TURNING THIS *TRASHED* APARTMENT INTO AN AIRBNB RENTAL!

Hey everyone, it's Mike Andes. Today I'm going to be showing you inside of this old, dilapidated 25 year old piece of junk that we're going to be turning into an Airbnb. So this is the first video of probably two or three. And I'll walk you through all the remodels and the renovations and the numbers of what we're trying to make on this Airbnb. So I have 20 units of real estate. This is the very first one that I've actually seen prior and actually been a part of the remodel, only because I live literally a couple doors down on this specific unit. But we're turning this one into an Airbnb. Typically I only rent these out for long term rentals, but I want to learn the game of Airbnb mostly just for my own education. And then we'll probably end up renting this out more of a long term basis just to reduce the amount of time and effort it takes to rent it out. So this is an old unit, as you've seen in previous videos. This is part of our 10 unit apartment complex that I got last year in October for $1.8 million. These are 10 units. So this is an end one here unit and it's a one bedroom, one bath. And this, the previous tenant lived here for 25 years. And you can see it's pretty beat up. You can actually tell here this is where their sofa was and then where their feet were always. It's literally like threadbare. So it's pretty disgusting. It smells pretty nasty. Everything is stained. You can see the popcorn ceiling is just stained and they didn't even smoke. But like just, I think, I don't know, cooking maybe, but all the staining, it's just disgusting. So we're obviously going to shred out all of this. We're going to turn this into luxury vinyl plank, nice gray modern look. We're going to upgrade, make some other upgrades in this apartment that we typically would not do if it was rental grade. We're going to go a little higher than rental grade just because it is going to be an Airbnb. And the goal is to be able to get like 3,500, $4,000 a month in rental income instead of just the regular 15, 1600 that we might get if we just rented this out as a term. So we're going to do some slightly higher grade upgrades to it and make it look a little nicer. So we're going to do some luxury vinyl plank throughout this entire place. And one thing that we decided that we are not going to do is we're going to replace the entire bathtub. That's what that, that box there is. But if I go over here to the bathroom, you can see here that instead of replacing this, because if we cut this out, who knows what we're going to find behind it. So we'll just replace the actual fixtures and then reglaze this whole thing. And we'll take out this metal frame, which is basically just right now stuck against the. The vinyl surround. So again, we don't want to overspend. And I just don't believe that spending five grand on getting rid of this and putting a new one in is going to be super beneficial. When I can spend 500, reglaze this whole thing, it look brand spanking new. And then just put nice, nicer fixtures. We'll replace the toilet, replace all of this, make it look a lot nicer. But again, this is the living room. This is kitchen. It's pretty small, but again, pretty beat up. We're going to refinish all of the cabinets, not going to tear them out. These are nice, actually relatively nice hardwood cabinets, but, you know, new handles on them, little knobs that we'll get. We'll sand them down, paint them, make it look really nice. But the really big kind of upgrade that we're doing here is quartz countertops. So definitely a great up. You're spending several thousand dollars just to do. Just to do that, but it'll make this whole place pop. The first thing when you walk in the door that you see is the kitchen. So we'll make this all quartz countertops. We'll replace the heating, but all of this will be luxury vinyl plank. Everything in this house, luxury vinyl plank. It's simple, it's easy to clean, it's bulletproof. All of this will be changed out. The sink, the range and the stove, etc. That'll be changed out in the bath of the bedroom here. The carpet actually isn't so bad in this one. It's actually not threadbare. But still going to replace it all with the luxury vinyl plank. We'll replace these shelves inside of the closet and then the whole popcorn ceiling. Typically you just want to paint it, like, not deal with it. But I'm not going to put quartz countertops and luxury vinyl plank. And they have this old popcorn ceiling. So we are going to actually take, shred all this stuff off. And when we paint everything, we're also going to not only take everything, all the popcorn off, smooth it down, texture it and then paint it. We're also going to replace all of the trim. So we'll put the nice 4 inch trim all around the edges, paint that really nicely and it'll look great. And so we got the bid back from the contractor last week and because of inflation and everything, it's just going to be extremely expensive. So we did cut some things out. Like I mentioned, the bathtub, we're not going to cut that thing out and replace it with one of these. We're just going to simply reglaze it. Also in this, in the living room here, there is no lights. It's really, really funky. And so again, this is what leads me to believe that used to be, it used to be a motel back in the day is because that's pretty common for motels. Like you don't have light, like can lights or any sort of light fixtures. You just have lamps. And so what we're going to