With its beautiful beaches and nesting sea turtles, Topsail Island is a popular family vacation destination in North Carolina.
While observing the constant flow of tourists, Kathy, a local, came up with a bright idea for how to make a profit for herself. But first I wanted to seek outside advice.
Do not miss it
Cathy recently appeared on The Ramsay Show and asked the radio personality’s opinion on whether she should buy a property and turn it into a vacation rental to take advantage of seasonal visitors. Kathy and her husband already own a rental property that pays them $1,700 a month, but they could also rent out her home base and turn her $280,000 property into an Airbnb.
In response, Dave Ramsey was quick to warn her not to ruin his life.
“No, you won’t,” Ramsey said when he pitched the idea of Airbnb. “You have a very good life. Don’t ruin it with Airbnb.”
What Ramsay is worried about
Listing your home on short-term rental sites like Airbnb or Vrbo sounds like a great idea in theory. Since 2019, nightly room rates have increased by 36% to an average of more than $200 per night in North America.It’s more than 6000 yen per month. if You can rent a room every night.
At first glance, it sounds like a dream of passive income, but running a short-term rental property can quickly turn into a nightmare.
“This isn’t ‘go to the mailbox and collect a bunch of checks,'” Ramsey said. “Airbnb is hard work.”
Maintaining an Airbnb is essentially like running a small business, Ramsey says. Just like running a hotel, Airbnb requires commitment. It is your responsibility to keep the place clean, in good repair, and to make sure the renter is available for emergencies or questions.
On top of that, you’ll typically be dealing with new tenants every few days. Also, short-term tenants can be more careless with the property than long-term tenants.
“They will destroy your property,” Ramsey says. And while you’re stuck cleaning, you might have to contend with angry neighbors complaining about the noise.
Finally, there is a growing backlash against short-term rentals in certain cities, especially in downtown cores and tourist-heavy areas. Some cities have begun to limit the types of residences that qualify, require expensive licenses, impose additional taxes, and only allow primary residences to be rented.
Even if there are currently no rental restrictions in your area, laws may change and you may suddenly find yourself unable to rent your home.
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Alternatives to Airbnb
Airbnb may not be the get-rich-quick scheme you’re hoping for, but that doesn’t mean you can’t earn passive income from any property. If you want to make money with your home, Ramsey suggests “buying a home.”[ing] A cheap house in a corner of town. ”
He says low-income rental properties have a higher rental-to-value return on investment than luxury rental properties in better neighborhoods. Ramsey himself bought a house years ago for $11,000, and his monthly rent was $1,500.
However, that route is fraught with many difficulties. He recalls personally collecting rent on the doorsteps of tenants’ homes every week.
Additionally, renting your home base for investment opportunities can be risky, especially if: Mortgage interest rates are just as high recently.
For those looking to earn some extra cash as a landlord, there is an alternative option that doesn’t involve the risk of dealing directly with tenants. For example, real estate investment trusts (REITs) income real estate Condominiums, shopping centers, office towers, etc. They collect rent from tenants and pass that rent on to shareholders in the form of regular dividends.
You can also consider crowdfunding platforms that allow you to purchase pieces of physical real estate, from rental properties to commercial real estate. some options Intended for accredited investors, minimum investment amounts can reach tens of thousands of dollars.
Even if you are not an accredited investor, many platforms allow you to: invest a small amountEven at prices as low as $100.
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This article is for information only and should not be construed as advice. PROVIDED WITHOUT WARRANTY OF ANY KIND.
