AirBnbs in Boise are Booming!

AirBnbs in Boise

AirBnbs are taking off in the Treasure Valley!

Your next investment might need to be a short-term rental. Watch to find out why!

Jesse Taff: What's up guys? Jesse Taff, Bryce Gonser, Buying the 208 and we wanted to bring up how big the Airbnb market is growing and how Boise is one of the top markets for short-term rentals.

Bryce Gonser: Alright, so Jesse, I know we've had a tonne of people come and ask, you know what the numbers look like on Airbnb? Is it better? Is it worse than long-term rentals where some of the numbers are because I know that you're looking for your own yourself as well? What do some of those numbers look like? 

Jesse Taff: Yeah, exactly. So first, Boise and meridian and really the Treasure Valley are incredibly high right now for occupancy rates for short-term rentals. So, it's a great time to be in that world. So like you mentioned, me personally, that might be my next purchase would be more of a short term or an Airbnb focused property rather than a long term rental, and the numbers we're seeing, or the numbers we're kind of targeting are probably, you know, smaller single level family homes, really the price range for 25 to that 475 range, give or take, you know, 1100 to 1500 square feet, three-bedroom, two-bathroom, and the biggest kicker is they need to look pretty. Airbnb is all about how it looks, necessarily the statistics like you would be when you're buying a home. So, it needs to look pretty, it needs to be furnished well, and you're going to get some good renters. But what's really cool is in our excitement is the potential income or revenue. We're targeting double what you would for a long-term rental. So, whenever I have a client or me personally, I want to run the numbers to say, Will this property work number-wise for a long-term rental? And if it does, that's one checkbox, you know, you're secure in that aspect and then what would it run as a short-term rental. So, if we find a 1500 square foot home, that would you know, rent it, let's say $2,000 for round numbers, we're targeting $4,000 a month revenue for a short-term rental on that property. Yeah, and most of them pencil out that way.

Bryce Gonser: That's absolutely insane because if you guys know anything about the round market, just how fast you know, over 20% increase in rent prices here in the valley. Airbnb is able to double that. If I was gonna buy a single-family home, I would definitely do it as an Airbnb because I get to double my money. What's the vacancy rates look like right now?

Jesse Taff: Yeah. So, it depends on the area. Of course, it depends on the property type too, but on average, 80-90% occupancy rate. So, the vacancy rate for Airbnbs is 20% to 10% or less in some aspects and people always ask who's renting it? And it's a really wide mix, which is great because you're not stuck to one industry. But we have people vacationing here. We have people visiting family, friends, college students, or college-age kids. We also have, of course, a lot of people coming here to see if Boise to the Treasure Valley is the next destination. So, people are shopping for homes.

Bryce Gonser: Absolutely! And I know that on the mortgage side, guys, I get a lot of questions like, how do you use Airbnb to offset? Really there's no program that Fannie Mae or Freddie Mac has yet now that could change in the future and the reason being is it's so undulating, right? You have Airbnb for a week or a couple of days, like how do you come up with an equation to offset that debt when you're purchasing that home. So, what you have to do is, when you're purchasing that home, they'll treat it no differently than if you're going to be having a long-term tenant or short-term tenant. So, part of the appraisal process is ordering what's called a 1007 rent schedule, where the appraiser will go out there, they'll take into account fair market value and fair market rents of that property and then we can use 75% of that number to offset that mortgage if we need it. Sometimes we get people we get investors that their overall cash flows their overall income, they can take that full hit on that mortgage, and we don't need to worry about ordering a 1007 but that's how you do it and then from there, you know in the future if you want to buy another property, and you need to offset that property original purchase that you original property that you purchased, either have to convert it to a long term rental and give us a 12-month lease contract or we have to wait a full year for it to show up in your schedule for tax returns and then we can use 100% of that income to offset so that's just kind of how it works on the number side but guys definitely check out hit up Jesse some of these numbers that we're seeing absolutely insane.

Jesse Taff: Yeah, the return right now is definitely in short-term rentals and then you know, things may change but right now is a good time to take advantage of it.

Bryce Gonser: Absolutely! So, guys any questions on Airbnbs hit Jesse up. Hit myself up. We'll talk to you soon.

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