Income property – Affiliate Marketing Programs

This is an as-told-to essay based on a conversation with Dave Claunch, the owner of the Bloomhouse rental property in Austin, Texas. The following has been edited for length and clarity.

^{This story originally appeared on Business Insider.}

I was aware of the Bloomhouse’s existence about 10 years before my wife Susan and I bought it. But I didn’t know exactly where it was and had never visited.

We were looking for an investment property either to flip or to set up as a vacation rental. We had a good friend who owns a vacation rental property management firm, Lodgewell, and we thought it’d be a good opportunity to partner with her.

One day, I got the local Business Journal, here at my office, and there was a color insert of high-end real estate properties with the Bloomhouse on the front page. I thought it’d be an awesome investment property if we could make it work.

How we decided to invest in the property

^{Left to right: The exterior of the Bloomhouse after renovations and before renovations. Courtesy of Dave Claunch via BI}

We purchased the Bloomhouse in April 2017, renovated it for 18 months, and went online in early 2019. When we bought it, it had been on the market for six or seven months, which in Austin, Texas is rare.

Even more surprising is it was appraised for lower than the value of the land. The building, which was built in the ’70s, was subtracting from its value and there were people looking at it with the intention of tearing it down and putting up a McMansion. I think the sellers rebuffed those advances because they wanted to see it preserved.

^{The Bloomhouse has a unique path leading up to the front door. Courtesy of Dave Claunch via BI}

We were looking for something a little bit more traditional, but pretty quickly my passion for the uniqueness of this property, as a piece of art, drove the decision-making process. Nobody was dumb enough to buy it to renovate it either — except me.

^{The exterior of the Bloomhouse in the woods. Courtesy of Dave Claunch via BI}

Fortunately, the economics worked out well, but it had a lot of problems and it was in pretty bad shape. There was mold and all the plumbing was calcified and didn’t work.

How we party-proof our rental property

^{A sitting area and bar inside the Bloomhouse. Courtesy of Dave Claunch via BI}

It was a leap of faith getting the property fixed up, solving all its problems, and still making money on the back end. My goal was to not just return it to its original condition. I wanted to make it as close to perfect as I could, while also party-proofing it because vacation rentals get torn up pretty quickly.

^{The kitchen. Courtesy of Dave Claunch via BI}

People usually buy low-quality furniture and it breaks, so I wanted to be sensitive to that and put a lot of extra effort into making everything as durable as possible. Lodgewell also does a great job screening rental applicants. Our rental is limited to four occupants to appeal to people who are interested in the artistic side of the structure, and who aren’t thinking “Hey, this is really cool, let’s throw a kegger.”

How we prevent vandalism at our rental

^{Furniture and decor in the living room. Courtesy of Dave Claunch via BI}

We haven’t had any major problems. It’s made of concrete, so you’ve got to try really hard to break it. There are certain things that are more fragile than others, but even the interior walls are about an inch of concrete stucco.

^{The couch in the living room. Courtesy of Dave Claunch via BI}

We’ve had an expected amount of damage to the contents — a piece of furniture breaks or a carpet gets stained — but the maintenance has been less about repairing damage from renters and more about keeping up the structure so it looks good.

Types of people who rent our property

We’ve had people from all over the world stay here — but creatives love it best.

^{The bedroom. Courtesy of Dave Claunch via BI}

The one-bedroom, two-bathroom home starts at $400 a night and goes up depending on the time of year. One thing that binds all the guests is they tend to be creative people who appreciate art. I’ve had friends who are in accounting or finance and they’re incredibly uncomfortable at the Bloomhouse. It messes with their heads and they don’t like it. It’s the creatives who feel comfortable there.

^{A sitting area in the foyer. Courtesy of Dave Claunch via BI}

It’s a bit discombobulating the first hour or so because we’re always used to square and level walls and this structure is so organic on the inside. You do kind of feel out of sorts.

^{The Bloomhouse bathtub. Courtesy of Dave Claunch via BI}

In my experience, and with people I’ve talked to, they say after about an hour it starts to feel really comfortable. After a day you’re like “Oh my God, why aren’t all buildings like this? It’s so much better.”

How we promote our rental property

According to our management firm, about 60% of our bookings come from Airbnb, 10% come from VRBO, and 30% come through direct bookings or smaller sources.

^{A uniquely designed bathroom mirror. Courtesy of Dave Claunch via BI}

We have social media channels, but we’re not very active on Facebook or Instagram. This is a side gig for me, and I’m busy doing other stuff. My wife will occasionally post, but we’re not actively promoting the property. It’s mostly through word of mouth or news articles, and we’re okay with that.

^{A winding staircase inside the Bloomhouse. Courtesy of Dave Claunch via BI}

We’ve also had a few videos on the Bloomhouse go viral — for example, a TikTok posted in June got nearly two million views. It’s been surprising how much the property has resonated with people who appreciate its unique artistic value.

^{A reading nook in a corner of the Bloomhouse. Courtesy of Dave Claunch via BI}

The property usually books about a month out, and we’re booked about 90% of the time, which I credit to the uniqueness of the place. One of our goals in purchasing it was obviously having it as an investment and a revenue stream, but also to preserve it as a piece of art.

^{Axel Springer, Insider Inc.’s parent company, is an investor in Airbnb.}