About three years ago, Compass Real Estate agent Phillip Murrell discovered an attractive off-market duplex in the M Streets. He liked it so much, he and his partner bought it. Then they had to decide whether to seek out a long-term tenant or try the short-term rental market.
“At that point, Airbnb was big but a lot less tested than it is now,” Murrell recalls. “I didn’t know anyone personally who did an Airbnb.”
He initially rented out the bottom unit to a client who needed a place for six months. Upstairs, he began adding consignment furniture along with some of his own. Before long it was time to list the space and see what happened.
“The response was almost instant,” Murrell recalls. “Upstairs we were getting well over $2,700 per month.”
When the downstairs tenant was ready to move out, Murrell converted that unit into an Airbnb property as well. From then on he was getting somewhere in the range of $4,500 to $9,000 per month in total sales, more than enough to cover his the mortgage and make a nice profit. The success made him wonder why more people weren’t doing the same thing. Travelers contacted him all the time asking if he was close to places like the convention center or area hospitals, factors he hadn’t even considered.
“Unless you are in the hotel business you just don’t realize how many reasons there are to come to Dallas,” he said.
Murrell recently sold the duplex shortly after he and his partner went their separate ways. However, he would definitely consider running another Airbnb property should the right situation arise.
“If the economy ever adjusts, I think Airbnb’s might do better than hotels because they are more price effective and can accommodate more people, which consolidate their costs,” he said.
For those looking to invest in an Airbnb, Murrell cautions that there is often more work for the landlord. Unless you decide to hire help, you will have plenty of questions to answer, cleaners to schedule, and other responsibilities that require on-site attention. Of course, the experience taught Murrell how to streamline some processes. He developed a FAQ page that visitors could refer to. Since both of his units were in the same building, he could schedule cleaners and maintenance for both of them at the same time.
“I’d recommend this for anyone who would enjoy running a small business,” he said. “In a way, it’s just like running a little bed and breakfast.”
Since homes on busy streets are not as attractive to families, they can often be had for a lower price. Murrell advises potential investors to keep this in mind because busy streets don’t negatively affect an Airbnb’s viability. In fact, with many travelers wanting easy access to area attractions, it could even be seen as an advantage.
He also recommends Airbnb owners avoid renting for just one day. If you agree to someone who wants to stay on a Friday, you probably missed out on someone else who would have rented the whole weekend.
“If you are priced right you probably won’t have to worry about staying full,” he advises. “People are constantly coming here.”