One key retirement question revolves around housing.
Where will you live? Will you stay where you are or move? If moving, within the same city or elsewhere? And what type of house?
We have been considering these questions as it seems absurd to have two of us and a cat live in a 3,600 square foot house.
As of now, our two kids, my son-in-law, and my daughter’s four cats are in the house and it feels barely big enough.
But eventually, they will all move out and it will just be me, my wife, and Zeus.
As we’ve been chatting about possible options, one question intrigues me: is there a way I could sell the house, invest the proceeds, and have them more than pay for us living somewhere else?
If we could do this, we would unlock the earning capability of a large, non-producing asset and potentially have extra income left over (not that we need it, but the concept does appeal to my financial sensibilities).
We could then move into a rental (apartment or house) or even live a somewhat nomadic lifestyle, spending three months here, a couple months, there, etc. We could see the US and avoid all undesirable weather.
Now whether we’d want to do this or not is up for debate, but it makes an interesting idea to consider.
Running the Numbers
The subject came up recently in the Millionaire Money Mentors forums and I responded with this:
Personally my thoughts have wondered to the return I’m getting on my home and if I could/should sell it, invest the proceeds, and live a nomad life in Airbnb’s.
The quick, rough math would look like this:
- House sells for $450k after realtor’s fees
- I invest the $450k at 7% (I could get private loans at 10% or some syndication deals at higher than 7%, but let’s be conservative.)
- 7% earns me $31.5k per year.
- In addition, I save roughly $8k a year on housing expenses – taxes, utilities, insurance, maintenance, etc.
So now I have $40k a year to spend on rent and break even. You can deduct some for house appreciation but I’ve about broken even over time on selling houses (some up, some down) so I wouldn’t bank too much on appreciation.
It gets even better if I could earn more than 7%…
Of course there are a whole host of non-financial issues associated with this sort of change – lifestyle, flexibility, etc. that are hard to account for. But for now let’s just focus on the concept and see if it’s plausible. I’ll probably post more on this at a later time including thoughts on logistics (like how do you downsize from a 3,600 house to only stuff that’s mobile-friendly?)
The question then remained — could I get an apartment for less than $40k a year? I think I could (and likely have a good amount left over). But what if I wanted to be more flexible and live the nomadic life? Could I rent Airbnbs/VRBOs for the same as an apartment?
On the plus side, I thought I might be able to since 1) Covid has probably lowered demand (and thus prices) and 2) if we were staying long-term I could likely negotiate a preferred rate.
On the negative side, aren’t places like this (i.e. hotel rooms) ALWAYS more expensive than renting a comparable place in the same area? After all, you should get some break for committing to a year lease, right?
Around this time I saw some comments on Twitter from A Purple Life. She had been living in Airbnbs and made a comment something along the lines of “they cost the same as renting.” She also lived in Seattle, a high cost-of-living city, so her experience seemed very valuable.
I contacted her, asked if she would document her experiences for us, and that’s what we have below.
With that said, let me turn it over to A Purple Life and her thoughts on how to live in Airbnbs for the same price as renting an apartment…
In 2015 I started to pursue financial independence with the goal of retiring in 10 years at the age of 35. However, through job hopping and domestic geo-arbitrage I was able to cut that timeline down to a little over 5 years.
As I went through my journey I cut my spending without decreasing my standard of living by moving from Manhattan to Seattle. I also used a sad truth about the marketing industry (that the only way to increase your salary substantially is to job hop) to my advantage and almost doubled my salary during this time as well.
As a result, I retired in 2020 at the age of 30. One of the main reasons I was able to do so was because I discovered some shocking truths about the US short-term rental market. With the rise of services like Airbnb and hosts wishing to have longer term guests and less turnover, it is possible to find monthly Airbnb rentals for the same price as your annual lease!
So let’s dive into how I discovered this, what prices I aim for within a city and how to ensure you get a great deal.
What Is Airbnb?
