Having had more than my share of asshole neighbors, I'd be very worried about their representation in such a constantly churning population. And I would have little sympathy in compelling the local authorities to enforce any and all laws and regulations that would put a stop to the resulting disruption. I see far too many instances, today, of people thinking of and acting on "me, me, me", while ignoring those around them whom they are screwing over.
NOVAlawyer 13y ago
Under the Las Vegas Code of Ordinances (assuming the condo is in the city), the issue is going to be whether the guy is considered an "operator" of "an establishment that rents or holds out for rent guestrooms on a daily or less-than-weekly basis." In that case, he needs a license and needs to pay taxes. See: http://library.municode.com/HTML/14787/level2/TIT6BUTALIRE_CH6.46HOMORO.html#TOPTITLE http://library.municode.com/HTML/14787/level2/TIT6BUTALIRE_C... Beyond that, all that really matters is the "Covenants, Conditions, and Restrictions" (CCRs) document that is recorded in the land records when the condo was created and any other local and state regs governing renting of rooms. The Rules and Regulations statement about short term leases is easily overcome. Just create an operating company that you lease the condo to under a long-term lease - run all the money through the operating company, pay the rent to the owner, and distribute net income. The only "lease" will be the long-term lease to the operating company. Again, there may be local regs about this (or the state's Landlord-Tenant statute: https://www.leg.state.nv.us/NRS/NRS-118A.html#NRS118ASec180 https://www.leg.state.nv.us/NRS/NRS-118A.html#NRS118ASec180), but the "prohibition" under the Rules and Regs is easy to deal with. Again, what matters are the CCRs that are recorded in the land records. If they allow it, my bet would be that this guy's scheme is fine. Plus, I'd also bet that he talked with an attorney about this. If he didn't, he's a damned fool.
zuckit 13y ago
THIS PROPERTY IS LISTED UP FOR SALE AS AN UNDISCLOSED LOCATION. MAKING IT HARD TO FIND. ( http://www.redfin.com/NV/Las-Vegas/Undisclosed-address-89119/home/29483413 http://www.redfin.com/NV/Las-Vegas/Undisclosed-address-89119... ) HOW SUCCESSFUL REALLY IS THIS BUSINESS MODEL? I DON'T KNOW ABOUT YOU BUT IF MY INVESTMENT WAS GENERATING THIS MUCH CASH I DONT KNOW WHY I WOULD SELL IT!

583 points by j0ncc 13y ago

Was there anything specific when applying for insurance? Did you need to disclose it was being rented out or anything (I'm assuming if you had to this would affect premiums)?

crbnw00ts 13y ago
You must be kidding! This is "disruption" we're talking about, after all. That means all precautions, regulations, contingencies, licensing, and everything else are out the window, full stop. What are you, some kind of last-century luddite who hates progress? What do you want, for the bad old pre-startup ways to contaminate things and spoil the party? "Insurance" is for non-entrepreneurial losers, and no one cases about them, because they're not really people anyway! Just do a textual search for "insurance" in the article. Zero results found. Yep, it's "disruption" all right! Full speed ahead!
- woofyman 13y ago
  The only way to buy insurance would be to lie and commit fraud. Home owners associations also require insurance.
  - onebaddude 13y ago
    >The only way to buy insurance would be to lie and commit fraud. I'm sure that's what's happening, probably unintentionally. And you're okay, until a crime is committed, someone is hurt, damages are done or the place burns down. Then the insurance company says, "Oh, you were renting it out? Good luck!"
  - HeyLaughingBoy 13y ago
    Why would he need to lie? Landlord insurance is trivial to get and IIRC (it's been a few years) cheaper than regular homeowner's insurance.
    - woofyman 13y ago
      You can't buy insurance for an illegal activity.
  - oijaf888 13y ago
    Why? Do no insurance polices cover landlords? Or do those policies specify a duration for a tenant to stay?
jack-r-abbit 13y ago
I own two houses. I live in one and rent out the other (traditional, long-term lease style... not AirBnB style). My insurance company doesn't care that one is a rental. That is to say, I don't have to lie to them... they know one is a rental and accept it like any other property. The only real difference in my two policies is that the one for the rental is for structure only (possibly some liability too since I am the property owner... I don't recall) while my home has additional coverage for the contents of the house. The renters are advised to get renter's insurance to cover their stuff in my house... but that is completely optional to them. There isn't really any ding to my premiums for it being a rental. I lived in the rental before it was a rental. The full insurance premium (when I lived there) was about twice as much as it is now as a just rental.
michaelstewart 13y ago
AirBnB offers insurance.

ChuckMcM 13y ago

Thanks for this, I wondered what the details might be like. I don't suppose you've had the County come after you for occupancy tax yet have you? While in general there are a lot of hotel rooms in Vegas (something like over 140,000) the hotels are a pretty strong political block and have been a thorn in the side of some folks who went the VRBO route.

a8da6b0c91d 13y ago
Hotel stays in Vegas are also very cheap. I'm rather surprised he gets a price that lets this work.
- genwin 13y ago
  Yes, $90 is more than I usually pay in Vegas for a quite nice place.

