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Into the Airbnb EP 14: Successful long-short rentals in Savannah, GA

Welcome back to another episode of ‘Into the Airbnb’. Today’s guest is Julie from Savannah, Georgia State. It’s a coastal city on the ocean between Florida and South Carolina. She currently runs 19 Airbnb listings, a mixture of mid-term rental, corporate rental and short-term rentals, but all on the Airbnb platform. So Julie shares about how she has built a direct booking website without technical knowledge and shares a great tip on how she managed to get plenty of bookings through a direct booking website. This episode is sponsored by Airbtics, a precise Airbnb analytics platform. So if you’re just getting started with Airbnb and want to find out about objective information about occupancy rates and daily rate of your area, this is the app for you.

Summary
Which year did you start running your first Airbnb? 1:03
How many properties are you running? 5:44
What platforms do you use for your rental home listings? 8:41
How do you market your rental home listings? 13:20
How do you decide the themes of your rental homes? 19:07
What are your top challenges in running Airbnb rentals? 23:43

Check out Julie’s personal website: https://sidwashere.com/

Which year did you start running your first Airbnb?

Julie  1:03  

I started in 2017.

Jae Seok An  1:07  

Right. And what was your motivation for starting it?

Julie  1:12  

Well, I wanted to get.. we had some real estate and we wanted to buy long-term rental properties. So we bought two, my husband and I, when I say we, I’m speaking about my husband, we bought two and then we weren’t able to buy anymore, you know, you have to have a down payment. And I said, ‘What can I do?’ And we had, we had what we called our guesthouse on our property. And I, my husband and I just happened to be on a road trip together. And we were listening to a lot of books and podcasts as we drove. It was quite a long drive. And we heard someone speaking about Airbnb and I had heard of it, but I really had never considered it and so I said, ‘hey, what if we start you know, Airbnb out our little guest house and then we’ll use the money to buy more properties’. And so that’s what we did. We said ‘Oh, no one will ever book this house’. You know, this is kind of crazy. But it went really well and we actually loved it. I loved being a host it was like a duck to water as soon as I started, you know, hosting I just I loved it. So that’s how we got started and then I said, ‘Oh, I want to do more of these’. So…

Jae Seok An  2:26  

Okay, so ever since then you bought new properties, just to run on Airbnb?

Julie  2:34  

I did start doing that. Yes, we ended up taking two houses that we already had and making them into Airbnbs, one of them was my guest house. And then the third property that I put on Airbnb, I actually started seeing I had so many people contacting me wanting it for longer stays like travel nurses, and other people moving different things. And because the house was right next to my house we had just never really been super interested in having long-term renters there just because we, you know, enjoy our privacy and we enjoy using the home for family and things like that. So I said, ‘Well hey, I see a need here’. So the next I bought the next rental house that I bought, I actually bought it just specifically for the purpose of longer stays. So we bought it and rehab and I really enjoyed all the process and it’s in Savannah. And the third property I’m speaking about and it’s actually out of the tourist section so you cannot get a short-term rental licence in this area, which I was okay with because I really kind of envisioned the house the whole time as being for more like a corporate rental or like a long-short. So I put it on Airbnb and a few other sites and it has been booked ever since. It’s been a great purchase for us. So I’ve actually kind of spread out I do quite a bit with vacation rentals, but I also have you know for several years now I have several houses that I do as corporate rentals are, I call them a long-short. So it’s a long term, short term stay. So 30 days or more 30 days is the minimum for several of these homes. Um, but I’ve had a lot of people stay two-three months, I actually have a company that has leased one of my homes. They’ve been there over a year and I’m expecting them to be there another six or seven months. And I really enjoy that there’s a need for both. So I really enjoy the furnished rentals.

Jae Seok An  4:27  

Yeah, so you mentioned that you have like long, long-short rental, which is 30 days…

Julie  4:34  

Minimum of 30 days. That’s right.

Jae Seok An  4:36  

30 days. Are they only on Airbnb?

Julie  4:39  

No, I actually I get a lot of direct business. And we have a lot of military here in Savannah. We do some travel nurses as well. And then we actually have a very strong movie industry here at entertainment. Um, the crazy thing is one of my markets is there. A movie studio actually right down the street and so they’re always needing housing. So I actually work with a lot of different industries. I’ve worked very hard to build up these contacts but um, you know, when these guys come to town, they need three or four, seven houses. And so I’m able to provide a lot of that and that’s also helped me get owners to manage for because they like, they like having it furnished and it’s, you know, you better make better money than a long term renter. But also, you know, they’re there for two/three/four months, and then they head on and the property is well cared for and stuff like that. So I actually work with quite a few industries that way as well. But I do put things on Airbnb, and vrbo and my own website, and then I just, I do a lot by hand, I guess.

