I’m 25 and bought my first house last October. I got it for 250k in a nice town in metro Detroit. Apparently after all my renovations, the house is worth maybe around 300k. My mentality was I need to get this quick or I’ll never afford a house the more homes go up. And I think I was right. I can’t see anything for less than 270-280k in my town just months later. I’d say I’m happy about the purchase and investment.
I was thinking about renting out my house short term to save some money. Maybe I can list it for around 2.3k fully furnished for a period of 3-6 months. I have a place to stay with my parents and my grandparents. That’s where I was before I bought this house. I see homes listed for around 200 a night here.
I was even thinking about Airbnb. I can list it and when people are interested I can tidy it up and stay with family. I’m an artist so my house is very unique. And I think this will make it competitive compared to others in the area.
Would that be a good financial decision? I’m leaning more to the Airbnb idea.
Renting out my house temporarily to save money
byu/No_Play_6736 inpersonalfinance
Posted by No_Play_6736
8 Comments
can you afford to make the payments on your mortgage for a year while you pay for a lawyer to evict a tenant that will not leave or pay rent? if not, you’re gambling with your entire investment.
Airbnb is a more profitable option if you are willing to do some extra work. Renting is more stable and less work, but comes with complications like tenants overstaying etc..
Are you in a place that 3-6 month leases are common? How about a destination where Airbnb would make sense? Sure, a football town Fri-Sun might, but that’s not going to pay your mortgage when you have to pay for cleaning and empty rooms Mon-Thurs.
This is a decision that you’re making way too late. If you can’t afford the house, you need to sell.
Be aware that your homeowners insurance may not cover the property in case of loss while you are airbnbing it and you will need a landlord policy if you rent it long-term. You could get a roommate?
Airbnb isn’t an awful idea but it really is hospitality and your place has to be spotless and depersonalized when you have a guest. In the early days of Airbnb I rented my one bedroom apartment for a time while staying on and off with my boyfriend. I had a second set of bedding and locked my personal items in the closet. Now, many municipalities, including mine, have made the permitting process to legally operate an Airbnb to onerous make it a casual venture for someone that just wants to rent a few weekends a month. Airbnb works closely with municipalities to check permit licenses and will lock down your listing quickly if you try to list it without the appropriate local license.
25 and first home:
Did you get an FHA loan or similar?
One of those that EXPLICITELY bars renting?
Worth double checking.
don’t compare $200/night to normal rent without subtracting the headache.
airbnb is a business: turnover, damage, cleaning, taxes, rules, insurance, vacancies. if you only need temporary cash flow, a medium-term furnished tenant is probably the saner route.
You can try searching for rentals or AirB&B for Your neighborhood to see what you may be able to rent your house for if you want to do this. You should also check to find out if there are any local rules and regulations you need to know about. You could also rent a room on AirB&B so you don’t need to move out or fully move out. You can also check if there are special events in your area. For short term rentals you could try Craigslist.
What about the compromise solution of staying in the house and renting out spare bedroom(s)?
But certainly, living at home rent-free with parents is always going to be the best purely financial choice.