petercooper 13y ago

It’s possible to find a nice apartment in a major city for less than $50,000. The place I found was in Las Vegas and it cost $40,000. Wow, I had no idea things were that good/bad. Here in the UK, I deliberately choose to live in a cheap part of the country and you'd still be talking $120k or so for an equivalent 1 bed flat. This really illustrates to me why efforts to turn various areas in the US into "mini Silicon Valley" areas could actually work.. when you can have a good, secure base for a year's salary, it surely changes your attitude to risk. I don't think there's anywhere in the UK you could buy a house for under $100K where you wouldn't be getting bricks through your window or dealing with gangs of chavs on a daily basis. I wonder if this goes part of the way to explain why Brits are far more reluctant to take risks in the entrepreneurial sense.. you gotta be on a darn good salary to have a place of your own anywhere on our isles.

agilebyte 13y ago
Your GitHub says Cambridge, is that true? I am in Cambridge and it is not cheap here.
- petercooper 13y ago
  No, I live in the middle of Lincolnshire. Cambridge is a relatively easy 2 hour drive though and GitHub only let me choose from a limited number of UK cities (at least at the time I set up my profile). But yeah, Cambridge is ridiculously expensive. So, increasingly, though is rural Lincolnshire! I'm looking for a 4 bed house close to town and £250k is about the minimum for something decent. I suspect that would barely buy a nice flat in Cambridge though..!
adaml_623 13y ago
I think you exaggerate. zoopla and some research gives me (all city centre addresses): Manchester - £55K+ Leeds - £70K+ Birmingham - £45K+ Hull - 50K Bristol - 100K Norwich - 70K etc. If you're happy with a small village then I think you can find even cheaper.
- objclxt 13y ago

mmagin 13y ago

Does Lockitron work for someone who happens to not have mobile phone service where the rental is? As convenient as it is, it seems like short-duration travelers to a country don't always bother with having a working mobile phone where they're going. If so, I'd hope it's obvious in the listing.

toomuchtodo 13y ago
You need a working mobile phone with service, but it doesn't need to be a smartphone. https://lockitron.com/help/mobile#smsaccess https://lockitron.com/help/mobile#smsaccess EDIT: Included more detail about needing a working mobile phone with service, due to ahlatimer.
- smallegan 13y ago
  His question was does it work without having service. In other words offline mode. I think the answer is that no it does not.
  - toomuchtodo 13y ago
    I thought I answered that, while also providing additional information. I apologize if that seemed rude in any way.
    - ahlatimer 13y ago
      You did not. The OP was asking if you had a phone in the equivalent of "airplane mode" or just no service where you are, would Lockitron work? You have a mobile phone, which meets your criteria, but Lockitron would not work with SMS access, since you can't send an SMS. Would it work for smart phones? I have no idea. The page you linked to didn't say one way or the other (or if it did, I didn't see it).
- sp332 13y ago
  So, you just need to write down the PIN somewhere you have service, right? Or am I misunderstanding when the PIN gets sent?

sn0v 13y ago

I wonder how he deals with unruly guests.

naterator 13y ago
More specifically: What if they completely trash the place? How remote is he, and could he travel to do the repairs on sudden notice? Could legal wrangling over the damage make it no longer worthwhile? What about future guests who are displaced by a damaged and unlivable apartment? What would you do if your neighbor became fed up with unruly guests and tried to do something about it (legal or otherwise)?
- deleted 13y ago
  [deleted]
notdrunkatall 13y ago
By crossing his fingers, I'd imagine.
- vkou 13y ago
  From the sound of some AirBnB horror stories, its by refunding their money, and eating the loss.

rubyrescue 13y ago

That's roughly a 25% annual return. nice. We're renting out our place in Buenos Aires. We're clearing 10% return and I use it when I go back there to meet with the team. Stays about 80% -90% full, great location. Guests love it. My wife (who doesn't work full time) manages it remotely. It's been a very positive experience and my takeaways are similar to the writer's. It's not passive income, but it's steady...

pa5tabear 13y ago
Do you rent to the same people for extended stays? I'm wondering about the amount of work it would take to clean up the room after each guest, and whether that would outweigh the profit.
- rubyrescue 13y ago
  Our maid runs it now (hands off keys/cleans up). It costs us about 15% of the rental money we get. We focus around 1 week stays.
RockyMcNuts 13y ago
also significant labor invested and ongoing to make $13,608 per year (not passive, as you note), transaction costs if you want to sell it, not risk free (although not necessarily much riskier than say the S&P) .
conanbatt 13y ago
Would like to know more about this as an Argentinian! Airbnb prices are so steep in buenos aires, how does it make sense for tourists? Even Zonaprops has way cheaper places for weeks and such. In argentina Airbnb is not going to get regulation issues ever.. Would you mind if i gave you my email? Plus we might know each other already.
- rubyrescue 13y ago
  Sure my email is in my profile... it's $110 US/night but 4 can stay. Cheaper than a hotel and separate bedrooms. So compared to a hotel, way cheaper. Also, safer than zonaprop or BYT where you have to show up w/$700 cash for a week PLUS $700 deposit. Then they argue w/you about the deposit, etc...

anishkothari 13y ago

very interesting post, it's always great to read about other sources of income. I wonder if renting on airbnb is more lucrative than renting in general.