How many properties are you running?

Jae Seok An  5:44  

Okay, that makes sense. Right. So like, right now, how many properties are you running? And how many of them are you doing the like co-hosting and using either strategy to manage?

Julie  5:59  

Okay, eight are mine that I have purchased, you know as an investment properties and then I have a total I’m gonna say 19 listings so I have, you know, I manage for other people which I really I really enjoy both.

Jae Seok An  6:16  

Right. Yep. And out of those 19 listings, how many of them are minimum 30 days?

Julie  6:26  

That’s a good question. I’m going to say 12.

Jae Seok An  6:31  

Okay, so most of them are actually pretty long term stay.

Julie  6:35  

Yes, I just have seen there’s just been a big need the more. I always short on houses Sometimes though, I will have a couple of vacancies that I hate that. But a lot of times like in the moving season, I’ll have a waiting list. We have a lot of military here as well. And you know, they it’s great because they can stay with us while they wait to move out of town or in town. So yeah, I kind of do both. And then one thing that was kind of neat was, you know, during the whole COVID crisis, they shut down short-term rentals. And I don’t know if you experienced that where you are, but I’m in Georgia and our governor, you know, kind of in late March, she said, ‘No more short term rentals, no more vacation rentals, or whatever, until the end of April’. And so, of course, I was dealing with quite a bit at that time, I was under a lot of stress. And I for some reason, I just never thought about turning off the listings for the vacation rentals. And we got several bookings in Savannah in the Historic District, which is where the tourists go, and of course, the owners were very concerned they didn’t want to get in trouble. And I said, ‘Look, I’m not a quitter’. We need these bookings. We had very low income, little very little income for those vacation rentals, the suburban homes and suburbs did very well but it for the vacation, you know, area of Savannah and so I said, you know ‘There’s a way around this’. So I contacted each guest. And I said, ‘Hello’, you know, ‘we’re so glad you booked with us’, you know, as of course, they all know what’s going on. And so I said, ‘Would it be okay with you if I extend your stay to 30 days at no cost to you?’ And they said, ‘Oh, sure,’ you know, it didn’t hurt them at all. So I just added on the extra days to their stay at zero charge. And then we were technically within the law. And you know, it also saved them on taxes too, because that move them to a longer term stay, but the owners were very happy. They were very happy just to make, you know, those bookings and be able to honour them. So it’s kind of a nice to be able to switch back and forth.

What platforms do you use for your rental home listings?

Jae Seok An  8:41  

Right, right. I see. That’s interesting story. You’ve mentioned earlier that you also have a personal website to get the bookings. So what kind of website is it?

Julie  8:56  

I use a channel manager called Your Porter which is fantastic. I also created the main website that I use, like if someone calls me directly, I send them a link to the house that’s available for longer stays. And so I actually created a website and I manage it myself on through GoDaddy. Are you familiar with GoDaddy? 

Jae Seok An  9:16  

Oh, yeah, that’s the hosting website. 

Julie  9:20  

Right, they did a great job for me. They helped me create it, it really wasn’t that bad. So I created my own website, because I had my home section by areas of Savannah. So I’ll, I’ll say, you know, what kind of area you’re looking for how many bedrooms and then I’ll send them links to each house. But then I can also take direct bookings on my website because of the Your Porter functionality. They, they kind of manage my listings, but they also create as part of the fee. You get a free website where guests can book directly, so it’s been a great – I guess I do both.

Jae Seok An  9:53  

Oh, I see. So you’ve built a website using the Your Porter service. They’ve built a website, like to generate it.

Julie  10:01  

Well, I built a website on GoDaddy originally and then I link when it when I have a button that says book now and you click on that it goes over to the Your Porter website where they can actually pay and book the home. So it’s kind of a hybrid. I don’t know, maybe I do everything the hard way. I’m not really sure. But it works for my system, because like I said, someone don’t like let’s say, the tourist, the bureau will call me and say we’ve got a movie coming. We need four houses. And I will send them links to several links to my website. I’ll say this one’s available. This one’s available. This one’s available, send it to your director. Tell him to pick one and then I’ll get it set up and each page is for a house. I have a page for each house that I manage. And that way they can see the pictures, they can see the price, they can see, you know, everything. So it’s been very helpful to have my own website other than just the Your Porter is just pulled from the Airbnb listings, but that doesn’t exactly, you know, show them everything.

