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| Sunroom - my favorite part of the house |
If you have been reading real estate blogs or following real estate groups for the past few years everyone has been talking about short-term-rentals (AKA STRs, Airbnbs, vacation rentals) and saying it was THE way to make money in real estate. There are trends in everything and real estate is no exception. A few years ago it was flipping, and now it's short-term rentals.
As a person who grew in the middle of the US and didn't see the ocean for the first time until I was 19, I really wanted a beach house. I love the beach. My dog loves the beach. My husband hated the beach, but he went with us anyway. It was my dream.
And we bought one in 2022.
Before we purchased, we looked at properties on several different beaches and I ran the numbers over and over again on individual properties to see what kind of profit/loss we could expect. I read everything I could in online groups about the unforeseen costs and pitfalls. I made budgets for furnishings and read posts about how much people spent to furnish their properties. The wear and tare to expect from guests and everything else you can imagine. I researched for at least a year.
We weren't new to real estate. We bought our first rental house in 2016 and sold the second one to turn into our new beach house. We own farmland that's rented too, not just homes. We have experience in different markets and different kinds of RE investment.
We were prepared, right? Right? Right? Wrong.
Y'all, we have lost a ton of money on this house. Like I don't even know how much because I cannot bring myself to really look at the math. There are times I have almost cried (actually I did, a few times).
If you are thinking about buying a property as a short-term rental, keep reading and learn from my mistakes.
Furnishing a Short Term Rental Takes a Lot of Stuff
One piece of the
Home Reserve couch
Paraphrased from my husband, "I didn't realize how much stuff you needed for an Airbnb." He said things to this effect a lot and it really annoyed me because I had done a lot of research and made lists of everything we needed.
Anyway, think about everything you have in your house - dishes, blender, blankets, iron, wall art, end tables, lamps - that you have acquired over years and imaging buying all of it again. It is not only a lot of money, it is a lot of time to source and then assemble. We have day jobs and it took us months to setup our STR.
You will see people online say they have furnished their whole STR for 3,000 on Facebook marketplace and I am sure they did. In my home area, I could definitely do this, there is a ton available. At my beach house, during the off season, there is nothing available because almost no one is there. During the high season, the only people there are vacationers. There just isn't the same market for secondhand goods that I'm used to in my home area, and yes I did buy a few things at home and trek them out to the beach but since I don't have a truck and it's a long drive, I only did this a little bit with smaller items.
We were also doing this when supply chains were really unreliable. Getting a reasonably priced couch that could actually be delivered in the next two months proved very challenging. We tried local furniture stores but their sofas were 6,000+ because they were catering to the million dollar beach front homes.
Eventually we ordered one couch from Home Reserve that had to be assembled (it took DAYS) but it was nice that we could get replacement parts if needed down the line. And the other couch came from Wayfair. It actually ended up being really comfortable.
The Home Reserve couch was just ok. It wasn't deep enough so I never found it that comfortable.
I don't like letting other people manage my investment.
There I said it. I am not sure there is a management company that exists that could make me happy, but it is really frustrating when you've only had a few guests for the season and the company is charging you to deliver new pillows because a previous guest took them and it wasn't noted (pillows are big, how do you miss that?). So yeah, guest stole my property and I was charged to replace it rather than the guest. Things like this are happening over and over again.
The last straw was when I came to the house at the end of the season to find the window broken and they had not told me. How long was it broken and just letting the AC I was paying for out? Who knows.
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| My cat helping me paint. |
I am sure all of you out there are screaming "self-manage" at me right now and I'm thinking about it, but when I bought this property, I really didn't have messaging guests in mind. I have a demanding full-time job already. Plus, I live several hours away from this property so I would need to find someone reliable to go over and check the property, and deal with the issues that require someone to be there, in person.
The STR market has softened significantly.
So I launched my property right before the market really softened. I did buy in an area that's well known and has been a successful beach destination for decades but 2023 was right after the COVID high of STRs, it was the year people felt comfortable going to abroad again and they had gone to the beach the last two summers. The projections I had used of past income for similar properties were not accurate anymore, so I had a lot less revenue than I expected.
Future plans for my beach house.
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| Giant pile of dirty linen the summer renters left |
Well, it might have been for the house but my husband and I split and sold the house as part of our divorce in 2024. The second year of rental ownership, I did a 3-month rental for the summer and
managed it myself. I made less money, but it was also less work and I had other things going on (mainly getting divorced).
I will be honest that I have not done the math on if a profit overall was made overall because the whole topic depresses me now. Possibly it was because while we only owned the house a few years, the market kept going up. I think it was pretty close to breaking even, with maybe a 15k profit or loss overall.
And I did have some nice visits to the beach for those two years.
Would I do it again?
Maybe. I would not do it again if I needed the house to make a profit, but I would perhaps buy a place for me to use and rent it out some. I think I would also buy a condo with at least the exterior maintenance provided by the HOA becuase it would be easier to manager from a distance, or at least I think it would.
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