Avenger42 13y ago
Depends on how quickly you can re-rent. If you sign a long lease, the landlord typically offers something lower than "market rate" in exchange for lower risk and less time un-rented. One thing he doesn't say is what percentage of the time the room was rented; he only says that it wasn't always making him money because he and his friends occasionally stayed there.
- anishkothari 13y ago
  That's true about re-renting. I'm guessing he chose AirBnB over traditional renting so that he could stay at the place once in a while too.

noname123 13y ago

Hi j0ncc, Thanks for sharing. I was wondering if you could shed light on your inventory risk, meaning do you find that the market price for your rental and nights reserved is highly dependent on the economy, tourist season and weather conditions or fairly resistant to external circumstances. Furthermore, is your product fairly fungible meaning if you have had to deal with competitive pricing in your locale and/or have had repeat customers. Also, I'm guessing given the relative low price of your rental income and your buying in cash; real estate fluctuation risk is relatively low. Does your purchase qualify as a first time home-owner tax credit? For comparison, a $50K investment with 8% market annual return will compound to $68K in 4 years or $92.5K in 8 years. Using cash-flow discount model, assuming that your real estate property value stays the same and annual income the same, you spend $50K to yield $90K ($40K in illiquid property value and $50K in generated cash) in 8 years, making your net present value of your $50K investment to be discounted at $21.8K. Just food for thought.

oijaf888 13y ago
I don't think he would be eligible for the first time home-owner credit since its not owner occupied.

rll 13y ago

If enough people do this it will be the end of Airbnb. This is one of the patterns the state of NY is using against Airbnb while Airbnb is arguing that the service is intended for people occasionally renting out their primary residence. If the state is able to prove a significant number of people used this model Airbnb is done in NY and I fear other states will follow.

dave5104 13y ago
I'm not that familiar with the Airbnb situation in NY. Why is this a "bad" pattern that NY state has deemed to be a violation of the law?
- shiftpgdn 13y ago
  Illegal hotels aka slums. There is a reason hotels are fairly highly regulated. My first (and only) stay at an Airbnb rental resulted in me getting bedbugs.
  - fnordfnordfnord 13y ago
    You won't be safe from bedbugs just because you're in a hotel.
    - username223 13y ago
      I have been for my entire life, but YMMV.
    - rtpg 13y ago
      the likelihood of you getting bedbugs in a hotel room is smaller than from a random room in all of NYC. Granted , the rooms up on airbnb for the moment probably don't represent a uniform cut of NYC, but considering the type of people who would start running unlicensed hotels, I'd imagine it being more likely.
  - lotsofpulp 13y ago
    It is unrealistic to expect any dwelling, whether it be hotel or hostel, to be free of bed bugs, especially if you're in a region with lots of international travelers. There is no effective insecticide for them, they can be impossible to see, and they don't need to eat for months. Now, any decent hotel will be doing periodic checks for bedbugs around the box spring and headboard, and any other wooden furniture. But there will always exist a small chance that the last person to be in the room brought a couple and you will get them. Good news is they don't transmit any disease, and if they bite you, it just itches for a few days and goes away.

atwebb 13y ago

Good, concise write up with real numbers which is nice. But the woman who is doing all that cleaning and contact work for $200/month is the one making this possible (so it seems) and that could quickly eat up profits (though the ROI is great enough that there's lots of room there). EDIT: Also, is there currently an AirBnb manager market? Similar to the cleaner/manager he has, it would be great for people to invest remotely. Do research, fly in to inspect potential properties, purchase and give the cleaner/manager a nice cut? I know there are property management companies but there seems to be some extra finesse (and possible discretion) needed here that I haven't seen from PM companies before.

205guy 13y ago
Indeed. Seems like the place to be is AirBnB property manager. Have 6-12 properties to manage and you have a full-time income and perhaps part-time work. Of course, I would start out low ($200/month) then raise and raise the fee when you become indispensible. The absentee owner is essentially just an investor with the capital outlay. And being far away and totally reliant on the cleaner/manager, you can probably squeeze him until he's making only 10% annual return (better than stock market, just to leave some incentive). The owner makes it easy to arbitrage him when he puts his financials in the open. In your EDIT, I think you are essentially talking about a real-estate investment portfolio manager. You'd take money from investors, fly around and buy up property, then manage the cleaner/managers, take 50% of the profits and give the other 50% to the investors.
brightsize 13y ago
In a couple of the Airbnb places I stayed at, which had remote owners who I never saw, the manager was really just a minimum-wage sort of person who met me, oriented me, and periodically came in to do some light cleaning (I was a long-term (months) tenant). In Berlin, one of the guys had the gig as a "mini-job", and seemed quite unhappy when I tried to do any of the housekeeping myself - it was taking EUR out of his pocket by cutting his hours. I would think that it would be very easy, and cheap, to find assistants like this in the States who were not licensed PMs but were just plain folks.
- 13y ago

pallian 13y ago

Thanks for posting this. I've been debating getting one of these micro homes (http://www.indiegogo.com/projects/nomad-micro-home-easily-assembled-under-30k http://www.indiegogo.com/projects/nomad-micro-home-easily-as...) and setting it up in Whistler to do exactly the same thing as you are... Airbnb it year round.

johnmurch 13y ago
I love these design/idea. I wonder if you could setup micro-condo living or "ski bum" living by buy a few of these and small parts of land. I could also see something like this being ideal for a small beach house getaway as you won't be out $XXX,XXX or even MM if it gets taken by a hurricane or storm.

whyenot 13y ago

I wonder what the neighbors think.