Jae Seok An  11:03  

Yeah, I think that’s a good strategy that you have your own website. And whenever you see one like specific house, you just link it to the Your Porter, those listing website, personalised, direct booking page. 

Julie  11:19  

Exactly. And it’s very much tailored for what I wanted to say versus Airbnb, you’re kind of stuck with their, their setup, which is fine. I mean, you know, but I like, like the Your Porter is just pulling from my Airbnb listing. But when I send them directly to my site, I can show them, you know, everything that I want them to see and it’s organised a little bit better. I just have a lot more control. So…

Jae Seok An  11:43  

Right. And did you have to hire a web developer to build a website on GoDaddy?

Julie  11:49  

I didn’t they, they actually helped me they have templates. And of course, you know, just like everything else. There’s a lot of work in the beginning to set it up. But it really wasn’t that bad I enjoy technology and so they helped me get set up. I think it was maybe $20-25 like it really was not a tonne of money and I’m gonna say maybe I don’t even know what it is a year maybe $150 a year to host my site like it’s really affordable. I have been happy I sound like a GoDaddy salesman, but whenever I get stuck on something, I call them and they help me for free. You know, so I as far as financially I don’t think it’s bad. Is it the most amazing website? No, but it works for my business and I try to you know, tweak it a little bit and I don’t have a lot of fancy stuff on there. I’d like to add like a local Savannah weather thing to it, but I can’t you know, it doesn’t have a tonne of capability, but I’ve been really happy with mostly the price like if I can keep my expenses low, then I can make more money, you know, and I don’t want to work hard to just pay everybody else. So I appreciate GoDaddy and Your Porter as well, I pay $7 per house. So it’s just very affordable. I used to use a much more expensive management, property management. And I’ve been very happy with the switch. I’ve cut my costs by about 60-70% with that.

How do you market your rental home listings?

Jae Seok An  13:20  

Right. And how do you do marketing? How do you find the people to directly book on your website?

Julie  13:29  

You know what, I have really, I have really worked in around town, just kind of getting my name out there. Once I had one house and I started getting calls. And I said, I need a few more houses. So like I said, I built that way. And then I just started it’s a lot of word of mouth. But I did register my business, you know, with the different movie industry sites, there are a few that they use. But yeah, I’ve just kind of, I’ve just learned as I’ve gone, but haven’t been moving people in the travel industry, and then the military, you know, they, once you kind of get your name out, they’ll spread it around. I do have a lot of business cards, I hand those out to anyone that sounds interested, you know, real estate agents, there’s all kinds of different people you can market to. It’s not easy. The easy way, honestly, is putting up that listing on Airbnb and vrbo. And they do bring you people, but I have found it very valuable to also have, you know, people sending me business, and I always meticulously, I send out thank you cards when someone sends me a booking and I’m talking someone that’s gonna stay with me for several months. I’m not talking about a weekend where I’m going to make $80 you know, but like, if someone sends me a family that’s going to book with me for a couple months, I go, I get them an Amazon gift card or I go get them like a $50 gift card to the tanger outlets. We have a lot of outlets. So I have I do feel that that’s important to always write a handwritten note and say, thank you so much, you know for sending these people and that has actually paid off in spades because that person then goes and tell someone else Oh hey, you know You need housing. These guys are she’s great. And you know, I really try to appreciate my referral sources.

Jae Seok An  15:06  

Right? Okay, then, um, how about these? Like, let’s say there is someone who just moved to your town in Savannah. So that person doesn’t know anybody but when that person wants to run Airbnb in your area, and but let’s say how can they get the direct bookings? What would you advise them to do first thing to get started with word of mouth strategy?

