How some retirees are making extra income with short-term rentals
By Kerri Fivecoat-Campbell
You can earn money in retirement putting your home or second home up as a short-term rental, if you do it right. Here are some tips.
This article is reprinted by permission from NextAvenue.org.
When my husband died in 2018 at age 57, I knew I was going to have to do something to make up for the savings he would have contributed to our IRA.
This year, when inflation skyrocketed, I not only needed additional income if I hoped to eventually retire, but I also needed additional money to maintain my standard of living.
I decided to transform a stand-alone cabin on my property in the Ozark Mountains from my writing studio into a short-term rental.
It turns out that I'm not alone in trying to turn property into income.
Living off the land
"Against the backdrop of a rising cost of living, people of all ages and backgrounds are turning to hosting," says Liz DeBold Fusco, an Airbnb (ABNB) executive. She added that her company noted an increase in the number of new hosts 50 and over in countries with higher inflation.
Along with competitors such as Flipkey, Vacasa (VCSA) and VRBO, Airbnb is one of many short-term rental companies that offer platforms where travelers can find hosts with rooms to spare.
"More and more, adults over 60 would rather age in place in their current home or neighborhood, but as people live longer, stretching their savings even further into retirement can get difficult," Fusco says. "Airbnb gives them the opportunity to earn extra income, which helps cover housing costs and the overall rising cost of living."
Related:Dear Tax Guy: I just started renting my house out on Airbnb. What income-tax deductions can I claim on this property?
Make a business of it
Mari Ascherin, 58, lives on 5 acres of land near Custer, South Dakota, and has views of Custer State Park. After her husband, Mark, died unexpectedly in 2019, she went on a camping trip to visit friends who had listed some of their property as a short-term rental. Ascherin was living in the 850-square foot cabin on her property while finishing a larger home she and Mark began building.
Given her proximity to a popular state park, she decided to live in her camper during the summer and list the cabin as a short-term rental. She also took a class on small-business management, which included a section on marketing. While doing market research on short-term rentals in her area she realized that few rentals offered dog-friendly accommodations.
"I decided being dog-friendly would be my niche," says Ascherin, who already had almost an acre of land fenced for her own dogs. The fenced area also includes heated kennels--a bonus during long, cold South Dakota winters.
"I had such a great response," says Ascherin. "There were dozens of inquiries the first day I listed."
The first two years were so successful with the cabin, she decided to live in the camper this past summer and also rent out the larger home, which was built to allow Ascherin to age in place.
The plan proved so profitable, Ascherin will reach her goal of retiring early at 59 1/2 .
See: Most Americans want to retire just 10 years early. Here are 5 steps to making that happen
Location: Important, not imperative
Tim Rosolio, vice president of vacation rental partner success for Expedia Group (EXPE), which owns VRBO, says location is important when deciding if you have a viable short-term rental property.
"If you're in a lake community, the closer to the water the better," he says. "Look for comparative properties for how many there are, pricing and the number of reviews in your area."
While being in a vacation or resort destination, as Ascherin is, can certainly determine whether your short-term rental will be booked months in advance, as hers is, Fusco says Airbnb is seeing people stay in less-traveled destinations more frequently.
"People travel for so many different reasons beyond vacations," Fusco says. "They might be looking for a place to stay near family, traveling for a graduation, or booking a stopover on a road trip.
"Ultimately," she adds, "what so many travelers value is localized experience guided by a host who knows the space and area best, and that's true no matter where you live."
Also read:This couple traded their house for an RV and paid off $200,000 in debt -- then the money started rolling in
Tips for people new to short-term rentals:
Read next:6 ways retirees can bring in extra income
I listed my property just before Labor Day; since it is on a lake in a summer resort area, I knew my bookings would be slow until next summer. I hope 2023 brings people to my property and helps secure my financial future.
Kerri Fivecoat-Campbell is a full-time freelance writer and author living in the Ozark Mountains. She is the founder and administrator for the public Facebook page, Years of Light: Living Large in Widowhood and a private Facebook group, Finding Myself After Losing My Spouse, dedicated to helping widows/widowers move forward.
This article is reprinted by permission from NextAvenue.org, (c)2023 Twin Cities Public Television, Inc. All rights reserved.
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