My husband and I have been investing in real estate together since 2008, and while the majority of that time has been long term rentals in 2019 we fell hard for a short term rental and it changed the trajectory of our investment career.
One of the best things about real estate investing is that it appreciates over time. If you’re new to the game, that means that it’s worth more and more over time as opposed to something like a car that depreciates over time.
In 2019 I decided to jump on the short term rental train. It wasn’t new, but I was in a place where I felt I could manage something less passive than long term rentals. I also knew this would give me a creative outlet to design new spaces. A year seemed like long enough to find out if the short term game would work for our area, so I told Michael about my idea and promised that I would quit if it wasn’t profitable within the first year.
My only problem now was that I needed a property to experiment with.
In May of 2019 we found and purchased a 3/2 house that was partially remodeled. It was in a primo location so we knew finishing the work would be worth it and would add value to the property. It also had a detached one bedroom apartment on the property.
Bingo.
By the end of the summer I had finished the remodel on both the house and the cottage. The house rented to some wonderful young professionals. Now I just needed to furnish and rent the cottage.
I spent $1,000 on furnishings, linens, and stocking the kitchen. You can see my go-to STR must-haves HERE.
We went “live” on August 18th, and within 48 hours of I had my first booking. And then another. And another.
In the first month we PROFITED $800. How?! Because the rent from the main house covered the mortgage/tax/insurance, and the tenants pay their own utilities.
We save $300 out of our profit for maintenance and other expenditures that occasionally pop up with rentals, but still. Not too shabby for a one bedroom cottage that doesn’t even have a washer and dryer!
In the months that followed, our expenses stayed between $450-500 per month and we profited anywhere from $1,100-1,600 per month. Needless to say I have been hooked ever since, especially since $100-200 profit per month on a long term rental is considered good. It’s easy to see why this rental is my favorite.
So the bottom line here is that our short term rental biz is producing much higher income than those same properties would as long term rentals. Is it more time consuming? Yes. Does that bother me? Not at all. This property showed us a whole new way to make a living and I think would work just about anywhere that allows short term rentals.