woofyman 13y ago
When the HOA finds out he's breaking the terms that he agreed to when purchasing the condo, they'll fine him per offense. Then get a lean on the apartment.
- JonFish85 13y ago
  Nitpick: lien. But yes, if I'm a neighbor there and I find out this is going on, I get angry.
  - woofyman 13y ago
    Condo associations usually allow only a certain percentage of apartments to be rented. If too many units are rented, a buyer won't be able to get a mortgage. And most prohibit short term leasing.
  - woofyman 13y ago
    I wonder is the HOA would have the legal authority to change the locks ?
    - damoncali 13y ago
      In many cases, the HOA can do all kinds of stuff- like fix your house and bill you for it. If you don't pay up, they slap you with a lien.

akennberg 13y ago

How are you promoting Lockitron when they are still not shipping? http://blog.lockitron.com/ http://blog.lockitron.com/

eru 13y ago
So the whole post is suspect?
- spokenn 13y ago
  That's what I'm thinking.
gkoberger 13y ago
They've shipped a few devices already.
ianburrell 13y ago
There was also an old version of the Lockitron. My understanding is that the old one was a deadbolt replacement while the new one goes over an existing deadbolt lock. They still sell the Lockitron Access (https://lockitron.com/store/buzzer https://lockitron.com/store/buzzer) which works with electronic locks. It is possible that he has one of those.

smallegan 13y ago

How do you go about insuring this? As a second home or as a rental property?

j-m-o 13y ago

I really like the mention of Lockitron, the whole 'keyless entry' idea really is going to be the future of AirBnB rentals. I have several customers who are AirBnB hosts who use my service, Ringo [1], which lets their guests into the units via the apartment buzzer. That combined with Lockitron, and you never need to worry about key transfer again. You can effectively live on a different continent than your AirBnB property. [1] https://www.tryringo.com https://www.tryringo.com

samspenc 13y ago

$200 monthly for a local cleaner who does unlimited cleans AND handles the bookings/inquiries??? That's quite a steal!

wildgift 13y ago
she's probably getting ripped off in this deal.
- lxmorj 13y ago
  She probably signed away her right to stop working for him, and is now stuck working $2 per hour! It can't be that she's a free person able to choose to work for a given rate. She must be a victim!
kilovoltaire 13y ago
Yeah, a stat I wish the author had included was what this works out for her hourly wages; seems like it must be quite low.
stfu 13y ago
Could actually be a business opportunity: Propoerty management for Airbnb spaces.
beginagain 13y ago
Not really. It doesn't take much effort to manage properties like this. Most guests on Airbnb don't want negative feedback as the author mentions, so they make an effort to leave the place as they found it. The person managing the property is probably not the same one cleaning it. She sources her own cleaning team most likely, and very may well have 60 or so properties under her wing. @ 80 properties & 200 bucks per month, after paying the cleaning team, she is pulling 12000 without lifting a finger. Also, I would be willing to bet she does not report all that income.
- samspenc 13y ago
  Ummm, based on my experience in service-related industries, this doesn't ring quite true. Customer-facing work is really really hard.

malthaus 13y ago

Getting the cleaner to manage 'guest relations' for this cheap is probably a great deal not easy to replicate. Handling them poorly could quickly result in bad reviews. On the other hand, those kind of profits are really just short term until the market catches up. People are not stupid to not take easy profit and / or governments will crack down with regulation and taxes.

wildgift 13y ago

That's messed up for the neighbors. Please don't do this.

adrianpike 13y ago
I don't want to come across as being facetious, but why? At least in my building, there's a large percentage of neighbors who I don't know at all - whether they were renting via Airbnb or owners of their condo, it doesn't make a huge difference to me.
- woofyman 13y ago
  He's breaking the contract with the owners association that he agreed to on purchase. It lowers everybody else's property values and prevents them from selling their unit.
  - brk 13y ago
    Where'd you get a copy of the contract he signed?
    - whyenot 13y ago
      http://valenciahoa.com/admin/uploads/r&r.pdf http://valenciahoa.com/admin/uploads/r&r.pdf Section VIII: "Short term leases (leases with terms less than 30 days) are prohibited."
- elliottcarlson 13y ago
  Because those people, even if you don't know them, are part of the community of the building, and for the most part people will respect the building they live in (obviously there are those people who don't as well). When you have strangers coming and going constantly, you lose some security in who is around you and when - and while it might be that the largest percentage of AirBNBers will treat the property with respect (and not just the apartment, but the building), it still increases the overall risk (either directly form bad short-term tenants, or even not properly closing the lobby door, or letting people in behind them that should not be in the building).

wbeckler 13y ago

It sounds like travelers to Vegas, the hotel capitol of the US, are savvy enough to check airbnb. And VRBO it seems as well. This is a big pain for searchers. Hipmunk shows each of these, but not very well as they only have a handful of the 1000s of listings from Airbnb. We've tried to help with this at http://AllTheRooms.com http://AllTheRooms.com by aggregating everything we can find.

candybar 13y ago

This has to be illegal, right? I can understand renting out your vacation home or apartment when you're not using it, but buying a home/apartment to run essentially a mini hotel has to run afoul of zoning/licensing/regulations in most places

gamblor956 13y ago
He is quite likely violating the COA of the condo development in which he purchased the room. He's also probably violating the building code for short term rental units, which could mean very heft fines. Depending on where the property is located in Vegas, he could also be violating local zoning and use restrictions.
philsnow 13y ago
wait, what's the functional difference between those two? intent?
- abruzzi 13y ago
  that and volume. new people coming in every 3-5 days are potentially more disruptive to neighbors and building owners.
- candybar 13y ago
  It's like the difference between occasional bets between friends on sports games and being a professional bookie.

wtvanhest 13y ago

Why did you choose to do this remotely?