In case you haven’t heard of Airbnb before, they are a short-term rental platform that allows people who own properties or spaces to rent them out to the public. You can choose from renting entire houses (my preference) to just a room in highly desirable locations.
Airbnb provides an online platform you can use to assess potential places to stay and includes verification of the host’s information and reviews of their property by previous guests. In case anything goes wrong, Airbnb is there to help and can find you a new place to stay at no cost to you. Luckily, I haven’t had to use this option myself yet, but I have heard that their customer service is very quick and helpful in these emergency situations.
The Local Airbnb Experiment
My retirement dream was to be a global nomad who moves every 1-3 months across the country and the globe. According to other nomadic retirees the way to do that while keeping a tight grip on your budget is to rent an Airbnb. But, of course I don’t just take people at their word. In order to prepare for this life change my partner and I decided to test this theory out ourselves.
As I mentioned, we moved to Seattle in order to have an even better life than we did in NYC for less money. After the move we were curious if it would be possible to find a monthly Airbnb rental for the same cost as the average price of our Seattle apartment plus utilities (since utility costs are included in Airbnb prices). And I’m happy to report that we succeeded!
Our apartment in Seattle was in an older building, had a little less than 700 square feet and included a coin-operated laundry machine in the building that we shared with the other units.
We rented this space for $1,790 a month. After adding in the cost of our utilities (electric, water, sewage, gas and WiFi) our costs came to about $2,000 a month. That’s the baseline we used to determine our ideal monthly Airbnb cost going forward in the same city.
Our first Airbnb in Seattle was in an even nicer location than our apartment. It was the lower level of a house, about 800 square feet and was located on a quiet street in a picturesque neighborhood. It had an outdoor area, a jet bathtub and an in-unit washer and dryer. That combined with a luxurious bed made us feel like we were living the high life.
The apartment was also walking distance to a lake with a gorgeous view of downtown Seattle and two blocks away from a main drag that had grocery stores, pharmacies, ice cream shops and anything else our heart desired. It was a very sweet setup and this Airbnb cost $1,904 a month.
Our second Airbnb was also about 800 square feet, located in a different quiet neighborhood and was a part of a converted barn that shared a wall with only one other person. It felt like our own little house with a porch and a yard.
In addition, there was a washer and dryer unit by our porch and a TV that came with all of the host’s streaming logins to Netflix, Hulu, Amazon Prime, HBO, Disney+ – you name it. This Airbnb cost $1,956 a month.
I wrote about my experiences in our first two local Airbnbs more in depth here if you’re interested, but if you just want the hard facts of how we were able to find short-term rentals that rivaled our annual lease costs, here are the details:
How to Find Reasonably Priced Airbnbs
There are just a couple steps needed to get a great price on an Airbnb.
Keep Your Finger on the Pulse and Book in Advance
I have always loved planning travel in advance – any type of travel, from plane tickets to Airbnbs to moving trucks. Doing so usually allows me to get a better deal. For example, when we lived in NYC we knew our lease was up that summer and that we wanted to move to Seattle.
So I started talking to moving companies in January and learned that they have completely different winter and summer pricing in NYC. I also learned that I could lock in the winter price, which was almost half of summer price, if I booked during the winter. So I did it! I booked our July moving truck in January and saved thousands of dollars.
My experience booking Airbnbs has been similar. I started looking for our monthly August and September Airbnbs in December. I would check in to see what was available on Airbnb during those months every weekend. So when I saw what I knew to be a great deal pop up in January I immediately jumped on it and booked that apartment for August.
I did the same in February for our September Airbnb. As you can see these months I booked these apartments were before COVID hit the US and basically shut down travel so our costs were not artificially lower because of the pandemic.
Look for Steep Monthly Discounts
Many Airbnbs discount their price 40-50% if you book monthly, which can obviously make a huge difference in your total cost. Airbnb also has a feature that allows you to search for accommodations within the entire month you selected so you can see what the monthly prices would be comparatively across different apartments (example below).
