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Financial Freedom Through Airbnb - How We Cash Flow Over $30k/month
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- Опубликовано: 14 ноя 2021
- Here are the things you MUST consider for your Airbnb property and I'll reveal how much we made last month from our 4 properties.
Airbnb Investor Academy - a complete step by step guide to investing in and managing short term vacation rentals:
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You may often see videos online of some people telling you how much money they're making on Airbnb and others telling you it's a loser's game, and the expenses and fees are so high, it's hardly profitable.
I'll be honest - both are correct, and everywhere in between... Short term rentals, if done right, can literally bring in thousands of dollars per month, and in some cases tens of thousands per month.
Many new investors gloss over the importance of the following factors that you MUST consider:
- Location (must be in a place that has tourism... no tourism, no need for Airbnb, unless you want 30+ day long stays)
- Proximity to local attractions (why are people visiting this area and what are they doing while there)
- Wow factor.... Airbnb/VRBO are both all about CLICK RATE (what percentage of people click on your property when scrolling past it, among the thousands of others they could possibly book) The higher click rate, the more chances you have at getting a reservation, the more reservations you get, the more positive reviews you will likely get, the more reviews, the higher you get bumped in Airbnb search results, which results in more views, and so on. I aim to create 1-3 key ways or moments within the property to REALLY stand on out Airbnb. People want a cool experience - or even an 'instagrammable' moment! Create it for them! Give them a reason to pick your place over the others in the area.
- Even if the property is AMAZING... what are the investment details? How hard is your money actually working for you? Just because a place brings in $20k/month in revenue, it doesn't mean it's an amazing investment. We need to forecast what our cash on cash and total return on investment will be. This will tell us how hard our money is working for us and which property would be the best place to invest.
We started investing in short term rentals just two years ago. Once we saw the cash flow potential on the first property, we never looked back. Currently, at the time of uploading this video, we have 4 operating Airbnb properties and one long term rental. Last month (October 2021) they brought in a combined $69k in revenue - IN ONE MONTH! That's insane an you'd never get that through all long term rentals. Our cash flow - even after splitting one of the four Airbnb profits with a co-investor, our take home was over $34k.
That is just the cash flow - it doesn't even include the principal paydown on the mortgage every month nor the insane appreciation we have experienced the past 12 months. The equity is icing on the cake and where the true value is long term, as our net worth grows substantially more with each property we acquire and hold on to.
I hope you find this information valuable. Not many investors will disclose actual numbers and do break downs for you online. I always valued transparency from others, as this is how I learned! So, I hope you value my transparency in this video and all my other content. Please subscribe to my channel - I really appreciate it and it helps me more than you know! Throw a like on this video if you found some value in it and drop a comment or question!
Let me know what questions you have!
Did I hear you guys utilize PMs for these properties ? Would you be willing to suggest some that you’ve used? Also anyone in Florida. Love your stuff ! Keep it coming !
I am really good at Airbnb setup and managing but want to get a partnership with a home builder like your last property. Tell us more or do a video about that deal. 1) who approached who? 2) did you split the cost of the house and renovation half? Meaning I want to make sure is a fair deal when I approach someone :). Or put myself in the position to get approached.
We met when he was building the houses across the street from me and we crane friends. Later the idea came about to go in on an investment together. You can view the breakdown of the invest analysis here… keep in mind we have far exceeded our revenue and cash flow expectations already! :)
ruclips.net/video/xJ04gMNvCq4/видео.html
Thank you for sharing!
What’s a tool you use to keep track of all the monthly bills for each property?
I have been using a custom bookkeeping template but we’re moving to quickbooks soon
Hi Michael, I'm a big fan! Quick question - do you guys use a property manager for your STRs? Is it worth the cost? I've read that they could take up to twenty percent of gross revenue per month on a property.
Hey thank you! No we self manage. May use a PM in the future as we scale, but for now - I'm with you, it doesn't make sense to fork up 20-30% of top line revenue when you can automate much of it through technology nowadays :)
Also, I was reading about how you have to have the adjacent neighbors to sign a paper. How did that go for you? This is in Nashville.
