Welcome back! I have been talking about all the steps we need to take in order to leave our jobs and travel the open road in an RV. One of the big obstacles is we want to do this at a time when our youngest leaves for college! I have been wondering how the heck we are going to swing that!
Well, the good news is one of our puzzle pieces just fell into place! I told you, right? Take a step, and the next step will appear!
So, we have found this little duplex for him to live in next year. At first glance, we saw the rent on one side will pay for the mortgages/taxes and insurance! Free rent for him! This will save us approximately $7,000 on the year. The side that is rented is already rehabbed and looks nice on the inside. The side that is to be our son’s needs new flooring, paint, some updates to the kitchen and bath. So, his side will not be available until maybe the end of October, and we weren’t sure we wanted to bother with giving someone a shorter than a year long lease. We certainly will miss the student rush.
We decided, let’s look into Airbnb! Based on the location and that it’s walking distance to the football stadium (Go Mountaineers!) it looks like we can probably make an average of $1000 above what we could just by renting it traditionally. So, the period before he moves in will give us in the ballpark of a $10,000 nest egg for expenses.
As I mentioned in prior posts, based on the scholarship programs in our state, I imagine our portion of tuition will be about $3000-$4000 a year. Rent is now covered free and clear other than an occasional vacancy. We generally budget for 10% vacancy rate.
So, let’s break down expenses:
Rent (10% vacancy rate) $100 monthly/$1200 yearly
Tuition $330 monthly/$4000 yearly
Grocery/Food $400 monthly/$4800 yearly
Utilities (Including cable/internet) $250 monthly/$3000 yearly
Books $116 monthly/$1400 yearly
This gives us an expense of roughly of $1,200 monthly/$14,350 yearly. I am going to add 10% to that number because he will have medical costs, car maintenance, parking, etc. He will pay his own car insurance and gas, but we will own the vehicle. Total comes to $1,320 monthly/$15,785 yearly.
And we want to quit our jobs and travel. No sweat, right? *Nervous laughter*
So, what if we went ahead and started to Airbnb the other unit instead of traditionally renting it? I just told you that we should already have a running start of about $10,000 from doing that in his unit while he finishes high school.
So, the unit next door yielding an average of about $1000 over the rent now becomes $1000 monthly/$12,000 yearly income towards his college. This leaves $320 monthly/$3,840 yearly. Now, normally you would think that other $10,000 we made before he even left for school could be used for that, but there will be maintenance on the building that we should just put that away for. It will have a new roof, but we could get stuck with a furnace or an air conditioner, plumbing issues, etc. So, I think we will be best to say that money doesn’t factor in at all.
Still, we brought our four year expense of $70,140 down to $15,360. (I added back the $7,000 we are saving on rent) We are on-our-way to making that happen! (Pun totally intended)
Some of this is still speculative of course, but we will have this year to see if we really can make that much more income by using it as an Airbnb. Our research says this is more than reasonable, but I always want to see it before I believe it!
Still, this has started us down another line of thinking…if we can do that well there, we have other apartments we could do this with. So, we are going to also try one in the area we live. We will get this all started, get the processes in place, and if it works well for us…I think we just found where the rest of the college money comes from. And, I think we also found a potential lead on something that could potentially replace our income and give us the freedom we are looking for. We are doing a lot of education on it at the moment, and are encouraged with what we are learning.
So, to recap….we found this duplex because we bid on a house. We figured out the Airbnb because we had to solve the problem of the unit being empty. The results of that step has given us our next step. See how that works? If we stay rooted in fear, we do not move forward. If we think we something won’t work because there are obstacles, that’s just fear talking! Solve the problems you encounter along the way and they can also enrich your knowledge. I am very excited about the possibilities that we now see and feel encouraged we are getting that nudge to step out and make this dream a reality! And soon!
Have you ever house hacked? Done an Airbnb? What were your results?