Midwestern vacationers who want to avoid air travel and hotels are increasingly choosing car trips to nearby destinations during the coronavirus pandemic, hospitality industry experts say.
An Airbnb report released in January found that more than a third of vacationers want to travel this year to reconnect with friends and family, and that more than half preferred a domestic or local destination. Vrbo had similar results in its 2021 travel report.
The trend has created a business opportunity for northeast Indiana residents who own property and are willing to host guests who sign up through short-term lease companies including Airbnb and Vrbo, which is short for Vacation Rental By Owner.
The property owners say it's a lot of work but pays off for them and the wider community.
Seth and Krista Anderson were ahead of the curve.
The Huntington couple have three listings on Airbnb and are preparing to add a fourth. They registered their first property in 2017.
It all started after they spent a weekend in Chicago. They rented an Airbnb for $150 or $160 a night, which they considered a bargain.
The Andersons learned the apartment owner would stay those nights with a friend or get a cheap hotel outside Chicago for about $50 a night. She used the profit to help cover her living expenses.
“I had an apartment that I couldn't rent. Well, I could rent it, but I couldn't keep tenants for very long,” Seth Anderson, 44, said about a Columbia City property.
He listed the apartment but blocked out the first 10 days to renters to allow him to spruce up the place. The night before the apartment became available, they received a reservation for that first night. That was in October 2017.
“It pretty much took off from there,” he added.
In December 2018, they added the second location, which is in Huntington. In October 2019, they added a second Columbia City location. And they recently closed on another Huntington property.
The Andersons look for longer-term tenants for the Columbia City properties – 30 days or longer. Otherwise, keeping up with cleaning four rentals in two cities would be too much with Seth Anderson's full-time job as a senior product test engineer at BAE Systems.
Sometimes, he said, it feels more like owning a cleaning company than owning real estate.
Dean and Norma Jean Walker live on High Lake in Albion. Their rental is a lake-front property “right next door.”
The retired couple, who are in their 60s, bought the property when it became available, thinking their kids could stay in it when they visit.
They signed up with Airbnb in 2018 after finding short-term renters by word of mouth for three years.
“Airbnb is 100% better” than trying to do it on their own, Norma Jean Walker said. All renters have their personal information on record with Airbnb, so she feels protected in case of property damage or other issues.
The Walkers purposely keep prices relatively modest, charging $48 a night during the week and $60 a night for holiday weekends.
“We love to see people coming in with the kids to have a lake experience without breaking the bank,” Norma Jean Walker said.
Dean Walker handles handyman issues that come up, and the couple are nearby to answer renters' questions.
“People are looking for a quick place to go. They just want to get out for the weekend,” she said.
The Walkers have rented to guests from Fort Wayne, but customers come from across the country. The couple have hosted international visitors from Australia and Great Britain.
The lakeside location has five stars on the website, and the Walkers are considered a “superhost,” meaning they exceed Airbnb's basic requirements in cleanliness and other categories.
The lake house is totally booked from April through July and recently had only two days open in August.
Brent and Keishia Mckillip live with their three children on 27 acres in rural Lagro in Wabash County. He wanted land to hunt on, and she wanted “to do things with horses.”
The Mckillips, who also own a farm equipment business, have turned short-term rentals into a second business.
“I ended up just deciding this would be another form of income to support this property,” Keishia Mckillip said.
A 15-foot round grain bin was given to her three years ago, and last year she decided to transform it into a short-term rental dubbed The Bunkhouse at Love's Hideaway.
Keishia Mckillip did some of the work herself and hired help for the stairs. It took eight weeks to finish the remodel. They joined Airbnb in August.
The grain bin can accommodate two people in two beds and is pet friendly. The price is $69 a night plus tax on weekdays and $80 plus tax on Friday and Saturday nights
Brent Mckillip, 37, gave his wife a small log cabin styled after a trendy tiny house, so they listed it, too.
The tiny cabin can accommodate up to seven people in four beds. The price is $96 plus tax on weekdays and $125 plus tax on Friday and Saturday nights.
