We’ve been debating this back and forth about what to do with our house in Denver. Should we sell it? Should we keep it and rent it out? Should we Airbnb the whole house?
Before I get into this too deeply, I should say that we live in Denver, CO. It’s quite a hot market right now because of the influx of people from around the country. Your mileage may vary depending on how your market is doing.
So with that disclaimer out of the way, here’s our thought process on this.
We live in a pretty great area of Denver about a mile away from Downtown proper. I’m going to come off as biased (because I am), but our neighborhood is the best neighborhood in Denver. We’re near a ton of great restaurants, neighborhood bars and breweries, and eclectic coffeeshops. The selection is wide and varied from all-vegan restaurants to Thai food, gastropubs to chill lounges, even a classic English pub where they show soccer matches on the telly all day long. We have a Denver B-Cycle station a couple of blocks from the house and there are so many stations around Denver that if you’re visiting, it would be one of the best ways to get around.
Somewhere in all those dots is the one next to our house and you can pick up and drop off a bike pretty much anywhere in the city.
Ok, back to us!
We have a friend who owns a loft in Downtown about two miles away. He showed it to me and told me about the story of how he decided to Airbnb his place last year when a tenant just up and moved out on him in the middle of their lease!! It turned out to be good for my friend because when he started Airbnb’ing his place, it was quite a success! I told Annabelle his story and after some discussion we decided to test the Airbnb waters a bit with the spare bedroom we had in the house. It wasn’t quite the downtown loft that my friend has, but like I said earlier, we’re in a great location.
We painted the room, furnished it tastefully but minimally from furniture we bought on Craigslist, took some fantastic photos of it, and wrote a cute little description on Airbnb. One hurdle stood in our way, however: getting the proper licensing through the city! Starting January 1st this year, the city of Denver required all short-term rentals (Airbnb, VRBO, etc) to register with the city in order to get taxed like hotels (~15%!!!!). The process was simple in theory (fill out forms, pay fee for license, receive license), but the instructions posted on the city’s website left much to be desired.
After filling out the forms and paying the fees, making several phone calls, getting transferred to various departments because apparently the number listed in the instructions was the wrong one, I finally received my license number — now we’re in business (literally). Easy 😝
Click “Submit” aaaannnnnnnd we’re officially a little red pin on Airbnb!
Having just started and without any of the coveted 5-star reviews we decided to differentiate ourselves by lowering our price to about 33% below the general/average rate for comparable rooms in the neighborhood. Our goal was to get as many people through as possible, give them excellent service, and get as many 5-star ratings as possible before we had to make a decision on what to do with the room.
The first day went by and……..nothing.
The second day went by and……..a note on the public listing showed: “This home is on people’s minds. It’s been viewed 3 times in the past week.”
Well, it’s a start.
The third day went by and….I started doubting the fruitfulness of my labor and whether our home/room was even good enough to consider being on Airbnb. We might as well just close up the whole listing.
Laying in bed that night, staring at the Airbnb app thinking to myself, “why isn’t anyone booking?!?”, and……. I got a text from Airbnb! “Valentina Inquired about your room”
I excitedly opened the message on the app:
I am looking for a place to stay in Denver for 5 weeks while I attend massage school and I loved the room you are renting out.
Just wanted to double check – you do have a cat in the house, right?”
Yes, of course we have a cat — it says so in the listing.
Thank you for getting back to me so fast! Unfortunately I am allergic to pets, so staying with one is not an option for me, even if the cat is always in the other room. You place looks awesome, that’s why I decided to reach out to you and double check regarding the cat. Best of luck to you.
We’re better off anyway. That booking wouldn’t have worked out for our goal of getting multiple 5-star reviews. She would have monopolized the entire calendar and, although we would have made a nice profit from her stay, her stay was not in line with our strategic goal.
Two more days went by. More lookie loo’s but no bookings.
After 6 days on Airbnb:
“Hello! My boyfriend Brandon and I are both so excited to visit Denver! We both have never been but have always wanted to explore the city! We can’t wait to visit and look forward to meeting you guys. See you next month! Savannah”
Our first booking!
Then the next day:
Is your place still available? Our original AirBnB reservation fell through at the last minute (we booked it months in advance). My boyfriend and I will be arriving tomorrow and we are leaving on Sunday morning. Diane”
OF COURSE YOU CAN STAY WITH US TOMORROW!!!
I replied to Diane right away and practically leaped out of bed, “BABE! WE HAVE AN AIRBNB GUEST COMING TOMORROW!!!”
Diane and her boyfriend Alex stayed with us. They were wonderful guests and great people to have stay with us.
A few bookings and a few guests later, Annabelle and I looked at each other while eating dinner and talked about what we should do with the house. It was a long discussion because, after all, this decision would alter how we would operate while we were away on our RV road trip.
If we sold, we would make some money because of the equity, but then when we got back we faced not being able to afford anything within the city limits and would be forced to move somewhere where we don’t necessarily want to be, but could afford.
If we rented, we would cover our mortgage and make a couple hundred bucks a month, but not as much as if we Airbnb’d the whole house (at $200/night average rate for a 3-bedroom home, that MORE than doubled what our mortgage payment is). The downside to Airbnb’ing, however, is that we wouldn’t have a consistent income throughout the year we were gone in the RV and may not have much going on in the winter months.
What to do, what to do?
In the end, we decided to hedge our bets and do a hybrid option. We felt this was the best option for us because:
- We would be able to rent out two of the three rooms to long-term renters which will almost cover the mortgage.
- If we’re ever back in Denver for a visit, we can stay in our own home!
- We only need a few nights per month to cover the remainder of our mortgage — everything else can go to savings!
- After we come back from RV trip, we’ll still be able to live in Denver.
So that’s it! We decided to stay, keep our home in Denver, and take some risk but not so much that it would make or break our mortgage payments each month.
Pretty awesome, huh?!