This helped me know the total cost of each location including all taxes and fees before selecting our chosen accommodations.
In contrast, you can usually only see the nightly cost before taxes and fees.
In addition to existing discounts, I have also been told that it’s possible to ask for additional discounts from a host before booking. I have yet to do that myself, but I have been told by my full-time nomad buddies that it’s possible and not insulting to try and ask for a reduced price if you’re staying a long time. So I might try that in the future to see if I can further decrease costs.
How To Determine Your Ideal Monthly Airbnb Cost
When I explained on my blog that my costs while living in an annually leased apartment and a monthly Airbnb were similar, people were understandably a little skeptical. How was that possible? Was I living in dilapidated Airbnbs?
No – they had nicer amenities than our apartment and outdoor space in quieter neighborhoods.
Were the two Airbnbs we stayed in outliers with costs that couldn’t be replicated?
I didn’t have hard facts on that, but I imagined our experience couldn’t be a total outlier so I went to investigate.
Numbeo is a fantastic website that crowdsources pricing information for cities all over the world and I love to use it to understand various costs in different parts of the globe.
Looking at Numbeo, the average cost for a Seattle apartment is $2,171.36 with a reported rent range of $1,700 to $2,725.
Our rent was $1,790, which is obviously closer to the lower end of the range. Adding our average utilities cost on top of that totaled about $2,000 a month so that was our goal when looking for monthly Airbnbs in Seattle.
That’s how we determined our goal Airbnb cost (by setting our baseline as our cost of living in Seattle), but it’s completely possible to use averages from an area you’re not familiar with to determine what would be an ideal monthly Airbnb cost. You can then input that price into your Airbnb search as an upper cost limit to help find your next Airbnb.
In addition to helping me understand average rental prices in Seattle, I have also used Numbeo to compare my current city to one I’m visiting to set my overall expectations for cost. This can help you get a more comprehensive view of how costs could be different in a new city you’re about to visit.
For example, in 2018 I visited Singapore and wanted to have an idea of what I should budget for food. Compared to Seattle, takeout food in Singapore is generally cheaper, but beer for example is much more expensive. Knowing this kind of information in advance allowed me to budget accurately and set my expectations accordingly.
I also used Numbeo when researching where we should move from Manhattan so I understood all the average costs involved in a new location. It’s a great resource for international and domestic pricing information that allows you to plan for your overall monthly costs since accommodation prices are not the entire picture.
Another way to ensure that you can live in a monthly Airbnb for less than an annual lease back home is by going abroad. One of our plans pre-COVID was to use international geo-arbitrage to have the same standard of living for a fraction of the cost. There is a large part of the world where your dollar can stretch further than in the US.
My partner and I have already done this by renting Airbnbs for a large number of people during the last few years in countries like Thailand, Costa Rica and Mexico. For the cost of a hotel room in Seattle we had way more space and ridiculous amenities like a live-in chef, butler and cleaning staff. This is one way that you can get more bang for your buck if you’re looking for even nicer accommodations than your original apartment.
Now, of course, I can’t talk about perpetual travel without mentioning the pandemic we’re currently living through. Given how I went full hermit when the pandemic started in March and have only seen a handful of people outside of a computer screen, I expected to be very nervous about moving into different spaces during this time.
I can now report that after trying it a few times I am no longer worried about moving into new spaces frequently during the age of COVID because of the precautions that are being taken for short-term rentals.
In response to the pandemic, Airbnb introduced more cleaning procedures and the two Seattle Airbnbs we stayed in both have an “Enhanced Cleaning” badge, which means that the spaces are not just cleaned, but sanitized before we moved in.
Further, our first Airbnb told us that they were letting the space sit with the windows open for 72 hours before and after our stay to give any possible contaminants time to die out. Knowing these protocols and seeing the spaces after we moved in, gave me peace of mind that moving frequently in this day and age wouldn’t be a completely dumb move and so far that seems to have been correct.