iends 13y ago
He probably lives in an area that is less touristy.
- kdot 13y ago
  He lives in SF-- high property values

kirpekar 13y ago

I wonder what the monthly rent is there. It might just be a better idea to skip abnb and rent out the place over a 12 month lease.

deleted 13y ago

[deleted]

mariusz331 13y ago

We're building a service called Airenvy (airenvy.com) that caters to short term renting on services like airbnb. We could have been tremendously helpful to the author had we been in the Vegas area. We are growing rapidly in SF and our property owners love all the money we're making them! On average we increase income by 30%!

rytis 13y ago

I live in constant fear of getting a bad review. I wonder when is someone going to come up with an idea how to fix this. As far as I can tell there's not a lot a supplier on airbnb/ebay/etc can do about them. It's all too consumer centric... My subjective opinion is that most bad reviews are unwarranted, left by customers that have unrealistic demands.

steveisaac 13y ago
TripAdvisor and others came up with a good solution a while ago - they let the property owner write a reply to a bad review, and post the reply right underneath the bad review.
- NoodleIncident 13y ago
  I saw those on Amazon a while back, too. It works out quite well, both sides get a say.
- pmiller2 13y ago
  That's the same thing eBay does. You know what? I never look at them on eBay. All I ever look at is the percent of positive reviews.
  - itsybitsycoder 13y ago
    Being able to post a reply is a solution to a one-off or occasional bad review having an unfairly negative impact. If a large percentage of the reviews are bad, the best solution is probably to solve whatever problems are causing the bad reviews.
- jack-r-abbit 13y ago
  It looks like AirBnB also allows that.

o0-0o 13y ago

I hope you don't have neighbors that share your walls.

skizm 13y ago

This guy's twitter handle is @jon. Color me jealous. Smart idea though. I've heard of some people who do this in NYC on a larger scale and all of them have reported raking in the cash and even hiring managers so their income is pretty much entirely passive (they just deal with the manager(s)). Seems like a pretty sweet gig if you have the capital.

callmeed 13y ago

Shouldn't he be paying tax? I believe hotel/bed tax in Las Vegas is 12%. On $19,613, that's $2,353.

jkaljundi 13y ago

I wonder could you buy a car and rent a guy and then rent them out on Uber?

iends 13y ago
This is already being done, there are stories about a driver starting with his own car and building up a fleet of drivers/vehicles.

southphillyman 13y ago

I think this is pretty common already.... I used ABnb twice last week and both hosts were doing this....one of them currently lives in Nigeria actually. I googled one of the condo's I was staying in and the rent was around $1300 a month, I then looked at the calendar for unit and realized the rent would be paid with about a week and 1/2 of bookings which was present. It's a nice hustle. I'm thinking about doing it though I live in the NE and a comparable unit would run me $2000+ a month I think. I need to do some research but this posting gave me some more ideas

jimt67 13y ago

So you have roughly, a 27% ROI for your first year -- which seems good. Have you accounted for: Income tax? Property tax? Insurance costs? Legal risks: (i.e., you potentially in violation of law)? Liability risks: (i.e., something happens to a tenant)? Property damage risks (may be included in cleanup costs)? Labor costs (i.e., your time)? Property value appreciation/depreciation (could be a positive)? After that is all taken into account, I wonder if you end up netting more from a passive investment.

venutip 13y ago

Stuff like this makes me sad. When I first used Airbnb three years ago, it was easy to find a real person letting out their room or apartment to make some extra money. Nowadays, it's very difficult to tell who is a real person and who is just like this guy: an absentee landlord for a place they've never lived in. It's an abuse of the system, and it's people like this who are going to get Airbnb shut down. Blame them when it happens.

tptacek 13y ago

Exactly what is the difference between what this person is doing and running an unlicensed extended-stay hotel?

baddox 13y ago
Nothing. I like it.
- freyr 13y ago
  And the neighbors may not. Licensing isn't just about the man screwing you over.
tedunangst 13y ago
They're disrupting an obsolete industry.
- camus2 13y ago
  Oh , yeah , "DISSSSRUPT" ! the new startup leitmotiv. that gives them or any "DISSSSRUPTIVE!" startup the right to break the law , doesnt it ? as long as it's on the web , anything goes,hey...
- JackFr 13y ago
  No, travel agents were an obsolete industry. Hotels are not obsolete, AirBnB is 'disrupting' the industry by ignoring local laws and regulations. It may be that these regulations exist to protect an obsolete business model but it also might not. When your path is blocked by a fence before you tear it down, its a good idea to understand why it was put up in the first place.
  - umsm 13y ago
    In my personal experience, I love travel agents. They were able to: (1) Make valuable recommendations (2) Offer me a better price than any website (3) Save me hours upon hours of wasted time

whyenot 13y ago

Average monthly revenue: $1,634 Rough monthly profit: $1,134 (after cleaning, bills and other expenses) subtract $200 for the monthly maid service, $196 for Las Vegas' 12% hotel tax. HOA fees, utilities, cable, and everything else is only $104 per month? Something doesn't add up here. (But I'm a botanist, not an accountant, so I may not understand something)

mcpherrinm 13y ago
I'm not familiar with AirBnB but I'd guess there's no hotel tax being paid? Assuming a $300 for utilities + HOA fees sounds believable
- whyenot 13y ago
  I just had a look at his listing on AirBNB and he charges a $35 cleaning fee. That also shifts the numbers into the more believable range.
namlem 13y ago
He's not paying the tax.

