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 Grit and Polish - Bryant Airbnb Master Bedroom Door Knob

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.

The Grit and Polish - Bryant Airbnb Living Hanging Chair 3

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.

The Grit and Polish - Bryant Airbnb After Dining Table

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

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16 Comments

Comments

  1. I have a question. Do you have to pay any special use taxes or hotel tax since you are using it as an Air BnB? I know this kind of thing varies widely, but I am curious about the tax implications of owning a short-term or nightly rental.

  2. This is so interesting. I never did the math to see which rental type was more lucrative. I often dream of moving outside of San Diego and ponder the idea of renting this house. But I get worried that someone will ruin the hardwoods or not leave the washing machine door propped open to air out. I’m the ultimate worry wart!

  3. Mikael Gavin says:

    Thanks! Super helpful and interesting information.

  4. Thanks for sharing this post and starting this series. I really enjoyed it. I do find that many times people don’t calculate “risk” into their investments. It will be interesting to see if the risk of having to rent so often will pay off versus having the security of yearly leases. Good luck!

    • Yeah there’s definitely some uncertainty with Airbnb, but we’ve found that we’re 90%+ booked every month as long as we adjust pricing for unrented days when we get close to them. But of course we’re in Seattle, which is a pretty busy place that sees lots of visitors.

  5. Hi Cathy, Belated congratulations on the arrival of Daphne! She’s such a cutie! I am not an Airbnb host but I am a Airbnb renter 🙂 so this is interesting to me. Plus I love to see your design aesthetic. Keep going! 😀

  6. This is super interesting! Like Tracie, I don’t host, but I do use Airbnb frequently when traveling. It’s neat to read something from an owner’s perspective. Thanks for a candid post!

  7. This is not necessarily directed at Cathy, just a general point I tend to make about short-term rentals. I know it can be a delicate issue, but I’d just ask anyone thinking about converting a long-term rental into a short-term rental to consider the greater impact on your community if you are living in an area that has an existing or potential long-term rental housing shortage. In some areas a lot of historically long-term rental units are being taken off the market for short-term rental purposes, which contributes to the shortage and leads to increased displacement, especially in areas where housing is more expensive. Worsening shortages combined with high demand push rents even higher and make it harder for lower, and even middle income earners in some areas (e.g., the Bay Area) to afford to live in the cities where they work. It’s also hard on the elderly and persons with disabilities who often cannot afford to pay high rents. Again, it’s a delicate issue, because it’s generally more profitable to do short-term rentals, and there are some who would argue that it’s an owner’s right to make as much money off a property as the market will bear. Or if rental income is how you make your living and provide for your family, it’s certainly understandable that you’d want to maximize a rental’s profits. I don’t think there’s any one right answer, but I also don’t think it hurts to at least be aware of the cumulative impact that short-term rentals might have on your community in deciding whether conversion is the right thing for a particular property.

    • Jen, I really appreciate you brining this up! Your comment got me thinking about some larger issues at play and I discussed it with Garrett during our recent drive to Seattle. It’s so important to consider the bigger picture of what we do – whether it’s our work or our hobbies or how we spend our money – and be aware of how it impacts our community, our environment, and the world as a whole.

      Housing affordability is a real issue in many urban locations, and it’s certainly the case in Seattle. Converting traditional rental stock into month-to-month rentals or Airbnbs does affect the overall housing climate by reducing the inventory for long-term residents. But it seems to me like that’s a fairly minor component of housing affordability with the main driver being the restrictive zoning that prevents new units from being added. I’m not advocating for a blanket increase in zoning in Seattle, but I do think there’s a sensible way to increase density while still preserving neighborhood character. As you said, there’s no right answer, but those are a few thoughts I had.

      On a personal level, we really try to craft inspiring living spaces that preserve the historic integrity of our homes and are a benefit to the community. Perhaps it’s a delusion of grandeur, but I see what we do as a form of preservation. Take Dexter for instance. If we hadn’t fixed it up and were able to make top dollar on rent, it would make more sense for us to sell the property to a developer who would tear it down and replace it with a large, modern, expensive home. Thus erasing 100 years of history and neighborhood identity.

      Plus another real driver for us is that furnishing and decorating old homes is a passion of mine, so converting our rentals to furnished spaces has been a wonderful opportunity to make money on something I love doing ☺

      • Jen, thank you so much for commenting about this. I had the exact same thought and was trying to figure out a tactful way to comment about housing shortages that didn’t come off as trolling.

        Cathy, I really appreciate your choice to be open with your family’s finances on the blog, and your willingness to address this side of the topic when asked. I am a long time reader of your blog and clicked over specifically for this post- and was left disappointed when the effect of short term rentals on the greater community wasn’t addressed. So again, thank you for being open to talk about it. I will say however, as food for thought, that your response is a bit contradictory. Yes, upzoning makes it possible for more housing to be built in an urban neighborhood, but the majority of that market growth will not be people converting their basements to rentable units… it will come from development. Development which as you say, tears down the character of a neighborhood and replaces it with large, modern buildings. Strong communities are build on people being involved and invested in how their individual actions affect everyone. You do wonderful, beautiful work. It inspires those that visit your blog (including myself), and makes a positive difference on each block you touch a house on… so please don’t discount the changes it makes to a block when properties become vacation or short term rentals.

        • Thanks for your comment Gretchin. I can see how my response seemed contradictory – I should have mentioned that I don’t support blanket up-zoning. I think that up-zoning can be done in a thoughtful way that can keep the character of a neighborhood intact. I’m a big fan of backyard cottages and duplexes inside traditionally-single-family urban neighborhoods and allowing the main increase in housing to come from up-zoning on arterials and in areas that already have commercial and/or mix-use development. Not everyone will agree with me, but I think the Wallingford neighborhood of Seattle has done a good job with this, with relatively few homes being torn down and lots of new units (and great restaurants) being added on arterials. I’m also a big fan of adaptive reuse and love when developers find a way to expand existing buildings while keeping the historic façade. With growth, especially the unprecedented growth in Seattle, comes change and that is hard and sadly some beautiful old homes will be torn down. There is not a one-size-fits-all answer, but those are just a few thoughts.

  8. Thanks for sharing your experience being a host! Would love to hear more about it!

  9. We have a similar situation here at Fahnestock house and wish we would’ve started vacation rentals years ago! We’ve found our numbers to be similar to yours ( double profits) and we also find month to month rentals for the winter ( we charge double what we would make renting it long term, but we, of course, are furnishing it and paying utilities). We’ve been “house hacking” for years and I only recently learned it’s a thing. 🙂 I am new to your blog, but I really have enjoyed reading! Shannon

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