Happy 2019! I have exciting news here at the Start An Airbnb blog! I (John) just finished building a second Airbnb space. My wife and I have been Airbnb hosts since 2015 and are in a position to grow our business further. In the summer of 2018, I bought a historic 1940’s cottage in Franklin, TN. If you have never been to Nashville I highly recommend you stop in and walk around downtown Franklin. The city is full of rich history from the civil war and you will never meet more salt of the earth people. Hence, stumbling across a home that was pulled from the market was a sign to pull the trigger and have faith. This is our journey to Start An Airbnb 2.0.
The new home is considerably smaller than the home my family currently lived in. Going from 2,500 sq ft. to 1,500 sq. ft. proved to be a challenge for a family of five. However, determined to make it work we moved to an area that is more beneficial for the entire family. I am a real estate agent and will save you from reading about the logistics of the contract and the hoops buyers must go through when buying a home. If you have a specific question regarding real estate feel free to check out Home Stream Hustle and listen to my podcast or read the blog.
Packing Up The Family
In the end, we closed on the home and made our way of moving the family to the new digs. There were a handful of reasons why moving to this specific area was the only way it would work for us. One, we would be selling our old home with the Airbnb that generated $2,398 per month on average. It was imperative that we find a property that would allow us to continue our Airbnb adventures. Second, finding a home zoned for the public school system we wanted for the kids was a top priority. The kiddos were entering grade school and we wanted to plant roots that would get them through the school system as long as possible. Third, but certainly not least, we wanted to escape the notorious HOA (Home Owners Association) living.
Our First Airbnb
If you have followed the blog then you may remember the post when we started our first Airbnb back in 2015. For those that have not read Start An Airbnb you should definitely give it a glance. That Airbnb generated $2,398 on average per month over the course of 37 months. At the end that Airbnb grossed $88,336.24. The real kicker from all this was adding the additional 950+ square feet when we initially started this Airbnb. Working from a blank canvas (basement) allowed us to build tremendous equity when we sold the home. During the 37 months, our Airbnb paid the mortgage and a large chunk of the utility bills.
Another priority for the family was to find a house zoned for the school system we wanted. Luckily, there were new homes hitting the market weekly. However, none of which truly checked most of what we needed and wanted. The search went on but nothing was really catching our eye. The ones that were truly amazing were out of our budget.
Several months passed and it was not until my wife was casually driving around when she noticed this one house she really liked no longer had a sign in the yard. Up to this point, this home was actually over our budget. Therefore, we did not give it much thought other than the fact that it was an old 40’s cottage within walking distance of the elementary school for our kids. It was not listed as sold yet so I had to contact the listing agent.
Turns out it was under contract but the potential buyers backed out of the deal. They were actually living in the home at this time. The sellers removed it from the market to do some repairs done by the ex-buyers and would re-list in a few months at a lower price than it had been currently listed before. We did not know the new list price. However, since we knew it would be lower we could prepare financially.
My wife and I got rolling on loan approval with our lender so we could be ready to jump on this home when it was ready to hit the market again. And a few months later it was re-listed at a lower price and we jumped on it. Submitted an offer that was accepted and we closed 45 days later!
The Notorious H.O.A.
We met some wonderful neighbors and made lifelong friends while living in a neighborhood with an HOA for eight years. However, there is certainly a downside to living in an HOA and we were just finally ready to pack up and move on to greener pastures. At some point, I will write a blog post (or two) about all the fun adventures and nightmares I had living in an HOA. That is a story for another day!
Go For Launch
The priority boxes were checked. The home we bought does not have restrictions regarding short-term renting. The kids’ elementary school is within walking distance. And no more Home Owners Association. Just good ole’ city living. Like I mentioned before, our new home is roughly 1,500 sq. ft. A small price to pay for getting everything we wanted on our list. The home does have an additional 1,000 sq. ft. unfinished basement. At some point, we will look into finishing out all or a portion of it. The ceilings are rather low at eight feet so it will take some ingenuity to make it a functional living space. But that is for a future project! Obviously, we could not give up a portion of the 1,500 sq. ft. to be used as a short-term rental.
The plan from the beginning was to build an addition, either attached to the main house or completely separate that would sit further back on the 1/2 acre lot.
We brainstormed with our contractor about our first idea of building a separate structure on the property. In fact, there was already a 15 x 20 concrete slab in the rear corner. The possibility of building off of that slab was exciting. Plus, it would save on cost since that foundation was already there. For a fleeting moment, my wife and I thought about fixing up an old Airstream and parking it on the slab to use as an Airbnb. But with the red tape of Codes and the logistics of running water and electric to the Airstream we thought it would be best to build a physical structure.
My wife and I got busy drawing up basic plans for that space. Our contractor did some preliminary work on figuring out the best way to use the current concrete slab and run plumbing and electrical to that area as well. Since it was a good 200 ft. from the main house it would be very labor intensive to tie into the existing lines. Labor intensive and expensive.
We all met to go over the details. Papers scattered around the table. Drawings and pictures of beautiful homes and studio apartments piled up for inspiration. Our contractor, Eric, dropped a small bomb, or rather a few bombs. First, the existing concrete slab is essentially unusable for a structure. It sloped slightly on the property and was not structurally sound enough to build on. So we would need to lay an entirely new slab. Second, the cost to run roughly 200 ft of plumbing lines and tie into the current sewer system would be a small fortune.
With this new information, my wife and I decided it best to scrap the idea of building a separate structure but instead build an addition off the rear of the existing home that could be used as a studio apartment. And if we were to ever stop running an Airbnb in that space then it would become our own master bedroom. Best of both worlds. Stay tuned for more!