Another thing we have enjoyed about being in these Airbnbs is that they were places with their own entrances so we didn’t have to share a hallway, front door or mailbox with anyone else, like we did in our apartment. Getting out of our previous apartment building was usually the most stressful part of my daily walk since I didn’t know if people would be wearing masks and there wasn’t room to avoid them.
In research and practice we have found that it’s possible to find short-term rentals that are similarly priced to annual leases. These places are as nice or even nicer than the apartment we rented annually. Plus, you don’t have to separately pay for and set up utilities.
Instead, we move into a fully furnished and prepared location and are able to settle in, rest up and start exploring our new location immediately. I hope these tips can help you if you’re looking into a nomadic life or are just curious about the costs of short-term rentals.
If you want to see some other ways people are living differently, check out Alternative Housing Stories.
The Millennial Money Woman says
What a great way to spend your time – living abroad for the price of an apartment lease. Not only that, but you have the opportunity to experience new cultures, people and of course new food.
To be honest, traveling with no deadline is one of my future goals, as my website continues to grow.
It would be a dream to travel to varying locations over the world, live on budget and yet experience parts of this planet that most do not have the opportunity to see.
I was also happy to see that Air BnB provides “Enhanced Cleaning” badges – especially during this pandemic. This is helpful to know, moving forward.
Thank you for sharing your adventures.
The Millennial Money Woman
A Purple Life says
That’s awesome – I’m excited to hear about your adventures 🙂 ! And yeah the Enhanced Cleaning badges have helped me feel better along with their other guidelines.
Two questions come to mind
1. As a nomad, How have you approached healthcare ?
2. How do you handle snail-mail frequent address changes?
A Purple Life says
1. I was originally going to have Global Expat Insurance through IMG Global, but it requires you to be outside the US for 6 months of the year, which isn’t possible right now so I’m using a stopgap plan of travel insurance that covers medical emergencies globally through World Nomads until I can travel international again
2. I use Traveling Mailbox
Pass Boone says
Thanks for posting. Being international nomads (late 40s) is part of our early retirement plan. I do have the following questions:
1. What are your plans for taxes once you go international full-time?
– I’ve read the book Nomad Capitalist and blogs but I’m very curious about what others have planned
2. What do you do with your accumulated stuff?
– We plan on liquidating most of the stuff the can be replaced and put in storage all the things that we want to keep and still have once we’re done being nomads. I’m curious about other options.
A Purple Life says
You’re welcome 🙂 and that sounds like a fun plan!
1. I’m not planning to make any income in retirement so I don’t have a real tax plan for that. The money I take from investments is below the threshold where you pay taxes on those. However, I’m also not moving abroad full-time and believe if I do accidentally make money I will still need to pay federal taxes on them (I’m a resident of Washington State, which has no income tax).
2. We got rid of basically all of our stuff actually. I talked about that process in a post on my site called “How It Felt To Get Rid Of Everything I Own”. When moving from Seattle we ended up checking a total of 3 bags between my partner and I. We did this knowing that the pandemic had drastically changed our nomad plans for an unknown amount of time and that we wouldn’t be moving around as much. When we start traveling again I’m only bringing airplane carry ons (which has proven to be possible for me because I’ve continued culling things I don’t need) and my partner plans to check a bag for himself.
I hope that helps!
Jason MI#1 says
there are a number of issues with you hypothesis.
First, you would pay taxes on the returns from the re-investment of the sale of your house, right?
Second, prices for Airbnb’s will likely rise again once the pandemic receeds globally.
Third, there are ethicsl issues round this as a long term strategy. Short term rentals remove housing stock from communities, and result in pricing out lower income people from desirable places.
Otherwise, why not just use the proceeds from the sale of a house and the invested returns to lease a traditional apartment of house somewhere? That’s what my parents did in NYC for the last 19 years.