Julie  15:35  

One person with one house just new to the area? I would say if I was brand new to the area and I had one house, I would put my house up on the OTAs which is the outside travel agencies. I would put it up on every website. And then I would put my website up in the house and I would ask the guests ‘Hey, next time book with me directly’. Like usually that’s like the quickest way is to say Hey, tell your friends you know, and then you spread it out all like I’m in Savannah, which is a big tourist, you’re in London, you know like you tell all your friends Hey, if you know anybody coming to London, please give them my website I’ll make them a great deal they can stay with me like you have to put in that footwork at the beginning. Sites like Airbnb and vrbo make it actually very easy on us because they do all that work for us. But it really is possible to get direct bookings and people are seeing the value but you do have to kind of put in the footwork upfront but once you get a few people that talk about you and share your spot, you know it does get easier you can also do an Instagram profile and I really have been meaning to do this. But you know, you can do like a wall in the house or something that’s very photographable and put a hashtag your unit. I know a lot of hosts that do that very successfully. And there are a lot of artists that will do some great stuff for you. One of my listings, it’s called Summertime I just had to do I’m big on themes. I did a watermelon theme for this house because it’s an old house and I said, let me take this negative and make it positive. So I’m just gonna really push like how awesome it is to be an old house. So I said, this is gonna be called Summertime. I did an old not a brand new actually a red glider, which is a very old kind of thing. I put a big glider on the porch I put watermelons everywhere, and I hired an artist to do these insane watermelon murals and she really enjoyed it. But I’ve had a lot of feedback from it. And a lot of people have enjoyed the social media aspect of being able to, you know, have this giant slice of watermelon, you know, in their picture. So it’s been there are a lot of different ways you know, to do that you just have to create a little bit of buzz about yourself. But if you love what you’re doing, it’s really easy to talk about it all the time. And I mean, I am always telling people how excited I am about doing stuff, you know, this is crazy. I was working on this house, I call it the Tiny Seahorse. It’s 600 square feet. I was so excited about this house, I could not be quiet about it, blah, blah, blah. I’m in Alabama with my son at a baseball tournament talking about it. And I actually ended up meeting a realtor from my area, and she has sent me so much business and it’s just because I couldn’t stop talking about how excited I was. And she was like, I just I love that you love what you’re doing. And I actually know someone who needs something. And so you know, if you’re excited about it, and you’re passionate about it, which I definitely am, and people pay attention and they really enjoy, you know, staying with someone who’s enjoying what they’re doing. But if you hate hosting, they’re going to know and if you love hosting, they’ll definitely know.

Jae Seok An  18:45  

Right? I see. That’s a good tip that you should really love and enjoy. What you can do as an Airbnb host.

Julie  18:55  

Make it fun, like it should be fun and creative. That’s one thing I love about this space. It’s very creative, I’m able to just kind of go crazy like I have a different theme for every house and I get really excited about it.

How do you decide the themes of your rental homes?

Jae Seok An  19:07  

So you mentioned about watermelon theme. What are those seem like? What’s the theme of the themes? What kind of themes do you have?

Julie  19:13  

No, it’s a very creative process. When I get a house, I pray over that house and I think about that house. And once I figure out my theme, like the Tiny Seahorse I know that sounds ridiculous. We’re on the coast. So everything here is very coastal anyway. But this house again, the negative was the house is 600 square feet. It’s very small. It’s a two bedroom house. The hallway between the kitchen and the living room is 26 inches wide. Okay, this is like if you are a heavy person, you won’t be walking in the house. It’s really small. But I was like how can I take this negative and make it positive so I named it the Tiny Seahorse so I wanted the small the word you know, like a small word of the name so they would know and then I brightened it up with white and then I just threw little seahorses, everywhere. I just think it just turned out really cute. I made it like a beach bungalow theme, if that makes sense because people are used to little beach bungalows being very small and kitschy and so I actually had a really good time with that theme. But every like I said, every house I do, I kind of, I just really submerge myself into it and have a good time. I am definitely not an interior designer or anything but um, I just have a lot of fun with it. I have another house I have. It’s called the Starfish House. That’s probably our best Airbnb that I own. And I mean, it’s like a starfish threw up in there. There are starfish everywhere, but it’s just so beautiful and calm and coastal and, and people really love it. I’m really proud of it.

Jae Seok An  20:42  

Right? Oh, yeah, I can even see that in the starfish house. You have like starfish shapes. Everywhere?

Julie  20:51  

Right. It’s everywhere. It’s awful. But to me, like if you’re staying in an Airbnb, you’re just there for a few nights or a few weeks or a few months. It’s a vacation rental. So it’s tend to be shorter stays. But to me, I want to stay in something that I wouldn’t normally live in like the Summertime with all the watermelons. No one wants to live in a watermelon house forever, but it’s really beautiful and comfortable and unique, you know, for a short term stay. So just like that’s why, you know, no one goes, Oh, I can’t wait to go stay at a motel six. That’s a very basic, you know, inexpensive hotel here. It’s fine to stay in. But you don’t talk about that to your friends that are you don’t take pictures of yourself with their logo. So I want to create an experience where they go, That was really cool. You know, I have a house called Cake. It’s the theme is cake. And there’s cake everywhere. Like I just tried to have fun. Yeah, I was gonna end it let them eat cake, but I ended up just naming a cake and there’s cake and donuts and cupcakes just everywhere. It’s really fun.