bluedino 13y ago

Just buy houses in Flint or some other lowly rust-belt city. Buy the property for $5,000, fix it up a little (wait to see why) and then find a renter for $700/month. If you're lucky they'll be section 8 so you don't really even have to worry about them skipping out on the rent. Worst case you spend a few months evicting them and then spend a couple grand fixing it up after the house is completely trashed from piles of trash and holes in the walls and urine and feces in the floors. Then the next family moves in and the cycle repeats.

genwin 13y ago
There's an article online about a guy who did this for dozens of properties in Detroit. It didn't work out so well because rent is more like $400 a month. The typical fix cost on a $5K property is $20K because of tax payments in arrears and liens and so forth.
DominicaW 13y ago
When software engineers discover that they could be slumlords: LOL.

alttab 13y ago

Its called a timeshare.

mbreese 13y ago

If anyone is interested, this looks like the link to the place: https://www.airbnb.com/rooms/643721 https://www.airbnb.com/rooms/643721 Another thing to add to the "if you're thinking of doing this" list - don't write a post about it where you and the location can be identified. This is probably against the HOA agreement (short term leases are prohibited). It also could be a safety issue if you aren't actually living there. Once someone knows the apartment number, someone could see when a particular place isn't going to be occupied and use that to their (ahem) advantage. Seriously kids - don't do this. You'll probably be breaking a bunch of contracts and a fair number of hotel and zoning laws. Not to mention the insurance and liability issues that aren't even remotely discussed in the post.

deleted 13y ago
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oijaf888 13y ago
Are there hotel and zoning laws in unincorporated communities in Nevada?
- delinka 13y ago
  Probably. It's still in the state of Nevada and in a county. An "unincorporated" town isn't lawless.
  - oijaf888 13y ago
    Right but from a quick scan of https://www.leg.state.nv.us/NRS/NRS-651.html https://www.leg.state.nv.us/NRS/NRS-651.html (admittedly very quick) it appears all he has to do is post a rate card for his maximum daily rate and not discriminate against guests.
    - mbreese 13y ago
      From a quick scan of what I think is likely the HOA rules (http://valenciahoa.com/admin/uploads/r&r.pdf http://valenciahoa.com/admin/uploads/r&r.pdf), you can't have sub-30 day leases. I'm not sure this is the right HOA, but from the Google Street View, the logos are the same.

kayoone 13y ago

isnt he missing income taxes? In germany you would have to pay up to 42% income tax on the profits, depending what other earnings you have.. Still an okay return though.

kayoone 13y ago
adding to this: if hed use the profits to pay off the loan on the apartment, he probably wouldnt need to pay income taxes.

mathattack 13y ago

I think this is great. Vegas is the perfect spot. It was overbuilt, there is lots of extra supply, and lots of tourists. Great they made it happen. I would think there are two dangers: 1) It can take a lot of time, and time is money. If you make 200K/year, your time is worth ~100/hour. Spending 100 hours on this takes away a 10K profit. 2) You are the on the hook for big surprises: Theft, something breaks, etc. But again, great for the OP!

camus2 13y ago
2) or just getting caught by going public with it... People should not boast about something that is illegal in a state...
nilkn 13y ago
> If you make 200K/year, your time is worth ~100/hour. Spending 100 hours on this takes away a 10K profit. Stuff like this doesn't make much sense if you're salaried. People like to break down salaries by the hour, but it's just not true. You can put in all the overtime you want and not see an extra penny of profit, at least not directly. You'll only benefit from it if you actually get a promotion or raise as a direct result of the extra work. If you're contracting, though, and actually charge by the hour, then this calculation makes sense. Also, this is tangential, but $200k is hardly an even remotely typical salary for a developer in the US.
- mathattack 13y ago
  Ok - 100k and it's 50 an hour. You could be freelancing with that time. Unless you get enjoyment out of rebuilding homes and customer service. In that case, knock yourself out and do 2 more. Or plow the earnings into a housing empire and do it full time.

andr3w321 13y ago

Could someone explain to my ignorant self why zoning a property as hotel and paying hotel tax is necessary? What is it for and why was it created? It seems like a lot of these new startups are the same old business model but skirt costly taxes and regulation (Uber for taxis, Airbnb for hotels, Bitcoin for money transfers)

chadwickthebold 13y ago
I believe hotels are regulated and inspected? Not all taxes and regulations are invalid on principle.. Regulations on hotels, car services, and money transfers are usually sold on being in the best interest of the people - protecting their health, safety, and preventing them from being scammed.
- aetherson 13y ago
  That is the theory. However, these sorts of local business regulations are the kinds of things that I think you should be particularly skeptical of. A few points: 1. It's hard to imagine that there's a ton of democratic oversight over hotel regulation. Prior to AirBnB, did anyone EVER, in your life, suggest to you that you should be concerned about the specifics of hotel regulation in your town? 2. These are local laws. Smaller government components, like city, county, and state, are probably more vulnerable to being captured by medium or large businesses than the federal government is, due to less sophistication and professionalism of the politicians (especially) and bureaucrats (less so). 3. A big hotel has a lot of incentive to try to corrupt local regulation to quash competitors and shore up their business. It directly affects their bottom line. 4. These regulations have accreted over time, leading to complex regulations that have lots of loopholes and potentially anachronistic components to them.
saalweachter 13y ago
While part of hotel taxes are simple politics (the best tax base is the one that can't vote for or against you), some of it is also rational: a large tourist population adds cost to running a city, so the cost should be borne by the tourists. For instance, Las Vegas has a population of 600,000, and receives 40 million visitors. If the tourists stay one night a piece, that's an average of 110,000 tourists at any given time -- an extra 18% to the city population which isn't paying most city taxes.

