Friday, October 28, 2016

How much money can you squeeze out of an “Airbnb Cash Cow” in Echo Park?


Echo Park News Sponsor
Masa of Echo Park

Eastside PropertyECHO PARK — Forget about buying this three-unit property to live in or to rent out to tenants. Instead, this property at the corner of Berkeley Avenue and Mohawk Street is being promoted as an “Airbnb Cash Cow” with the potential to generate more than $200,000 a year from visiting guests, according to the LoopNet listing.

Priced at $1.395 million, the pitch for the property claims:

Currently each 1 BR guest unit is vacant only a few days per month. Essentially, a “turn-key” Airbnb business complete with website and wonderful on-line reviews. Located close to downtown and the hippest dining, shopping and nightlife of Silver Lake.

Assuming the units are booked solid for the month, the landlord/innkeeper stands to make between $3,750 for a one-bedroom unit and more than $9,000 a month for the main house, according to the listing. At at those rates, who would rent to a long-term tenant?

A pro-labor group is blaming AirBnb for magnifying the city’s shortage of affordable housing by removing rental apartments from the market “in order to let tourists use them,” says the L.A. Weekly.

Eastsider Advertising


  1. Yeah, it’s not like we have a housing crisis or anything. It’s greed run amok, unchecked by the local government we put together ostensibly to fend for the community’s greater interests, and society pays the price.

  2. Berkley and Mohawk…not exactly the hippest 3 block radius right there. A 10 minute walk to Mohawk bend. But why pay so much for an Air BnB…and who would ever think that it would be fully occupied all the time? No hotel ever is.
    And then add to the cleaning, administration and other costs, with a more practical 40-50% occupancy (which is optimistic; I’m sure its often empty mid-week), plus the fact that it is far from airports (why travel to LA for a week to spend it by the Glendale / 2 freeway interchange?).
    Those numbers are wildly optimistic…

    • Actually, I live in an even less “cool” spot in Echo Park and am generally booked at 90% with my Airbnb, really could be at 100% if we weren’t so selective. You are absolutely right about administrative and cleaning costs, though- plus if you’re renting out for less than 30 days the city is getting very serious about collecting the hotel occupancy tax,so subtract another 14% from that cash cow. And good luck figuring out which other taxes you’ll need to pay. We report ours as rental income but the form that Airbnb sends to hosts & the IRS generally applies to businesses rather than landlords, and accountants don’t know what to make of it. Especially in a situation like this, the owners also need a business license, to pay LA city business tax. Oh, and no homeowners insurance I can find will cover the space if it’s being rented out short-term. Hosts have to put a tremendous amount of trust into the Airbnb guarantees because that’s the only compensation they’ll get if a guest lights a candle and burns down the cottage. Also- that 100% occupancy can take a nosedive if you get a lousy review or two. And when you’re dealing with that volume of turnover, you’re bound to get some unfair guests in the mix, even vetting your best to weed out the grouchy ones.

      • Thank you Echo Joe for some reason among the nutty anti-profit folks who seem to be all over the f…ing place. While they hate profit, they sure like and love benefits that profits can bring.

        But, I do have to ask you, what is the definition of this silly word “cool”? Don’t you agree that it is a very silly word that should have been retired in 12th grade?

      • Echo Joe:
        Interesting information on your experiences; since you are selective, who are the ABnBers who come to our fair Eastside?
        Are these people renting for two weeks and just looking to spend some time in the City? Visiting relations? I suppose there are some folks that actually prefer a nice quiet street, and since it is LA…they just planned on driving everywhere anyway.

        • Many, probably the majority of our guests have been older couples who have adult children that live in the neighborhood but don’t have room to host mom and dad. New grandbabies or nieces and nephews are a big draw to the neighborhood. At the moment they have very few options if they want to stay within 5 or 10 minutes drive away. We have also hosted lots of people here on work assignments – documentarians, screenwriters, performers, doctors here for 1-3 month stints. And we’re just 15 minutes from the utterly pleasant Burbank airport, it’s not all that remote!

  3. If cash flow is that good, I’m curious why it’s for sale.

  4. Listing here: https://www.redfin.com/CA/Los-Angeles/2302-Berkeley-Ave-90026/home/7057979

    the buyer is in for a surprise…zimas shows 2100sf of living area, listing shows 3100sf. LADBS shows no permit activity so either the square footage in the listing is over by 1000sf or there’s unpermitted space.

    From the description it sounds like there are two detached units in addition to the house. Zimas shows 2 buildings, the main house and a 270sf detached building that I’d guess has no kitchen, so its not really rentable as an apartment. I’d guess that’s the little building shown in the pictures with the french doors.

    as for the other unit, they must have converted some or all of the garage illegally. That’s the only other structure on the property.

    usually the listing will have the assessor’s square footage and in the description talk about bonus space. plus all the airbnb stuff. I guess agents can make whatever false representations they want without getting sued.

    • I think the only reason there’s all that airbnb stuff in the listing is because the property can’t be sold as a legal triplex.

  5. It’s an interesting business proposition, but why pay that much to get into that business when there are probably quite a few similar such houses priced at “normal residence” prices at any given time?