Jae Seok An  21:58  

Yeah, I think that’s really inspiring that? Yeah, you make it like, you make a theme. And you actually make it very special because each vacation rental that people want to stay once a year, twice a year.

Julie  22:09  

Exactly, exactly. We want it to be memorable. And I am proud. I’m really proud to say that I think this is the highest compliment. I get a lot of repeat customers, a lot of repeat guests, and that’s such a big deal to me. I know they would not come back and stay with me if they hated it. And I’m really, really proud to say that I’m not trying to brag, but I am really proud to say people I’ve had just in the last couple of months, people going, Oh, it’s booked. I wanted to stay next week. And I’m like, Oh, can you adjust your dates? We’d love to have you. You know, it means a lot to me. It really does.

Jae Seok An  22:45  

Right? Yeah, that explains why you’ve like how you managed to get your website working like direct booking working, because people love it. So they’re going to visit again. They’re going to tell the people and that explains.

Julie  23:01  

That’s true. But you know what word of mouth is huge. Seeing out a house on a website is it’s okay. But when someone tells you they do a good job, you’ll be very happy there. That’s a big deal. You know, that’s really the best form of advertising is that word of mouth. So, and one of the ladies that sends me a lot of the movie people, she told me, she goes, you always get my people taken care of. She said, these other companies that are bigger than you are on my list, and she said, they just kind of act like they don’t care. And she said, Every time you get people what they need, and I that’s why I call you first and I’m like, Thank you like I work very hard for my success, but I am really proud of that. You know, it’s I enjoy it.

What are your top challenges in running Airbnb rentals?

Jae Seok An  23:43  

Right? Yeah. So let’s wrap up with the last question. What are the top challenges about running Airbnb for you?

Julie  23:55  

Top challenges. I’m sorry, I don’t have a quick response. There are always challenges. You know, definitely when things break, it is tough. And it is impossible. I had a water heater stop working, and I can’t make a guy up here today and I want to, but they had to wait a day and I felt terrible. Um, but you know, there’s always stuff definitely comes up even though we try to be perfect, but I am probably an over apologizer and I have really found that if I’m telling them I’m so sorry. You know, I apologise like 28 times, and I do my best and I keep communicating with them. But that’s probably the toughest because I want their state to be perfect and you just can’t always deliver that I mean stuff does happen. And I and I have to say if you don’t mind my throwing in one more story. One of my proudest reviews honestly is the first review I ever got on my Starfish House. We were in the middle of rehabbing it, it was nowhere near ready. It didn’t even have a kitchen sink. And we had a huge hurricane hitting Florida Hurricane Irma. And it was coming right for Tampa. And I said people are going to need this house because people were evacuating like crazy. So I put it on Airbnb the Starfish House my second Airbnb that ever did. And I didn’t put the price for a house. I think I charged maybe $135 a night and this is for a three bedroom home. Right? It was pretty good sized house on five acres. And I said look, it’s not ready. I had mattresses on the floor. I don’t even have beds, okay, I got mattresses. I had one couch. And as people were evacuating Savannah, I was at Home Goods buying sheets like it was kind of crazy, but I just had a feeling someone’s in this house. And I was very upfront with them. It doesn’t have a kitchen sink. I hadn’t had a chance to rip out the bathroom yet. Like it had an old bathroom. I said but there is a washer and dryer there is electricity, there’s running water, there’s beds or sheets, you know. So I had two families in there actually for this hurricane. We lost power. So I ended up with my home and then the two homes nearby which are both there being these I had three or five families, I want to say I was responsible for no electricity. We’re in the middle of a hurricane. We’re kind of on the outer edges of the hurricane. But we got through it. We took generators, we’re taking care of our guests. I mean, we did everything we possibly could. And we got five star reviews for our people. Like I, I was so proud of that, like the guy wrote me just the nicest review and I was like, Oh, my word, the house that didn’t have a kitchen sink. And I got a five star review, but I really did my absolute best for the people. And they knew I was not trying to take their money I just wanted to get keep them safe, you know, for the hurricane and I was I’m just really proud of that. So stuff can happen where you don’t have a kitchen sink and you can still take really great care of people. So you know, just don’t ever give up. Keep being a hustler. I’m a hustler.

Jae Seok An  26:48  

Yeah, that’s nice story. Thanks for sharing.

