Bryant House // Why We Turned a Traditional Rental into an Airbnb
THE BRYANT HOUSE This is part 1 of our Bryant House Airbnb makeover. See more of this series here: part 1 (why we turned a traditional rental into an Airbnb), part 2 (living room), part 3 (master bedroom), part 4 (kitchen and dining nook) and part 5 (bathroom and office)
We recently converted one of our Seattle rentals into a furnished Airbnb. I'll be sharing the quick transformation of the Bryant House (we did it in just 3 days!) over the next few weeks here on the blog, but today, I wanted to begin with a little history about the house, explain why we converted a long-term rental into an Airbnb/month-to-month rental, and take a peek at the numbers.
The Bryant House was built in 1920 and is a compact 2 bedroom/1 bathroom bungalow in a cute Seattle neighborhood. We purchased the house in 2012, our second house, and moved into it so we could rent out our first house, which we had already renovated. We did a quick bathroom renovation at the Bryant House and a couple of months later tackled the kitchen and dining rooms. We lived there for just over a year, during which time we welcomed baby Wilder and then bought and renovated the Ravenna House. The Bryant House then became a traditional rental, left unfurnished and leased annually.
Fast forward to 2017. Bryant had seen a few tenants over the years and in August, the most recent lease was up. Garrett and I debated whether to rent it for another year or convert it to an Airbnb, the former of which was easier and the latter of which was definitely harder, but also more lucrative (although it would require an initial investment to furnish the home). Ultimately we decided to furnish the house and list it on Airbnb. There were other considerations too - like the neighborhood culture and the house's busy location next to a coffee shop, restaurants, and a yoga studio - that made this property a good fit for short-term and month-to-month tenants. And if you're thinking about a similar conversion, a few other things to consider: local short-term rental laws, the impact of the rental on the neighborhood, and the city housing climate as a whole.
I'll let you in on a little secret. Over the past 9 years of being landlords, Garrett and I have found that renting on Airbnb during the summer months and then finding month-to-month tenants for the rest of the year is our ideal rental model. It's a delicate balancing act between cost, effort, and return, but we make almost double using Airbnb versus any other rental model between June and September (high tourist season in Seattle). Of course there is the expense of utilities as well as cleanings/turns, which we try to take on ourselves as much as possible, but even with hiring some of that out, we still make substantially more renting through Airbnb over the summer months.
When Fall hits, we like to find month-to-month tenants on Craigslist. These tenants - who are usually looking to buy a home of their own or are undertaking a renovation on their existing house - pay between 12-25% more for a furnished rental with flexible lease terms than they would for a traditional year-long, unfurnished rental. We've also found that month-to-month, furnished rentals make close to the same in the Fall/Winter/Spring as Airbnb would over the same time period. But the biggest benefit with this model is not having to clean the property or deal with guest communication (which takes quite a bit of time) for months at a time. For us, that means less driving over a mountain pass, less time on our cell phones, and lots more time outdoors and with our kids. So even if we make a bit less on month-to-month tenants than we could on Airbnb during this time, it's worth it to us. I will mention that when we haven't found month-to-month tenants in the Fall/Winter/Spring, we've made quite a bit during the holidays and graduation season with Airbnb, so it's not a bust.
Airbnb Host Tip // balance effort and profit by using Airbnb during peak months and finding month-to-month tenants during slower months. We often use Airbnb for just the summer months and switch to lower-maintenance month-to-month tenants for the rest of the year.
So that's a lot of information packed into a few paragraphs, but hopefully I answered the question of why we chose to convert Bryant to an Airbnb/furnished month-to-month rental. One more thing I wanted to share about hosting on Airbnb...it can be really fun. Hosting guests is a great way to meet people (or at least communicate with them) from all over the world. We've found that in general, guests are really respectful of our homes, and we have loved sharing our spaces and Seattle with those guests.
Now a bit more about the numbers... I still need to tally the total cost of furnishing the Bryant House (i.e. our initial investment or cost to turn a traditional rental into an Airbnb), but we anticipate the number to come in around $6,000. And while that is a lot of money, it is not a very large budget for furnishing an entire home. I had to be pretty creative to keep this budget in check by utilizing a lot of hand-me-down furniture and finishes we had stored from other properties.
From an investment standpoint, our return on converting Bryant to an Airbnb/month-to-month rental looks like this: we expect to recoup our initial investment in the first 11 months, which means the switch to Airbnb would pay off before the end of the first year. Admittedly it's hard to project exactly how Bryant will rent over the year - that's the constant uncertainty that goes along with being a landlord - but that's our projection based on past experiences.
Next up, I'll be sharing the transformation of the house, starting with the living room, plus tons more tips for Airbnb hosts. Let me know if you guys liked this look into the life of a landlord and/or if you have any more Airbnb questions. And if you happen to be an Airbnb yourself, I'd love to hear any advice you have for other hosts!
xoxo
-Cathy
p.s. The 'How I Built This' podcast featuring the Airbnb founders. It's a great listen!
p.p.s. the Bryant House kitchen renovation