pouzy 13y ago

50k for an appartment in LV ? That sounds way cheaper than I expected. Impressively cheaper. Would you consider making it your full income at that pace ?

jayferd 13y ago

"I'm buying up this incredibly valuable resource to lease it to people who only need it temporarily so I can turn a profit! Cool, right?"

prawn 13y ago
Incredibly valuable would mean it cost more than $40k.
lxmorj 13y ago
Quick, pick a business where that isn't the way things work! Guy: 'I run a Valvoline' Douche: 'OH! So you BUY UP all the mechanics and then CHARGE PEOPLE to access them?!' Guy: 'Uh, yes. This makes me, the customers and the mechanics better off, dipshit.'

acuozzo 13y ago

I still don't "get" Airbnb. How can anyone be comfortable letting a complete stranger into their home? I'd freak out if someone were to start fiddling with my electronics, perusing my Laserdisc collection, etc.

gotrecruit 13y ago
i think the idea is that you do not keep valuables or expensive things in the apartment when there are guests there. either that, or perhaps you also live in there at the same time and only rent out a room or a couch, thus mitigating some of the risks as well.

apierre 13y ago

I wish I could do the same in London. But in that price range, I can only rent out a closet.

bayesianhorse 13y ago

Sounds risky. Four years is a long time. The price of the property can fall sharply, cities might decide they don't want "commercial" one-room hotels, and finally a renter might wreck the place or sue you for something. Yeah, I know, reputation system, rare chance, but rare chances is the kind of thing you often don't want happening to 60K investment!

jannotti 13y ago
Four years is a ridiculously quick time to recover the entire cost of an apartment, and that limits the risk a lot. For example, if this gets stopped somehow in the next year or so, he would only lose out if property prices also fell more that 25-40% in that same year or so. The chances of both happening at once seems very, very small to me.
prawn 13y ago
Doesn't sound too risky at all to me. Cheap price for the unit (would be $200k where I live) and has already made back a reasonable portion of his investment.

deleted 13y ago

[deleted]

yannisp 13y ago

Hmm I don't see any mention of equity here but only profit. If you're able to cover the cost of mortgage + HOA/property tax + expenses of running the place then the equity is the profit. Assuming the price of the place is the same in, say, 10 years. Then you've built up 10 years worth of equity buy having someone else pay your mortgage... Of course if this place was bought cash, you could have done the same thing in reverse. Take that money and loan it to an individual to buy a house. The only difference is there's no extra profit to be made but also no added risk of not finding clients, repairs, etc. (unless someone wrecks the place and it becomes worthless)

jack-r-abbit 13y ago
I could be wrong but I got the impression he bought it outright and not with a mortgage. But even so, if his mortgage was a traditional 30/yr fixed loan, his monthly payment would ridiculously low. And then he is free to massively over-pay his mortgage payment each month... which is going to pay it off in about the same 4 years he mentions in his write-up.

jwblackwell 13y ago

Wow $40,000 for an apartment that provides ROI in one year. if only you could do that in London...

mceoin 13y ago

Haha - Nice dude! I scraped AirBnB last year to compare it to local prices with the same intent last year to automate. Totally do-able and profitable. Local tenant & housing laws are the most important thing to keep track of IMO. You can outsource the Q/A with guests.

dougabug 13y ago

As a condo owner and resident, the last thing I want is to find myself living in a boarding house. My personal belongings, safety, privacy, the quality of the grounds, and the value of my property all seem to me to be threatened by AirBnB's take down of local regulations, taxes, and HOA covenants. As an individual, my rights are eclipsed by disproportionate corporate power. What are the realistic prospects for Class Action Lawsuits against AirBnB and other scofflaws ala the States vs Big Tobacco?

ye 13y ago

So what happens when 1) Your apartment gets trashed. They break your walls, pour cement down your drain, break the furniture, etc? 2) Tenants refuse to move out. I'm sure there are all kinds of laws protecting them, and it's very hard to kick them out even if they aren't paying. 3) Somebody gets injured on your property (slips in the bathroom and breaks an arm), and sues you for a shitload of money. Also, you forgot amortization in your calculations. Things will wear and tear.

macspoofing 13y ago

Stuff like that is what's going to kill AirBnB. Sooner or later they will have to crack down on this, because if they don't the municipality will, and if they won't (and they will), HOAs will.

argumentum 13y ago

AirBnB + Lockitron = major win, always surprised AirBnB hasn't offered a package like getaround does.

jbarham 13y ago

If anyone's interested in creating HDR photos for real estate, check out my startup TurboHDR (https://www.turbohdr.com https://www.turbohdr.com) which is a service to generate HDR photos in the cloud. Strictly speaking it uses "exposure fusion" which isn't true HDR but the end result is similar to a tone-mapped HDR image and is generally more realistic with fewer artifacts. FWIW it's written in Go and hosted on Google App Engine.