Categories
Podcast

Into the Airbnb EP 13: ‘International jungle’ 1BR with 80% occupancy rate in Washington, DC

Welcome back to another episode of ‘Into the Airbnb’. Today I’ve spoken to an interesting Airbnb host named Becky. She’s been an Airbnb host since 2011. And now she has four listings that are managed completely remotely, where she visits those properties only once a year. She is now hosting guests in her living room in a one-bedroom apartment in Washington DC, which covers her monthly rent. So we are going to talk more about this specific listing in this episode.

This episode is brought to you by Airbtics, a precise Airbnb analytics platform. If you’re just getting started with Airbnb and want to find out objective information about occupancy rate and daily rate of your area, this is the app for you.

Summary
What was your first Airbnb rental? 0:54
Airbnb listing in Washington, DC 1:21
Buy-to-rent or rent-to-rent Airbnb properties? 5:20
Managing other Airbnb listings in Texas and San Francisco 5:20
Breaking even: Airbnb rental property monthly revenue 9:27
Occupancy rates: pre-COVID vs post-COVID? 14:09
Creating a unique experience for guests 16:20

What was your first Airbnb rental?

Becky  0:54  

My first Airbnb rental was in San Francisco, California about 2011. One bedroom studio in an apartment complex with probably 50 units in Nob Hill, which is about a 10 minute walk from downtown San Francisco. It’s probably about 100-year-old building one bedroom studio with a Murphy bed but a hot tub.

Airbnb listing in Washington, DC

Jae Seok An  1:21  

Hmm, interesting. So yeah, I saw that you have a very interesting listing right now in Washington DC, where you’re actually staying as well. So when did you start that listing?

Becky  1:33  

I started that back in September. So very recent, probably less than a year and the reason why I started that is because I was in between jobs and I wanted to supplement my income. But I wasn’t expecting any hits because I thought who would really want to stay at an Airbnb in a shared one bedroom den, thousand square foot. So if I wanted to make a listing, the only thing that I had going was a good location right I’m about two blocks away from the mall all in free museums and so I had to really think about my listing and how it’s going to be different from everybody else. So that was just recent and then since then I’ve sort of, you know, became a super host I’ve gotten a bad from that have gotten my incredible reviews, etc etc. So yes, that’s my shared shared I call it the title is international jungle stay

Jae Seok An  2:35  

Yeah, international jungle is because you have like, unique items from all over the world. So what kind of items do you have in that house?

Becky  2:45  

Yeah, so I have kind of mix of both. So I bring things from all over the world from from my travels. So I have things from beautiful paintings, you know, kind of memories from travelling, but it covers a wide range from countries from Middle East, you know, from Africa, to China to Asia to Morocco, so it’s kind of part of the experience so it’s relatable to a lot of international you know, travellers who want to come here and that’s the kind of the first thing that they connect to. The second thing I think I do really well is because I call it a jungle I bring the earth inside my apartment so if you come into my apartment and you see for my pictures it’s not a standard you know Airbnb house with a you know, with a bed and a couch and you know, that amenities actually sell the jungle part, which is all the beautiful plants that I bring from all over the world. So when you come in and looks like a tropical paradise. I even have a hammock that you can sleep on in the living room that goes wall to wall. And then I have things from the earth like I have pillows, like pillows made from you know, beautiful from flowers and then I have a little water fountain. I even have an herb garden and like things that are made out of reclaimed wood out of art so if you can sense it you know when you first come in you really sense…  the most commented things on my Airbnb is ‘Wow Becky, it’s so Zen in here’.

Jae Seok An  4:19  

So ‘Zen’… Z-E-N, what does that mean?

Becky  4:25  

Zen, it’s like very peaceful and spiritual.

Jae Seok An  4:28  

Yeah, okay. Yeah, I see. Right. I see. 

Buy-to-rent or rent-to-rent Airbnb?

So, you started this Airbnb listing in September. So did you just rent this place to do an Airbnb or did you buy or how did it work?

Becky  4:44  

I actually I’m a renter in my place, and so I rented my space, but I happen to live in a condo that you can also there’s also owners. So yes, the other properties I own or I mean are 100% ownership, this is the only place I rent because I actually work

Jae Seok An  5:02  

Yeah. Okay, interesting. So, did you move in first or did you start Airbnb, like as soon as you start living [there]?

Becky  5:11  

I moved in first. I’ve been here for about four years and then I started Airbnb, but I had an Airbnb before that, and then I decided to list my place.

Managing other Airbnb listings in Texas and San Francisco

Jae Seok An  5:20  

Right? So you are managing, like Airbnb in different locations like Texas and San Francisco?

Becky  5:29  

Yes, yes.

