How Much $$$ My Luxury Cabin Made in its First Month

In 2020, I bought a piece of land in the Catskills Mountains in New York. The dream was to build a luxury mountain cabin, partly to use for me and my family, but partly to rent out and make some money. But then the Canadian trucker protest happened and the price of lumber, the primary building material, went through the roof. When the price of wood did eventually come down, the Fed started increasing interest rates and I had a race against time to close on my construction loan. Building took place over 13 months and had its ups and downs, but now, as of spring 2024, the cabin is finished and I've been renting it out for two months already. In this video, I'm going to show you my first and second month's revenue and expenses from Airbnb and we will tell you whether we made a profit or not. But first, let's give you a tour. Oh, wait, wait, wait. This video is brought to you by Kudos, but more on that later. Hey guys, come on in. So this is our finished and fully furnished Catskills Mountain Cabin here in upstate New York and we've got these terrific high ceilings. I think that's about 19 feet or something. They came out really well, better than I'd expected. When you first come into the home, the first thing you actually see is this foosball table, which is, this is a lot of fun. And I was able to get this on a sale, I think it was a $600 table reduced down to $400. So that's a little tip for people if you're doing a rental or short-term rental, any sale, like President's Day, 4th of July, any of those sales, you can get some terrific bargains. This was our Facebook marketplace and it's actually, it's in pretty good condition. I'll probably get a new one in the future, but this was, I was running out of money for furniture. So I picked this up for about $400 as well. So this is one of my favorite areas of the home. I absolutely love how this marble came out, okay. This is like a, is it marble or granite? I don't know. It's like the reverse of marble, you know, marble is normally white with black veins in it. This is black with white. And I got these stools, these leather stools for, you know, for the breakfast bar, which worked really well as well. This range hood over here, this is the one thing my wife asked for. And this is like some super range hood from China. Okay. And it's an absolute beast. You turn it on and it is like industrial level. Okay. Over here we have the coffee bar. So we got the Nespresso machine and we've even got the milk frother. So if you bring your own milk, you can have a cappuccino or a latte or something like that. Um, right over here, we've got the wood burning stove. This costs about $8,000 to install a, well, both for the stove itself and for the installation. It's one of those ultra high performance EPA ones. So it actually gets the EPA deduction for high performance, uh, efficient wood burning stoves. Then we got our 55 inch TV, which actually kind of looks small now. It looks more like a 40 inch because it's just on such a big wall. But yeah, that is a 55 inch TV. We got a bear skin down here, or I think it's supposed to be a Buffalo skin. This is actually a fake one. Okay. It's a faux Buffalo skin. And the reason for that is just because I did actually have a real elk skin in here at the beginning, but it shed so much hair, hair was just getting everywhere. And I was afraid that I was going to get bad reviews because of it. So I went online and I found the most realistic fake animal skin that I could find. And yeah, it works pretty well. I think it looks more like a bear than a Buffalo. Uh, but yeah, whatever. I'll say it's a bear skin. All right. Let me show you the bathroom. So the bathroom is one of the rooms that came out really well. One of my favorite rooms. And I just love how this mirror came out. So this mirror, it lights your face, but it also sort of backlights has this sort of skirt with light around the wall, which I feel is really, really cool. And it's actually heated as well. So when you're having a shower, um, you can press that heated thing and, uh, it won't steam up at all. These tiles over here, these are from Home Depot. I also got these in a sale as well. So, you know, you can, if you wait to buy building materials, you can buy them in a sale. Let's now look at the master bedroom. So this is our master bedroom. We have a king bed in here, um, which is really cool. So this is a little bit of a mess up with the design. Basically when you're lying in your bed, you have this view of these three doors. I don't know whether you can really see that on the camera, but basically it's these three doors right in front of you. And in the morning you wake up and you see, oh, there's three doors. It's kind of like that meme where you have the doors and you have to choose one. I'll just show you the second bedroom as well. So this came out really nice. This is a queen bed. When we were building this room, I was worried that it was going to be too small, but once it was actually built with all the sheetrock, it wasn't as small as it looks. I just want to show you a feature as well. And we've got this in the main bedroom, but these bedside tables, every bed space in the whole property has a wireless charging pad for your device. It also has USBs. So if you have an older phone that doesn't have wireless charging, you can bring your cable. And these lamps, you just touch them to turn them on and they have three different brightness settings. Look at that. Isn't that cool? One, two, three and off. This is a thermostat that