patio11 13y ago

If you're thinking of doing this but aren't sure about the legal side of things, consider buying a duplex or quadplex and living in one of the units yourself. This will let you qualify for owner-occupied rates on the mortgage and insurance, likely insulate you from a condo agreement which would forbid renting, and means that you're the primary party who'd suffer from guest misbehavior, which strikes me as socially optimal. Also, if you tire of Airbnb transient relationships, duplex units are fairly easy to rent out "traditionally." Downside: more capitally intensive, and requires you to be OK with owning a house. This is (pre-Airbnb) one of the classic hacks for middle class Americans to start real estate businesses, since you can fairly easily get sufficient cash flow and/or equity after running a duplex for a few years to get a bank to OK you adding other rental properties.

shawnee_ 13y ago

Find a great property manager / cleaner -- Without one of these doing this remotely would be impossible. I managed to find a great local cleaner on craigslist. She charges a flat fee of $200 per month which covers unlimited cleanings. And she's probably illegal . . . But even if she's not illegal, how can this "property manager" live with himself, taking advantage of people who don't "know" enough (whether of the language or minimum wage laws) to understand that they are being taken advantage of? I was born in Vegas and have seen what that city has become -- if there's one thing in abundance there it's under-the-radar immigrants. This post represents everything that is wrong with the property management and rental industry: White man want easy money. White man charge high rents. White man hire nice, busy ladies who no speak English to do hard work cleaning. White man hire nice, fast men who no speak English to do hard work painting and carpet replacing. White man take profit for himself and give teeny bit to people who no speak English because they no understand how hard it is to make easy money. His cleaning lady is even laundering towels and sheets for $200 per month? How nice of her. I have about 3 or 4 sets of sheets and towels. This way the cleaner doesn’t need to wash everything in the 3 hours between guest check in and check out. They can simply take all the dirty sheets and towels home, wash them, then next time they swing by the apartment have a clean set of everything ready to drop off.

happyrock 13y ago
Those evil white men up to no good again. When will the evil white man ever understand his evil? He won't, because evil never knows itself. It's in his nature after all. In other words, yawn.
donutdan4114 13y ago
It's not like the cleaner is working 40 hours / week at this guy's place. Depending on how the booking is for the month, she might have to go in and do some cleanup like 10 times per month. Combine her tasks like laundry with other clients to optimize time usage and she can probably handle 20 clients / month. You made so many assumptions about this guy.. Don't try and assume...
cft 13y ago
Just out of curiousity what about pre 1913, when there was no income tax and no minimum wages? Were all those people exploited? Was that all immoral or illegal? It was then that the American wealth was created, at the rates that seem incredible now?

arb99 13y ago

A house for 40,000 usd? Thats cheap...

pooky666 13y ago

I think this article was just an ad for Lockitron.

TeeWEE 13y ago

This is illegal in the netherlands. http://nos.nl/op3/artikel/562868-airbnb-mag-alleen-nog-met-toestemming-van-de-vve.html http://nos.nl/op3/artikel/562868-airbnb-mag-alleen-nog-met-t...

deleted 13y ago

[deleted]

realworldview 13y ago

HackerNews? Is this like saying I sell things on eBay, because it's the new world economy? I would be more interested to hear about the tax situation than furniture delivery times.

guiliop 13y ago

Too bad it's illegal.

pasbesoin 13y ago

Having had more than my share of asshole neighbors, I'd be very worried about their representation in such a constantly churning population. And I would have little sympathy in compelling the local authorities to enforce any and all laws and regulations that would put a stop to the resulting disruption. I see far too many instances, today, of people thinking of and acting on "me, me, me", while ignoring those around them whom they are screwing over.

NOVAlawyer 13y ago

Under the Las Vegas Code of Ordinances (assuming the condo is in the city), the issue is going to be whether the guy is considered an "operator" of "an establishment that rents or holds out for rent guestrooms on a daily or less-than-weekly basis." In that case, he needs a license and needs to pay taxes. See: http://library.municode.com/HTML/14787/level2/TIT6BUTALIRE_CH6.46HOMORO.html#TOPTITLE http://library.municode.com/HTML/14787/level2/TIT6BUTALIRE_C... Beyond that, all that really matters is the "Covenants, Conditions, and Restrictions" (CCRs) document that is recorded in the land records when the condo was created and any other local and state regs governing renting of rooms. The Rules and Regulations statement about short term leases is easily overcome. Just create an operating company that you lease the condo to under a long-term lease - run all the money through the operating company, pay the rent to the owner, and distribute net income. The only "lease" will be the long-term lease to the operating company. Again, there may be local regs about this (or the state's Landlord-Tenant statute: https://www.leg.state.nv.us/NRS/NRS-118A.html#NRS118ASec180 https://www.leg.state.nv.us/NRS/NRS-118A.html#NRS118ASec180), but the "prohibition" under the Rules and Regs is easy to deal with. Again, what matters are the CCRs that are recorded in the land records. If they allow it, my bet would be that this guy's scheme is fine. Plus, I'd also bet that he talked with an attorney about this. If he didn't, he's a damned fool.

zuckit 13y ago

THIS PROPERTY IS LISTED UP FOR SALE AS AN UNDISCLOSED LOCATION. MAKING IT HARD TO FIND. ( http://www.redfin.com/NV/Las-Vegas/Undisclosed-address-89119/home/29483413 http://www.redfin.com/NV/Las-Vegas/Undisclosed-address-89119... ) HOW SUCCESSFUL REALLY IS THIS BUSINESS MODEL? I DON'T KNOW ABOUT YOU BUT IF MY INVESTMENT WAS GENERATING THIS MUCH CASH I DONT KNOW WHY I WOULD SELL IT!