  6. airbnb is a natural and healthy reaction to the shortage of (bedbug free) hotels in silverlake/echo park. and LOL at “pro-labor” groups.

  7. Oh BS on the labor board accusations! The majority of these Air B&B rentals would have never been month to month because they don’t have their own dedicated bath or kitchen. Does everything rental related have to be politicized or do we eventually just throw our hands up and admit that we have too many people that want to live and visit here because of our “optimal weather” and stop greed shaming people who want to rent their rec room out!

    • >> The majority of these Air B&B rentals would have never been month to month because they don’t have their own dedicated bath or kitchen. <<

      Totally untrue for Echo Park/Silverlake. Look on the site. Almost all are dedicated apartments or homes.

    • Thank you Garol. People on the eastside (meaning those west of the river…) love to bellyache about anyone, who isn’t brown, making money.

  8. “Air B&B Cash Cow” is a euphamism meaning “weird multi-unit property we can’t sell”

  9. Puleeze! people reacting to this need to wise up. Why would anyone sell a cash cow. These claims are clearly an exaggerated marketing ploy.

  10. I have a bridge in brooklyn for sale!

  11. It is illegal to have a short term rentals in a residential zone. Airbnb is breaking that law in pretty much every instance. And the city does nothing about it. In fact, our mayor is stupid enough and shallow enough to think that simply because it is done over the Internet, it is a good idea.

    A residential zone cannot host any rental terms of less than 30 days at a time, monthly. Thii is designed to make for neighborhoods that actually can have neighborliness. Airbnb is running a motel operation, and that belongs only in zones for motels, in commercial zones.

    I have no problem with Airbnb – except for it placing nearly all of its tenancy in illegal zones. And, that the people doing this are not meeting the requirements for running a motel, such as licencing, insurance, someone in place 24/7, paying bed taxes, paying business, etc.

    • friendly tuxedo cat

      It’s sleazy, greedy, and a big *uck you to the neighbors to convert a private home on a quiet street into a motel filled with drunk tourists.

  12. A lot of people who use the sublets, airbnb are artists that like to stay in the supposed “artist friendly” community close to recording studios, galleries, etc. I’m sure all the yuppies doing yogalates and strolling carriages are the ones complaining..you guys get out!

    • Zoplay, perhaps you are resentful of people with a career? Where are all these “artists” you speak of? Or do you mean the unemployed, skill-less and tatted who simply rent a room somewhere in 90026? And do you have a problem with couples having kids? Or do you just have a problem with professional and educated people having kids? Should those people be relegated to the Valley so you can make fun of them because they live in the Valley?

      • What about us working artists (with tattoos) who have lived here for decades and created careers for ourselves here in EP? Not all of us are losers!

        • You’re right, not all. But a lot. There are lots of people posing as artists, who can’t point to anything they’ve done that could be considered anything above “craft” level. Certainly not to the level of art. There is very little true art, at least by my standards. I admit there is a LOT of craftwork out there. I didn’t mean to disparage you at all. However, I really don’t get the tattoo thing at all. It seems people get them to fit in so they can conform to the group that says they’re non-conformists. But anyway, that’s a whole other discussion.

          • Tattoos are to make up for the lack of attention you received from daddy. On women, sometimes it manifests itself by grabbing a brass pole (and/or tatts) on men, it’s “love me daddy”.

  13. The city needs to regulate Air BnB. There are taxes that should be paid and they are breaking the law in residential

  14. The fact that some realtor is shamelessly touting this property as an “Airbnb cash cow” underscores how desperately we need the city to put some rules in place about short-term rentals. This is a business being run in a residential neighborhood (and have they been paying their city taxes?) — in clear violation of the zoning code — yet the realtor has no qualms about listing the business potential because he or she knows the city isn’t going to do anything.

    I’m not opposed to someone occasionally renting out a room, or house. It can be a wonderful way to meet people from all over, and, for visitors, offers up a different look at the city. While Echo Park and Silver Lake most definitely need a few hotels, the answer isn’t to take potential rental units off the market — as the way this property is being marketed . There are commercial zones in the area — Sunset, Alvarado, Glendale — much better suited for this type of business.

    Moreover, I think if a residential area is going to be essentially turned into a commercial zone, then the people who live there should get a say-so. I, for one, don’t want to see a hotel operating in my neighborhood. Even if I don’t know all my neighbors, it’s good to see familiar faces — not people just coming in for a few days. That makes it less a neighborhood. Not that the people who stay at these place are bad folks or any such, but they’re not invested in the neighborhood.

    We’re all still figuring our way through this new economy — we need to find common-sense solutions that balance out everyone’s rights.

    Dave — I checked out the place a few years back when there was an open house. As I recall, the main building contains a four-bedroom house and a one-bedroom apartment, and there is a studio (I think, could be one-bedroom) next to the garage.

    • so just to be clear, you want MORE rules created from a city who’s rules have created this housing shortage and hotel shortage in the first place? Talk about misplaced trust.

Post a Comment

Please keep your comments civil and on topic and refrain from personal attacks. The moderator reserves the right to edit or delete any comments. The Eastsider's Terms of Use and Privacy Policy apply to comments submitted by readers. Required fields are marked *