One of the reasons I don’t rent an apartment is because I enjoy the nomadic lifestyle after working in a cubicle for 34 years.
More importantly, with planning, I’m not double paying per night (ie, not paying for an Airbnb/hotel while also renting an apartment as a base).
Without the apartment, I’m just paying one cost per night (Airbnb/hotel), so it’s much more affordable, while also allowing me to travel.
I haven’t considered any ethical issues so I’ll look into that. Thanks!
First, yes, but I’ve built that in the numbers above with margin as I’m prone to do.
Second, we’ll see. Competition keeps prices low and if you book for longer terms (more than 1-2 nights) you’re bound to get discounts.
Third, the overall economic impact of short term rentals is not clear. There’s evidence on both good and bad sides. And I don’t think a beach home in Naples, FL is taking property off the market that would otherwise be low-rent housing (or even affordable for many).
I don’t want to be tied down in an apartment. If your parents want to do that, good for them. I don’t.
One question: Do you or your family ever use a short term rental?
Jason MI#1 says
Yes, we do use short term rentals, but I don’t use short term rentals in places where they negatively impact the ability of local residents to find affordable housing. So, in places like Moab UT, where locals generally can afford housing much of the year, I will use a short term rental. However, in places like cities (including places like London, Paris, Madrid etc) where rental prices tend to be very high, and short term rentals displace residents, I stay in hotels. So, in places like Jackson Hole WY, or other ski towns, where local s have a hard time finding places to live, I stay in hotels, or in rentals on the mountain which would not be housing stock suitable for local residents anyway).
This includes Hawaii, where I will book time shares through third party resellers. That type of housing doesn’t negtively impact locals housing stock, as those areas are zoned specifically for hotel/timeshare, and I feel my tourist dollars do support local residents.
I’m doing this now! It wasn’t the plan (a long story), but I retired at 58, sold my condo in Chicago, sold or donated all my belongings except what I can fit in a suitcase and backpack, and now I travel the US and Europe staying in Airbnbs and cheaper hotels. It’s amazing, very affordable, and very liberating to have few belongings.
I get health insurance through the Affordable Care Act. I also open a mailbox at UPS stores. But I often go weeks or months without a mailbox. I get everything online and when I need a package (ie, diabetes supplies), I open a mailbox. UPS doesn’t require as much ID as the US Postal Service does, so I use UPS (my driver’s license and passport are enough for UPS).
Two things may derail this nomadic life for me: when I need to renew my driver’s license and when I want to get social security. Both seem to need permanent addresses, but I haven’t researched enough to be sure. I still have a couple years before either of these will occur.
Overall…I highly recommend the nomadic life and Airbnb!
A Purple Life says
That’s so cool! It’s awesome to hear about someone who has done this successfully over a longer term. That’s a cool mailbox strategy as well. I might price out that option for myself – I currently use Traveling Mailbox and just have them forward me a package or letter if I need it (otherwise it’s all scanned online). I’ve really enjoyed my time with them, but I’m curious if your approach would be cheaper in the long run.
Fair on both counts 🙂 . I renewed my license right before retiring so I’m a resident of Washington State for 6 more years. When that time is up I’ll need to decide what to do next resident wise. I didn’t know social security requires a permanent address as well – that’s an interesting consideration. I wonder what full-time RVers and the like getting social security do. More things for me to investigate 🙂 ! I’m so happy you’re enjoying the lifestyle.
I looked into a similar mailbox strategy that you’re using. I forget the name of the place, but it would scan my mail and even cash checks for me for a $4 fee. (I sometimes get dividend checks.) But the main reason I needed a mailbox is to get the occasional package, so a virtual mailbox didn’t seem appropriate. I’m sure your way is cheaper overall, especially if you need a mailbox all year, But the way I do it (skipping a few weeks or months when no mail or packages are expected) probably brings it closer to your lower cost.