The properties are booked steadily, Keishia Mckillip said. The couple have hosted guests from almost every state. The grain bin was recently occupied by a couple who were house hunting in preparation for their move from Texas.
The Mckillips keep a guestbook in the grain bin and ask guests to share memories from their visit.
“There was one guy who brought his girlfriend, and he proposed to her,” she said.
Keishia Mckillip, 34, knows her short-term rentals are unusual properties, but she's still amazed that people seek them out.
“I'm literally in the middle of Wabash County,” she said, “in the middle of nowhere.”
Voice of experience
Seth Anderson, who owns Airbnb properties in Huntington and Columbia City, said attracting short-term rentals and making a profit at it depends on supply and demand.
“I caution people to say it's a good investment, but as soon as too many people do it, it's not a good investment,” he said.
He tracks the competition and has noticed one previous listing in Roanoke and one in Huntington no longer appear on Airbnb.
Competition isn't the only obstacle. The couple had about $7,000 worth of cancellations between three properties during the pandemic.
And then there's the quality of the renters. Most customers are great, Seth Anderson said, but one was arrested outside Anderson's property for meth and paraphernalia possession.
Occasionally, a guest will do damage and try to hide it. That happened recently with a storm door that Anderson was able to repair. It helps to be handy so you can fix problems quickly and cheaply, he said.
“Sometimes people put a hole in the wall, and you've got six hours before the next guest arrives,” Anderson said, adding it might cost $250 to get a professional there on an emergency basis.
It's important to get into the property right after guests leave to have enough time to deal with any issues, he said.
A property's ability to attract a paying guest also relies on whether it offers something unique, Anderson said. The Huntington property has a hot tub, which has been a draw.
But, Anderson added, “it definitely adds to the maintenance of it.”
Adjusting the chemicals is almost a daily requirement, he said. It's difficult to hire someone to check the hot tub or do daily cleaning because if you pay the person enough to make them take the responsibility seriously, then you're not going to make much money, he said.
The Andersons rent out their first Huntington property for $85 to $90 a night, plus the $15 cleaning fee, with a two- or three-night minimum stay. It accommodates up to four people, but usually only two stay.
Their Columbia City property is $1,200 a month for up to four occupants, he said. Previous tenants have included traveling nurses, couples between houses and construction managers on short-term jobs.
The Andersons have two kids – ages 19 and 16 – who help with cleaning after guests leave. But some customers leave the place in non-PG-13 condition.
“Sometimes it looks like people got busy in the grass before getting into the hot tub,” Seth Anderson said, adding that he has found grass, twigs and gravel in the water. “It's like, what are you doing?”
One aspect of short-term rental that can be overlooked is the benefit to the community, Anderson said.
His Airbnb customers shop in Huntington at Antiquology, go to Two-EE's Winery and eat at local restaurants. Many people look for a destination within two or three hours of home, he said.
“We're bringing those dollars into this community and helping support a wider array of businesses than just ours,” he added.
Anderson said communities that restrict Airbnbs overlook that economic impact.
Norma Jean Walker agreed that the Albion area benefits from her short-term rental.
The property is near Chain O' Lakes State Park, which consists of nine connecting lakes and offers boat rentals and hiking trails. Crooked Lake, Loon Lake and Bear Lake are also nearby. Shipshewana and its Amish-owned shops are an easy drive.
She puts a folder of local attractions in the lake house, including information about restaurants and Marlow's Pizza, the only eatery that delivers to their address.
“So I feel like I'm helping the local economy as well” by attracting people to the area, she said. “They're going to eat out.”
When to buy
Here are some key things to consider before buying a second property:
• Make sure you know what you can afford. Factor in potential rental income as you think about your mortgage payments, but remember lenders usually won't take that into account unless you have a signed, long-term lease.
• Familiarize yourself with the area where you want to buy. It's good to know what the local real estate market is like and what the top attractions are. The closer your property is to those, the better.
• If you plan to use it for short-term rentals, make sure the property has enough space for visitors and a versatile layout. And make sure local regulations support your plans. Buying a vacation home you plan to rent isn't the same as buying it for yourself. The property needs to feel comfortable for lots of different people.