Jae Seok An  5:30  

Okay. So do you have any like, how often do you have to visit those Airbnb listings in San Francisco and Texas?

Becky  5:43  

Actually, not that often. The reason why I say that is because my Airbnb usually gets booked, you know, like almost a over 90%, sometimes hundred percent. So I would say Texas, I go about once every three months to six months. And then in San Francisco, I go maybe once a year.

Jae Seok An  6:06  

Once a year. And the property has been remained, like, properly cleaned and everything right?

Becky  6:13  

Yes. I have a whole turnkey operation. Very easy to do. Started in San Francisco and yeah…

Jae Seok An  6:23  

How does that work? Do you work with like, third party agency? Or do you do it yourself? Like, did you hire cleaner privately?

Becky  6:31  

I actually like doing it myself, because I like to know the quality of the service. So it’s kind of like a test thing at first. And so like, for example, in San Francisco, I wanted to find out who would be a good cleaner, someone who’s reliable, right? Consistent. And so it really started with that. I think you can hire a third party, but I just don’t know any third parties out there. So it depends on what you need. But you know, for example, the one in Texas. I kind of gotten, you know, like a good cleaning service that between two, two people right, two kind of companies, small companies. And the rest are like if anything needs to get fixed, I really have one person that I completely rely on if I need to. So it’s actually very manageable. I do things like I have a keyless entry, as well in my property. So I don’t even have to be there. I just open the door by my phone.

Jae Seok An  7:28  

I see and everything is like automated so you don’t have to be there at all. You can do it remotely. 

Becky  7:36  

Yeah, yes. And it’s not. It doesn’t work for everybody. But it has to be it depends on the property, I think.

Jae Seok An  7:42  

Right? Have you ever had any kind of incident where you really have to visit there?

Becky  7:48  

I do when it’s like in between, like renovations. Yeah, I’ve had one incident. So when I actually come down to Texas, just to make sure everything was good, but actually haven’t had any really horrible guests. Actually, I actually, I actually clean my guests a little bit as well. You know, I don’t I don’t, I’m a little different cuz I work remote. I mean, I’m a remote. So I, every time I list my properties, I always don’t do an automatic booking, which doesn’t work for me. Right? I do it where I actually allow them to ask for it. Then I pre-approve by looking at their listing I actually asked, I normally have kind of my own criteria, you know, for, for picking people. Most of the time I pick them. Yes, it’s a yes. But, you know, there’s there’s one or two red flags that I don’t you know, pick the, I don’t accept it, but it just really depends. Like zero. Like, you know, no history. It’s like renting with someone with no rental history.

Jae Seok An  8:53  

Right. So don’t accept if someone doesn’t have any history.

Becky  8:57  

Yeah, I’m probably more leaning on the No, you know? And then and I think that’s just worked out for me, yeah. 

Jae Seok An  9:07  

I see do you ask any, like a follow up question before? Like to screen the guests? 

Becky  9:14  

Um, the only thing I like to know is like, who’s coming and how many guests. Really basic and the reason why, you know, and it’s really more for curiosity and nothing more.

Breaking even: Airbnb rental property monthly revenue

Jae Seok An  9:27  

Okay. I see. All right. So I think what people, the audience are gonna be really interested. Is that how much you’re actually making from your own rental property? Because you’re living there and how much is your rent per month?

Becky  9:43  

Yeah, sure. My rent per month is 1850.

Jae Seok An  9:47  

Right?

Becky  9:50  

Ah, so that’s not including utility. So I would say breakeven like 2100, right. 2000-2100, just depends on utilities. I make a range when I’m listing it for myself, just outright with myself. It’s about, I list it for about 120 per day, which is about you know, I think over $3,000 right? 3700. And when I’m here as a shared, which is the majority of time, it’s about, I put it in a $70. And that’s about 2100. So I pretty much I’m sorry, 70 to $80 per month, I’m sorry, per for the rating. So I definitely break even on the low side, or I make a little bit of a profit. Does that make sense?

Jae Seok An  10:41  

Yeah, that makes sense. So breakeven means that your Airbnb revenue or profit is going to cover your rental completely. That’s the breakeven for you. Right?

Becky  10:51  

Yeah. breakeven like it. But based on like, um, you know, based upon, depending on what my goal is, right, so I think they’re breaking even, and I have increased it as well. So it depends on seasons off, right? Yeah. So what might give you that number is on the very low side, right? I’ve actually listed it for, you know, 80 to $90 per day shared, and it’s, it covers it, it depends on also on, if I want to be here 100% right, depends on the occupancy. So it actually works out well. And, and given the test market that I’ve been doing this since September, it’s actually working out well. But I’ve also underpriced myself, you know, so I’m learning as I go, right. So I’m giving you early market data.