do we were, we were going to do was put four can lights in here. But again, to drill up, do can lights, pull the wires, it's expensive, so we're not going to do that. And so by just taking out those few couple things that we are eliminating, it'll bring down the cost like six or seven thousand dollars. We are going to step up the windows as well, which again, if you're doing rental grade, you don't really need to like these are, they are metal frame. But if I change out the screen here, clean it up, look at night made it look nice, did the, we're going to redo the trim, obviously make that look good. But at the end of the day, if you're going to do all this other work in terms of quartz and luxury vinyl plank, you might as well throw in some vinyl windows. The problem is that these windows are so old that I can't get the exact sizing. So we have to do is actually order slightly smaller sizes and then we'll have to actually build out the frame slightly. So that's expensive too. But at the end of the day you can't do upgrades up to like 2022 level in terms of quartz countertops and luxury vinyl plank and nice appliances and bronze and all the rest of it and have these pieces of junk windows. So again, a little bit of an expense there, but it will also help with the energy efficiency of these units and hopefully bring down the energy price of the electric costs of the tenants by like 50, 60 bucks a month. Again though, we are doing an Airbnb on this One, the total budget for this one. Hold on to your seats. With inflation, everything, everything's like doubled cost of labor, all of the windows and materials, just crazy expensive. So our goal though is including all materials, all labor under $25,000. That includes tax and everything. In our state, you have to pay taxes on services. So it's going to look a completely different place, though. So I hope that as we go through the project, I can show it to you. I usually spend less than 10 to 15 minutes a week on real estate, probably less than five. Honestly, Liz does all of it for me. And I would highly recommend, if you're a busy business owner and this is not your primary source of income, you're trying to make passive income or you're trying to make income secondary to your business where you actually have a gross machine. I would get a property management company. It's absolutely worth it. Do not try to do it all yourself and figure out you're going to spend your Saturdays and your Sundays in the middle of the day when you should be hiring people in marketing. You're going to be trying to focus on carpets and paint and bad tenants. So it's absolutely worth it. I know it hurts your returns in the short term, but you can focus on your business and get much better returns if you're not always constantly managing tenants, et cetera. So Liz does a phenomenal job managing this place. This is going to be a great learning experience for me. And I mostly do this because I know this is a great entry point for people to get into real estate, is doing an Airbnb. And for our franchisees at Augusta Lawn Care, I really look at the next four or five years, a lot of them start becoming very profitable. They've got to start figuring out a way to be more tax efficient. And the reason that an Airbnb is a great option is because you just as a secondary house, as a ADU or accessory dwelling unit at your existing house. And what's really cool about a Airbnb and a short term rental is the fact that you could actually write things off as business expenses even if you are not a real estate professional. So typically with a real estate professional, they're the only ones who can actually write off expenses as expenses like a business if you are a professional in the industry. So I can't do that. If I remodel this as a long term rental, I cannot take 50,000, you know, say $25,000 that I put this. I cannot take that as a deduction against my taxes. I have to amortize that over the course of 25, 30 years on this property. Whereas a more professional or real estate professional could take that as an expense, take a deduction on this year's taxes, kind of go section179 if you, if you want to look at it like that. So what's cool about an Airbnb is everything I put in this, I can take on this year's taxes as an expense because it's a business. And so that's a great option for someone that I know down the road. Our franchisee, like, oh my word, I'm going to get stuck with this massive tax bill and I only have two months to be able to figure something out. And I don't want to go buy an equipment. Well, go buy a piece of real estate like this and then fix it up. And that year you can take as an expense if you business expense it because it's a short term rental. So obviously you talk to a CPA about that, but it's definitely something that we're, I'm trying to learn right now. So that way down the road, everyone at Gusta Nation can take advantage of it. So obviously like these blinds, these are trash. That window gonna take out. Redo all the floor, base baseboards and the edging of this wall, so much better. Replace the doors, replace all the fixtures. It's gonna look like a brand new place once we're done with it. So hopefully stick around and hopefully the next couple of months can show you what we do to it and the numbers behind it. Our goal is to get like 120, $130 per night. And because we're close to the hospital, like two minutes away from here, it's going to be, I feel like a really good Airbnb in a short term rental, so stay tuned.