Has anyone tried vacation renting a POH on airbnb or other rent site?
@adk1guy Why would you want to do that?
That would be a terrable situation for other full time tenants. Don’t do it.
We started doing that a couple months ago in a new 2br home that we kinda had sitting as an office to satisfy the state. So we have been charging a lot rent and paying the utilities and are making another 750-1000 in profit. We are gonna do the same thing in another park we have as well. These are in Indiana. Both parks are clean and well maintained.
I should say perhaps not everyone realizes how the airbnb works. Everyone is fully vetted by us as well as airbnb. We do not accept local people. What we are attracting are contractors and other professionals for a week to a month at a time. The other residents do not get disturbed. There are cameras on the exterior of the home as well as any problems and they would have to leave and that would ruin their standing with airbnb.
I do not know if everyone is aware of how airbnb is operated but the reality is that as with any type of business dealing with the public there are nightmare stories. Governments are trying to cobtrol, lisence and regulate them to make them safer etc.
I have heard many bad situations arising from having airbnb mixed in with residential home owner communities. Most homeowner communities do not even like the idea of conventional rental properties let airbnb in their area.
You can manage upfront but can not control the situation once the people are in the airbnb. Short of getting rid of them there is little you can do but by then the damage is done.
My opinion is based mostly on the fact that I have never warmed up to the idea of airbnb from the beginning so take it with a grain of salt.
If the park is strategically located on a lake or close to a ski resort, an AirBNB can be a great way to add to your top line revenue. I have two waterfront trailers I’ve made AirBNBs. In the summer months, they do well. Fall and Winter isn’t as busy obviously.
Lot rent is $500 monthly in this park. However, I can rent these homes for $200-300 a night depending on the season. For me it makes sense, but I can say managing AirBnBs isn’t my idea of a good time. I’ve since put a manager on the task to get me out of the day to day.
I own furnished apartment rentals in the Pittsburgh area with a minimum of 30+ day stay. It’s been knocking it out of the park with double rents and high quality tenants/guests. You get that with not much more effort once it’s setup. Turning units is pretty easy using services like turnoverbnb.com to find cleaners and smart locks for access. In my case it’s been traveling medical pros, but there are other niches too. You get the higher rents and better tenants with mid-term rentals. I would consider this to try to juice my income in the right situation near hospitals, universities, or recreation areas.
I’ve heard Airbnb rentals are about 30% 30+ day rentals. There’s a site that specializes in mid-term furnished rentals called FurnishedFinder.com. Good luck!
I have a client who has done this. IE converted POHs into AirBnB/VRBO rentals. He does very well for himself. $150-250/night average 20 nights a month. Regular Space rent is $650.00.
He has quadrupled his income.
The Cashflow from a MHP is valued as an Annuity. IE a Bank/Investor will assume they will get the $650/mo/space forever.
A Short Term Rental is a business. I do not know the valuation model, but based on my knowledge and experience I wouldn’t value the Short Term Rental income as an Annuity. I would use a multiplier.
IE 2 X Trailing 12 months.
The saying in the VRBO market goes like this " You live and die from your reviews". So the operator of the business has a lot to do with the performance of the business.
Let’s Crunch the numbers.
50-space MHP at $650/space/month
$650 x 50 x 12 x .6 (expense ratio of 40%) / 8% Cap Rate = $2.9MM
$200 (average nightly) x 20 Night/month x 50 x 12 Months x 50% expense x 2 (2 times trailing 12) = $2.4MM
Maybe you could argue that the VRBO income is additive to the MHP income. I don’t know.
The rule of thumb that I have heard/gone by is only 10% of non-space rent income should be additive to the park’s value.
Obviously, the VRBO Model has WAY higher Cashflow. So the Cash on Cash Return would be PHENOMENAL.
You just need to decide what’s right for you.
Short Term Rentals is a business.
MHP is an investment.
Nothing says you can’t do both, that way you are always half right and half wrong.