I’m also not positive about social security requiring a permanent address. It was just something I read in passing. There may be a way around it. I hope you find a good way to get SS without a permanent address!
Regarding the driver’s license, i renewed mine just after retiring when I still had a utility bill with my address on it. I got lucky and, like you, I don’t need to be concerned about it for awhile. Nice!
One other thing: UPS won’t forward mail to a new address when you close the mailbox and move on. That may be a deal-breaker for you. It’s fine for me because I get most everything I need electronically anyway and just use UPS to receive an occasional package. But wanted to mention it.
A Purple Life says
Thanks so much for the additional info! And you’re right – I want the mailbox year-round right now, but maybe I’m being too old school 🙂 . Everything that I can receive electronically I do and otherwise I usually just look at the scans Traveling Mailbox emails me (instead of having it forwarded). We have had them forward 2 envelopes before, but no packages so far. It’s great to know UPS is an option though if our needs shift in the future. Thank you!
But UPS will forward for a fee. We use a UPS box and plan to switch everything when we settle down, pay for a few more months to ensure we have not missed any address changes and then close that box. We will likely be close enough to just check in as required (they email us every time we get mail and will tell us what we got for free if we call) but they will box up your mail and send it to you any time you request.
Thanks. I’ll check into that. I’m sure one or two UPS store employees told me they couldn’t forward mail when I close the mailbox. And I think it’s right in the contract I signed. But I’ll ask again. I don’t remember anyone mentioning they could do it for a fee. It’s worth checking even if it’s not important for me at the moment. Thanks!
The key is, you can’t close the box. You change all your addresses and make sure you didn’t miss any. If you did miss any, they can ship it to you. Each month’s rent for the smallest box is not much and worth it to me. Agree, once you close, they and the USPS will not forward the mail.
Enjoyed the article, thanks for writing/publishing it.
We have been living in Florida in short term rentals since I retired earlier this year (planned for a long time) and COVID has not dramatically dropped prices in this area (per the realtors we spoke with). We have aggressively tried to drop prices and have been told “no” a number of times, despite the number of open rentals being up dramatically from previous years (again per realtors) and us offering several month rentals. That said, the places we have stayed have been below asking, but only after some serous looking around, bargaining and rejections. Strange when there are hundreds of open places during their peak season (and Canada has not opened the border, so an entire population of snow birds has not come down).
We have not used Airbnb much (once) though as their fees are so high and we have found the same locations on multiple different sites, usually leading us to contact the agent or owner directly (through websites we found the contact info, not by messaging them in the Airbnb app).
It has been fun trying out different areas of this part of Florida (when we retired we were not 100% where we wanted to go, so thus our nomadic lifestyle), but it is also stressful/annoying to pack up all your belongings on a recurring basis. We did one rental for nearly 3 months and that felt like the right length of time for us (in 2 days we move into another 3 month rental) but had a few 1 month which was just too short.
Most of the places were less than our rent was before I retired. The next place is over our rent, but it is a nice place in a great location during the very peak season, so we are good with that decision.
Thanks again, not for everybody, not sure it is for anybody long term (years) but it can be a great way to explore and get a real feel for a location.
What cities in FL? We’re looking at a ton of them.
“Most of the places were less than our rent was before I retired.”
This is the heart of the matter even if there’s no discount — it’s the same cost as renting. My perception was that it would be more expensive than renting but apparently it’s not (which is good news).
And in the end, we can certainly afford to pay more if we had to…it’s just tough for me to consider that. LOL.
I am recommending to add Port Saint Lucie to your comsideration list.
My wife and I left northern VA early last year to relocate to the Port Saint Lucie area. We initially rented a 12 month lease for $1,250 for a two-bedroom, 1.5 bath with a single garaged home. The place also had a nice sized sunroom which we used as a “climate-controlled storage unit”. We only unpacked 1/3 of our things in case we needed to move to another area.
