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House Hack: A term used when you live in a home of some kind (duplex, triplex, single-family home, etc.) and rent a portion of your home out. In this way, your mortgage is being paid by renters and you still have a place to live!
As a kid, Mike saw his parents blow through insurance settlement money, but they made one good investment: a mobile home park. Real estate investing stayed in the back of Mike’s head and he even got a degree in real estate in college.
After graduating from college, Mike traveled through Asia and became a dive instructor. He visa-hopped around countries and met his wife in Malaysia before they moved back to the states. Investing in real estate came back to Mike’s mind when the couple moved to the Houston area and saw affordable prices for homes.
After working as a teacher for two years, Mike found a house in need of rehab in the Third Ward, a dangerous neighborhood outside Houston that was being to be gentrified. Older but cute homes lined the streets and the prime location had Mike thinking this would be the perfect spot for an Airbnb.
Mike secured a loan for the home and for the needed rehab to fix up his new home into something that would attract short-term renters. But Mike made mistake after mistake with this rehab:
- There was a squatter living in the house who had to be paid to leave!
- They chose the cheapest contractor.
- They left the country during the renovation.
- No city permits were pulled for the renovation.
- They were robbed—twice.
And then Hurricane Harvey hit. All the good contractors were snatched up and they were stuck living in a house with no heat or lights and a single electrical outlet.
In this podcast episode, Mike shares all of the crazy mistakes he made in starting his first rental property. Listening to his stories was almost enough to scare me off of ever renovating a house for Airbnb…until he gets his listing up. If you’ve ever thought about managing multiple rent houses or renting on Airbnb, this episode is a must-listen.
What else we talk about in this episode:
- The process for buying and prepping Mike’s first Airbnb
- How your debt-to-income ratio affects your mortgage
- How his property performed on Airbnb
- How quickly Mike started new Airbnb listings after the success of his first one
- Adding RVs to Airbnb
- Automating processes so Mike can RV (resources for this linked below)
- Figuring out the demand before buying property
Links mentioned in this episode:
Check out Mike’s Airbnb listings here. Want to get in touch with Mike? Email him at [email protected] or follow him on Instagram @mikecotroneo.