Avery Carl - Short-Term Rental, Long-Term Wealth: Your Guide to Analyzing, Buying, and Managing Vacation Properties

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Your Guide to Analyzing, Buying, and Managing Vacation Properties

AVERY CARL

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Short-Term Rental, Long-Term Wealth: Your Guide to Analyzing, Buying, and Managing Vacation Properties

Avery Carl

Published by BiggerPockets Publishing LLC, Denver, CO.

Copyright 2021 by Avery Carl.

All Rights Reserved.

Publishers Cataloging-in-Publication Data

Names: Carl, Avery, author.

Title: Short-term rental, long-term wealth : your guide to analyzing, buying, and managing vacation properties (with Airbnb, Vrbo, and more!) / by Avery Carl.

Description: Denver, CO: BiggerPockets Publishing, 2021.

Identifiers: LCCN: 2021935115 | ISBN: 9781947200449 (paperback) | 9781947200456 (ebook)

Subjects: LCSH Vacation rentals. | Vacation homes. | Real estate investment. | Real estate development. | Personal finance. | BISAC BUSINESS & ECONOMICS / Real Estate / General | BUSINESS & ECONOMICS / Real Estate / Buying & Selling Homes | BUSINESS & ECONOMICS / Personal Finance / Investing

Classification: LCC HD7289.2 .C37 2021 | DDC 643.25--dc23

Printed on recycled paper in the United States of America

10987654321

For Luke, thank you for always pushing me to make my dreams a reality, and thank you for everything you do every day to make them come true. Every success we have had is because of you.

For Max and Nash, you can be anything you want to be if you put your mind to it. I cant wait to see what you grow up to become, and Ill have your back every step of the way.

Love, Mama

Its never too late to work 9-5you can work real hard, or just fantasize.

KISS, GOD GAVE ROCK AND ROLL TO YOU II

When I was a kid, my family would rent a huge beach house for a week-long vacation in Destin, Florida. Thats what nearly every family does when they vacation on Floridas Emerald Coast.

Every year, I wondered who owned the houses we rentedthey were always huge, with a private pool, right on the beach. I assumed they belonged to some ultra-wealthy person who had endless amounts of disposable cash and spent a few weeks a year at their luxurious beach home. Though I often wondered what they did for a living to be able to own such a property, it never occurred to me that people were actually making money off their beach homes.

Little did I know that one day I would grow up to become one of those financially savvy people.

In this area of Florida, everything from simple one-bedroom condos to luxury twelve-bedroom villas with rooftop pools is available to rent on an overnight or weekly basis. As far back as I can remember, I have never heard of anyone staying in a hotel on the Emerald Coast. My parents families rented houses for vacation here in the 1960s and 70s, when my folks were kids. My mom and dad even met while renting in the same condo building in Destin.

It didnt dawn on me until well into adulthood that owning this type of rental could be a viable investment strategy, one that might build my personal wealth to an extent I never considered possible.

I was introduced to the idea of short-term rentals as a means to cash flow in my early twenties in New York City. I was living with two roommates in a 1,000-square-foot apartment in Bushwick, Brooklyn (dont call me a hipster). One roommates boyfriend lived down the street and was in a band that toured several months a year. While on the road, he would rent out his room to cover his expenses. That strategy worked so well for him that he convinced his roommates to allow him to rent out the couch while they were all home as well, even though they didnt have a true living room. As is common among young, broke New Yorkers, the living room had been walled off to create a private bedroom for one of the full-time roommates. Thus, the couch ended up in the kitchen. The kicker? It wasnt even a real couch; it was a futon, the kind that one can get at Target for $250. Who on earth would want to rent a crappy futon in someones kitchen?

As it turned out, lots of people were happy to rent a futon in someones kitchen. The renters were mostly other 20-somethings seeking adventure in New York City on a very modest budget. The roommates rented out that couch in the kitchen often enough to bring in a few hundred bucks a month, which knocked down everyones rent significantly. This led to the musician renting a handful of long-term furnished apartments in Brooklyn that he in turn rented out by the room on an overnight basis (a practice called rental arbitrage, which has since been heavily regulated and all but outlawed in New York).

He and my roommate were able to spend months at a time living in a beach house in Puerto Rico while I was picking up double shifts as a bartender to afford flights home to Mississippi for the holidays. Rather than seeing this system for the genius entrepreneurial venture it was, I saw it as a quick hustle to avoid having a real job. I assumed the opportunity to generate income that way was not sustainable and would dissipate at some point.