We however loved the area so much, we decided to build a brand new home less than 3 miles away from our initial landing spot. Our current 30-year mortgage is only $750 a month. This allows us to invest more than 56% of our income from our chosen semi full-time side hustles allowing the 72 rule to do it’s thing at least two-three times before the glide path officially begins.
Where else can you get three main boating ports within a one hour drive? The Eastern underwater topography boats more than 95 wrecks and three main reef ridges ranging from 45 feet to 300+ within a few miles offshore. The furthest dive site takes just a 30 minute boat ride or less depending upon the style of diving that you seek. In some spots you can even shore dive and be on top of the first line of reef within a 10-minute surface swim in less than 30 feet of water!
My brother-in-law lives in Vero beach, not too far away.
I’ve spent a lot of time on both the Atlantic and Gulf sides of FL and the Gulf side seems “better” to me. No?
It depends what you want to do in your free time. To me riding on boat for more than 2 hours to arrive at a site to dive deep wrecks at 100+ feet does not sound all that appealing.
In the Vero area there will be another deep well shipping ports for Carnival, etc as well as a 500-acre endless surfing center built over the next decade. My BIL lives in the Tampa area which is nice to visit but I left the DC capital area to get away from the congestion. Could less traffic congestion offer more time for Bridge or Pickleball? 😉
I hate traffic and congestion as well, so Tampa is not on my consideration list (as Miami is not).
I’m looking more at Sarasota, Siesta Key, Naples, Marco island, etc.
I agree with Scott in many of his comments.
My husband and I left an island- sold all of our stuff with the condo and lived in over 40 Airbnb’s internationally and domestically for three years (with a dog.)
Though it is awesome to travel- looking for places, places misrepresented online, the rare snarly host, and packing up again and again can take it’s toll. (I am 45) For the most part, I would say Airbnb’s customer service is not very good either. They are a mediator between you and the housing owner. You are not their “only” customer. So paying up front 10k for three months “rent“ can be scary. And your credit card company will not protect you. This is a gray area.
You do get price breaks for long term rentals – and I have asked owners for a discount and succeeded, but I am going to heavily disagree with the 40-50 percent discount as sited above. That is not true. But I do completely agree that the cost is comparable to renting. Absolutely! And you can stay in some spectacular places.
You do get a very good sense of an area without permanent commitment too going this route.
Another way to get some financial return on your primary residence is to own a duplex. I wrote a bit about this in my millionaire interview #206.
We live in a very nice duplex (probably technically a triplex since it has two large units, and a small studio rental in the basement), that provides almost $45,000 of rental income per year ($2,875 in the larger unit and $850 in the studio, per month). It also gives us a great place to live.
If we wanted to do what you were describing, we would probably rent out our unit in the duplex out on Airbnb, and then use that income to pay for an Airbnb wherever else we wanted to live for part of the year.
The benefit of this approach is that you maintain your primary asset, avoid the cost and hassle of selling it, generate good cash flow from the regular renters and the Airbnb renters, avoid all the taxes of selling, have a place to store your extra stuff, continue to earn appreciation, and have it available if you want to return home for a while.
We would do this with our daughter and SIL if they wanted to, but they don’t want to be that close to us. LOL.
That said, they are living in our basement now, so what’s the difference, right?
Jim @ Route to Retire says
This topic actually makes sense right now for us. We’re trying to figure out a fame plan if we come back from Panama next fall. We’ve talked about a bunch of different options, but one that was suggested by a couple other folks in the FIRE community was the idea of having a small home base somewhere and then traveling a lot more outside of that.
But this could be an even more interesting solution, especially because we had sold everything we had when we moved to Panama. Everything’s furnished here so we had no need for stuff. If we head back to the US and buy/rent a place, we now have to buy furniture and all that jazz… but not if we bounced around in Airbnbs!
Not sure how well it would work but definitely something to consider. Thanks for this!