You just need to send them certified mail. They don't need to sign anything. Kind of silly IMO
While I love your tips and thought process, your butterfly bnb is at $325 @ 1 night for Nov, @271 for 2 nights . $13824 Revenue (I imagine after ABNB's cut?) for 22 nights would be a $628 nightly rate which is near impossible for a property like this. Help me understand the math?
You’re looking at the available nights which are all week days and last minute pricing. Look at our calendar in the spring time for example - we’re charging $1k/night for Friday and Saturday nights and we’re already starting to book up. Remember - it comes down to the average daily rate of nights booked. We charge much more on weekends
Additionally the revenue includes the cleaning fee we charge per stay, which is on top of nightly rate
Michael - I love your videos man. One question though. When it was your time to buy a second property, how did you convince the lender that turning the first house into a STR would suffice? I’ve talked to my loan officer, and they would only allow a second loan if the first house was converted to a long term rental only.
I guess it depends on the type of loan? If they’re using projected rental income or rental income from another property, until you file taxes and report income for a STR, most lenders will only take long term rental income with a lease in place as rental income to qualify for an additional loan. You could also opt to go with a lender like Visio who will use projected short term rental income and projections from AirDNA to qualify the loan and it’s based on DSCR (debt service coverage ratio) instead of you qualifying based on your personal income and DTI. The int rate will definitely be higher and 20% down min requirement but pretty cool program
@@melefante6 The first part of your reply proves my point. They will only allow a second home loan if the primary house (one I’m currently living in) is converted into a long term rental. I want to start building my Airbnb portfolio, but the bank won’t let me. Maybe use a different lender?
@@bradyaiello714 no with what you're saying that would only apply if you're applying for another primary residence... you can have up to 10 conventional loans in your name at a time. One primary the rest secondary or investment loans. And you can have as many commercial or DSCR loans as you want...
Hey! Loved the video! If i live in a different country, and I want to invest in Nashville, do you think it will be smart? I live in Israel which is 12 hours flight from there.. Thanks for the great content!!
Just be aware of local laws and regulations and permit process. As long as you set up with great cleaners and maintenance you can manage remotely. Time difference may present problems but can always hire a VA or a PM to help manage or permanently manage for you
@@melefante6 thank youuuu
The main concern I have is airbnb randomly shutting accounts down. In one of my.FB groups yesterday a guy posted a desperate plea for help. also - question- have you ever had a guest completely lie about the property to get a refund? I'm seeing that comment a lot on my FB group, too.
If a guest does that you can tell Airbnb and they can step in and assist. We rarely have problems like that, if ever. Also if Airbnb ever shuts you out - you must’ve done something wrong, like really bad. And even if so you could use Vrbo and other booking platforms. Or open a new Airbnb account probably🤷🏼♂️
But I wouldn’t let the fear of things that are an extreme rarity prevent you from investing..
Is the long term rental property a year or more?
The long term rental is on a 12 month lease
Just got my real estate license to sell homes and save up capital so I can get some AirBNB properties - do you think any sort of market dip would really effect revenue? Or do you think people will travel no matter what so I should do well depending on where I buy my properties?
I think people will travel regardless... If a major economic crisis happened, people may take less vacation or less luxurious vacation. But people will still travel.
Are all your properties driving distance from each other or from where you live?
Our first two were close by but the next two were almost 4 hours away. But we traveled in a van across the country for 6 months - so you can certainly manage from a distance :)
Do you know where I can go to look if I need a license to do this in my state? Thanks!
You don’t need a license but some cities require a permit to be applied for and obtained to operate as a STR. Google city name and short term rentals and should find some info
@@melefante6 thanks!
Do you have to register a company to run short term rental ?
By register a company - do you mean form a LLC? No not necessary to operate a STR, but something to consider as your assets grow.
Annnnddd he has a course 😑