I can control from my phone, which is very, very useful. And that's basically the inside of the house. Let's show you the patio area and the hot tub. All right, guys. So this is the outside area. This is our 46 foot long patio that runs the whole length of the house. Follow me. Let's check this out. Now, this is one of my favorite features. A lot of the guests have been using this. It is a gas fire pit. You can roast marshmallows here. It's really cool to sit here and you get a really nice view of the forest. You can't really see any other houses from here, or at least not that clearly. It's a lot of evergreen trees, and it's really nice just to sit here and chill. I often sit here with a coffee and just chill out. You can come right out of the master bedroom in the morning and take this little path, these stepping stones over to our hot tub. And there we go. So this is the Sundance Edison 680, and this is a $10,000 hot tub. So we get a tax deduction for this as well, depreciation. And it's actually a little bit of a miracle how we got this, because when the woman quoted us the price, she quoted $8,900 and something. She actually got the eight and the nine mixed up. It should have been $9,800. You know, we basically saved almost $1,000 because she honored the price. Check it out. And this hot tub looks really cool at night, all lit up with all the string lights that we've put here. All right, let's now show you how much money we actually made in February and March. Let's go. But first, we are all about getting value out of financial products on this channel, especially credit cards. And navigating the world of credit card rewards can at times be a nightmare. Wouldn't it be great if someone could tell you which card to use for what purchase and when? Then let me introduce to you Kudos. And you want to listen to this closely because they're giving the first 100 people who download Kudos using my link $20 in rewards for free. Kudos is a free smart wallet that helps you get the most out of your credit cards whenever you shop online. 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Just click the link below and use code SHIFU to get Kudos for free today, and the first 100 people who download Kudos will receive 2,000 points after your first eligible purchase. That's the equivalent of getting $20 in cash back. So after a year of building with trials and tribulations along the way, we were finally able to get this luxury mountain cabin up on Airbnb and see how much money it can make. Now, first I talked to a couple of other hosts with similar properties, one lake house and one mountain cabin similar to mine. In the case of the lake house, it was actually closer to $20,000 in those peak summer months, although that's quite a different property to mine, much bigger, way more impressive with lake access. So I'm going to go more with the smaller mountain cabin in estimating what I could make during the summer months, because that property is pretty much the same as mine. It's also two bedrooms, has a hot tub and no special feature like a lake or anything like that. So I'm going to take $10,000 per month as my target for those peak summer months, but you can never be sure of what the result is going to be until you try something for yourself. Now, unfortunately, because the property wasn't finished, we missed summer 2023, which is kind of the peak season due to the school holidays. Then there were further delays and we missed launching in the fall season, which is kind of a secondary peak in New York state because people come up here to see the amazing autumn colors, leaves on the trees all golden. And so in the end, we finished the house at the end of December 2023 and we got it all ready throughout January and we ended up launching in mid-winter, which was not ideal. So at the end of January, I set up my pricing. We were charging about $160 a night for weeknights and $230 for weekends, which is way below the ideal pricing for my $10,000 a month target. I took some photos and I listed the property and I just waited. It took about three days, but eventually I got my first booking and that lady actually liked the property so much that she asked for a deal on a second night and I gave her a second night for 100 bucks. Hey, it was my first booking and I really wanted that five-star review and she gave us a great review. So in January, for that one stay towards the end of the month, I made $342.28, which is obviously a loss for the month from a business point of view when you consider mortgage, utilities, etc. But it was a start. We've now finished February and we are almost at the end of March and I have someone checking in today staying until early April. So in fact, there can't be any more bookings in March anyway. So I basically have two full months worth of bookings to show you and I will show you a full breakdown of the revenue and all the expenses and tell you whether we made a profit or not. Now, first, I want to explain a couple of things. One is that we did not have the hot tub in store. This meant our prices had to be set a little lower. And two, I did all my own cleaning for the first couple of months. I figured it would be good to get the experience and know exactly what gets dirty so I can keep track of what the cleaners are doing in the future when I actually employ cleaners. Since I did the cleaning myself the first couple of months, I'll be factoring in the cleaning fees into the profit for February and March. All right, so let's now look at how much revenue we actually made in February. And that was $2,625. But we did have a lot of expenses relative to the amount of revenue we made. So I'm now going to go through all of the expenses and show you whether we made money or not. So we have a mortgage payment of $1,529. Estimated property taxes of $500. Insurance of $288. This covers me for my personal use. Any type of rental or leaving the house empty gives me a million dollars in liability coverage, plus cost for rebuilding the home if it's burnt down of $360,000 and $70,000 in lost income. Then we have propane, which is $154. Electricity, $73. Internet, $144. Guesty for hosts, which is the software I use to run the property on Airbnb, that's $49. And a ring doorbell at $3.99, we'll call that four bucks, for a total of $2,741 in expenses. Now, obviously, there's also cleaning supplies, but I bought a load of cleaning supplies when I started in January, and I actually still haven't used all of them yet, even at the end of March. So I just, I won't factor those in for now. So you can see on the surface, we made a modest loss of $116. However, within that mortgage payment, there is $390 in principle that is being paid off by the loan. And that is being paid from the revenue, basically being paid by the guests. They are paying off my mortgage. So it's not cash flow, but it is $390 in February that was basically banked in the property. That is still profit, in my opinion. After all, I'm still having to pay taxes on it. So if we deduct our loss of $116 from that amount of equity that was paid off in the property, $390, we get a profit of $274 for February. But there's more. Let's now look at depreciation and deductions and take this section with a pinch of salt because it's going to have to be looked over by an accountant, but you'll get the idea. Rental properties can be depreciated over 27 and a half years, which works out at a depreciation rate of 3.636% per year on the billed price, not including the price of the land. However, in your first year, even if you put the property in service in January, they use the lower rate of 3.485%. So if we take 3.485% of $360,000, that is $12,546, which is the amount of depreciation I can claim on the house in my first year, i.e. that is the amount of money that I do not need to pay tax on. But there is more because remember, we also bought a $10,000 hot tub and that can be depreciated over five years. So 20% in the first year. That adds $2,000 to my depreciation tax deduction. So that takes us up to a total of $14,546. If we divide that by 12, because there's 12 months, that takes us to $1,212 that I do not need to pay taxes on from the depreciation deduction per month. And I'm guessing my highest tax rate will be either 22 or 24%, depending on how we do in business this year. So at 24%, for example, I will pay $290 less in federal taxes every month. So we have $274 in equity plus $290 less in taxes paid, which is a total of $564. It's not cashflow, but it is technically profit. But you will be pleased to know that in March, we made a lot more. We made $4,085. Our costs were very similar around that $2,741. Let's just say $2,800 because we did buy a few other bits and pieces as well. So $2,800 for easy math. So that gives us $1,285 in profit. Now that was from seven stays in March, but one stay actually overlapped into April. So the property had to be cleaned six times in March. Now the cleaning fee is $90. Like I said, I've been doing it myself, but let's just factor that in as an expense because we will be outsourcing it soon. So 90 times six is $540. We'll subtract that from our revenue and that leaves us with $745 in actual cashflow. But then in addition, we have $390 added in equity and a $290 tax saving for depreciation. So if we add those in, that's actually $1,425 in actual passive profit. Plus if you want to add back in the $540 for all the cleaning I did, that brings me to a total of $1,965 in profit. Now you guys can decide what you want to count as profit. I'm just giving you all of the different income streams for fun. Maybe you don't want to count the equity being paid off in the property or the depreciation. You only want to look at actual cashflow. Totally up to you. I'm obviously also getting a deduction on my mortgage interest too. And the mortgage interest is about $1,100 a month or so. So you could even add that in too, but mortgage interest is a business expense since I wouldn't be paying that if I didn't have this house. But it's just fun to add up all this stuff and see how much you're making. And guys, it's not even anywhere near peak travel season yet. So I think once we get to the end of April, maybe May and certainly June, we are gonna be able to jack up the prices to around 400 to 500 a night. And I'm really excited to see how much we can make at those levels. I'm really hoping to hit that target of $10,000 per month, which would leave us with $7,000 in cashflow after our expenses. And guys, if you are interested to stay here, especially now when the prices are a bit lower, I'll put the link to the listing in the description below or somewhere in a pinned comment or somewhere down below. Also, you can follow us on Instagram at MinnewaskaCabin. That's the video for today. A very big thank you to the sponsor Kudos. And if you want to double your credit card rewards, do sign up with the link below. And actually the first 100 people to sign up through my link, get an extra $20 in bonus cash back after making their first eligible purchase. Basically free money. Do check it out. Please subscribe to the channel if you're new. We'll see you next time. Bye-bye.