The Numbers Behind Our Bungalow Addition

August 9th, 2023

The Back Story, we purchased a property in Whitefish, MT on an idyllic 5 acres in May of 2022. The property was a one bedroom, complete fixer, with a detached garage.

When we first started our home search in Montana one of our main criteria was that the property already had an accessory dwelling unit (i.e. a garage, a workshop, etc). We weren’t sure if or when we would utilize an additional living space but we wanted to keep our options open.

Enter october 2022, in true jason & Erin fashion, two months after we finished the main house renovations, we were planning for the garage conversion!

The main house of the property we bought in Montana was great but it was an 1,800 sq ft one bedroom home. We were able to convert a large walk-in closet into an additional bedroom but we still felt we would personally like more space. Our initial thoughts were, let’s spend $65,000-$85,000 to create an entire new rental unit (cheaper than buying a new property right!) and it will double as additional space for our enjoyment. Now our budget may have nearly doubled on the project (that’s a story for another time), but we couldn’t be happier with the outcome!

While we may have wanted more space, our decision making process in these types of situations usually comes down to the numbers. We turned to AirDNA to lean on actual short term rental data for the area and here is what we found for Whitefish, Montana:

Now AirDNA has many other features that allowed us to hone in on what attributes perform best in this market and that data helped inform some of our other decisions - like 2 bedrooms and luxury finishes. Using some basic math we crunched these profit numbers, keeping in mind there are lots of costs associated to operating a short term rental.

It will take some time to gain momentum on rental platforms and payback the investment we made to create this rental opportunity, but at the end of the day it will be a profitable investment for us!

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