Life plans change in a flash. A new job means a quick relocation to another city, or a health scare may mean a road trip to travel the world, carpe diem style. Or maybe you’ve had enough of winter, and you’re ready to do the snowbird thing for some of, but not the whole, year.
If you’re not going to be in it for a chunk of the year, what do you do with your primary home? The one you thought you’d be living in forever?
A new collaboration between Realtor.com and Airbnb gives you a ton of the data you need to evaluate your decision quickly. Although renting your primary should not just be a numbers game, the knowledge you gain from a couple of quick clicks should help you build your case one way or another.
How It Works
Intrigued? Here are the steps:
- Log on to Realtor.com and input your primary address.
- “Claim” your home and answer a few questions (e.g., whose name is on the title) to prove you’re the owner.
- You’ll likely see an image of your home inside and out from the last time it was listed, likely when you bought it. You may need to update the bedroom and bathroom count and anything else that’s wonky.
- Click on the tab “host or rent,” which shows you how Airbnb would calculate your earnings. Keep in mind that the Airbnb calculation defaults to a seven-day rental, not a 30-day rental. It’s confusing because they show you the seven-day amount as if it were a monthly total.
Here’s mine (outside of NYC):
What to Consider
Okay, now you have the number. What now?
Just like any other STR investment, you’ll want to think about how you’d manage it. Who will handle things like guest communications, cleaning, and fixing something when it breaks? Will you hire a management company? In addition, to get an accurate revenue estimate, you’ll also want to factor in a conservative vacancy rate in your area.
Also, make sure you really want to STR it. If you’re truly moving away for most of the year, consider less labor-intensive forms of rental and income, like medium-term rentals (especially if you live near hospitals) or even long-term yearly rentals. This is, of course, a trade-off: You’ll likely earn less money, but you’ll also have to put less work into it.
You’ll also want to ask yourself: Are you better off just selling it and flipping the profits into another investment? Getting your primary residence ready to rent out is going to be a lot of work. Just like moving to a new house, you’ll need to depersonalize your whole space, which involves such fun tasks as packing up closets and kids’ rooms and figuring out where you’ll store your personal items, for example.
It’s not an insignificant task, especially if you’ve been living in your primary residence for a while. This is especially cumbersome if you’re planning to move back and forth. You’ll need a plan to set up and break down your personal items each time you transition.
With all this in mind, you can make an informed decision. Is it worth it to STR your primary? Only you know the answer!
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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.