JeffB MI20 says
We intend to get a high rise mainly for the security and lack of flooding since we live in Houston. We can most likely sell our house and take that money and buy a condo. It’s a glorified storage unit. 🙂
One key issue that “Travel” and some others brought up / implied – while the nomad lifestyle is cool, the constant churn associated with moving can get old. We tried a nomad option for a few months about a year ago – it was fine but knowing that you MUST find a place, since all your belongings are in storage and you don’t have anywhere else to go, can be stressful. If one plan blows up due to an Airbnb that isn’t working, etc., suddenly you need to react and it could stress the budget if you need to find another option quickly. We downsized a few years ago, rented a traditional apartment for a few years, before buying a new, smaller home. We are thinking that we would like to try to live in Europe for a few months per year after retirement. However, for us, we want to initially know that we have a place to come back to, immediately, in case our nomad plans fail to deliver. I don’t expect that total “Nomad” is going to work for us but spending several months outside of our primary residence with the security of knowing we can go home at anytime is probably the best option for us.
We are likely to go that route as well. The key here is to have enough net worth to buy homebase and have enough cash flow to travel in style.
JeffB MI20 says
Follow these people. They sold everything and travel the world. https://worldwidewaftage.com/
JeffB MI20 says
We plan on traveling all over using this method. Current budget will be about $5K a month and we can live in almost any city in the heart of the action. London, Munich, Salzburg, Edinburgh…whereever.
Your post raises two questions in my mind.
1) Why do the owners rent their properties on Airbnb for less (or at the lower range) than the comparable monthly apartment lease?
2) Aren’t their laws regarding tenant’s rights which dissuades people from offering long-term rentals on Airbnb? That may not be an issue outside the US.
Hi Purple life! I love your blog and your journey, additionally, the voice in your writing is so pleasant. I have combed over the comments and maybe I missed it but how would you deal with the dreaded jury duty? Has anyone else who is nomadic full time had to deal with jury duty?
Thank you again for sharing your unique adventure!
A Purple Life says
Hi Tim! That’s so wonderful to hear – thank you 🙂 . I got out of jury duty! They had a form on the Seattle website where I could ask to be excused because I wasn’t going to be on that side of the country. It took a few days, but I got an email that they dismissed me. If it happens again I’ll try that, but luckily if really necessary I can fly back to go to jury duty since I have the time (though I’d prefer not to in a pandemic and would mention that to them as well). And of course! Thank you for reading it 🙂 .
I’ve been a nomad of sorts for over 10 years and have a few view points which may be interesting.
In 2009 I spent 4 months traveling the country and staying in hotels, primarily using Priceline. I found that 2 1/2 – 3 star hotels in most locations could be had for $32-50/night and multiple techniques for identifying what the hotel you were bidding on would be. (For instance staying in a Cosmopolitan Suite in Las Vegas for <$100/night) Over a period of 5 years I didn't have a lease, as I would "move" for a new contract and visit family when I wasn't working.
In 2017 when the total eclipse came across the country I rented a 3 month apartment an hour outside of Nashville for less than the going rate for hotels anywhere along the path. We essentially "camped" in the apartment for 5 days and had a blast. Came in early and left late in order to avoid the higher costs of travel. I did use it a few other times as well when traveling through, or to visit Nashville. Really cool option for some of those massive events which sell out a whole city!
I've also flown into a location before and gone camping for 4 days. Flew in, rented a car, picked up some necessities from Walmart and attended a convention.
People have asked questions about mail and residence. Full Time RVers use a few specific states because they're more nomad friendly, Florida, South Dakota, and Texas are the most common. If you want help with setting up a domicile and mail forwarding checkout Escapees. It's an RV community which has been doing it for 40+ years.
Nowadays we'll travel in our RV for a month or so at a time and come back to an apartment. When we move to a new state we rent a 6×12 U-haul trailer and hitch it behind the RV. It's the best of both worlds as you have the flexibility of having a mobile, self-sufficient living space, and the luxury of a bricks and mortar home.