Jae Seok An  11:36  

Right. So until now around how many like percentage of the days that you’ve stayed there while Airbnb guests are there?

Becky  11:48  

I was saying the percentage, I would say, mean shared or are shared. I would say 70% I’ve stayed here when it was a shared listing.

Jae Seok An  12:04  

I see and rest of the 30% or you’re, you’re away.

Becky  12:11  

Yes. And it’s usually the ones that are like, booked over a week. Does that make sense? I’ve had bookings. We shared you would be surprised for over a week. And I might just kind of leave for you know, a couple days and, you know, go somewhere else.

Jae Seok An  12:28  

I see. So do you like, sounds like you decide your travel plans based on the Airbnb bookings you get?

Becky  12:39  

Yes, I do.

Jae Seok An  12:40  

Okay, I see. That’s, that’s really smart and interesting that that concept can work. So you’ve been breaking even, like for past, since September. And okay.

Becky  12:55  

Yeah, yep. And some months I like even make more, right? Just depends on the request and when right so I kind of, I kind of also do test things on Airbnb, the code smart pricing on there as well. So you can figure out you can put that in advance in your calendar and you can see people coming in and requesting your Airbnb instead, right? So I kind of do that as well like putting it out a month or two out, just to see. And then I adjust my kind of just my, you know, what I want to do, it just really depends. It’s really interesting because like, with all the data analytics now, I mean, that helps. However, you know, I can’t predict when people want to stay, but I do. I do can control what I can control with my listing.

Jae Seok An  13:43  

I see. So, do you also do cleaning yourself for these property?

Becky  13:50  

Yes, and no, most of the time I actually hire somebody. And honestly, it’s not really much difficulty in cleaning this this place. You know, it’s not a huge house, but most of the time I hire somebody and sometimes I don’t. But definitely It comes with a, you know, if you look at my pictures, it looks super clean. Right?

Occupancy rates: pre-COVID vs post-COVID?

Jae Seok An  14:09  

Right. Yeah. Okay, great. All right. So also wondered, so since September, how many of the night? Like what was your occupancy rate? I’m talking about like before the COVID-19.

Becky  14:24  

When people I would say meaning, I would say it was probably around 80-85%. It was, it was pretty good. Actually, it was pretty decent. And then COVID, obviously nothing, right? I actually unlisted it. But I also listed it recently as 100%. You know, you can take it over. Okay. And so, I’ve gotten one or two inquiries, but not a lot. I think we’re still in that situation a little bit. People aren’t ready to travel so much.

Jae Seok An  14:56  

Right. Okay. That’s clear.

Becky  14:59  

However in my other properties, like in Texas, people are ready to travel there, you know, it’s really state to state. So I’ve got 100% occupancy there, like 90 to 100%. It’s very high, because everyone wants to move there or, you know, or, you know, depends on the city. So it’s very interesting. It’s different.

Jae Seok An  15:18  

Right? So, what’s the situation in San Francisco in contrast to for in comparison to Texas?

Becky  15:29  

San Francisco right now is actually 100% occupied, I’ve actually had very long term folks that want to stay there and a lot of travellers want to stay there for business or like for work, you know, the inventory and go other properties are very high. There’s little more restrictions in terms of like how you list specifically in San Francisco with occupancy, tax, you got to list it as a business. So it’s a little bit more challenging, right. But I was kind of grandfathered in and done it for 10 years, that my listing has been UP for 10 years, but so my listing there. The difference is it’s I have someone staying around for the next six months. So I don’t really have to worry about and part of it is because I’m just not a lot of inventory. I have a really good listing and the way I listed it, you know, people kind of scoop it up. I’ve got it scooped up in about a day.

Creating a unique experience for guests

Jae Seok An  16:20  

All right. Yes. Oh, what’s the like unique things about that? The property in San Francisco like, how did you do differently?

Becky  16:30  

Yeah, so I listed… Well, it’s a one bed.. it’s a studio apartment with a Murphy bed and one of the things I listed it was the features of the apartment. So like gingerbread, I listed two things that are unique. I have a hot tub there. Yep, I have bamboo floors and a beautiful kitchen where you right near a farmers market. So I kind of talked about… I give a little glimpse of, of what the user can use the apartment for, right. It’s great location. You’re trying to town you can cook big meals. You know, there’s a it’s beautifully decorated as well in terms of like the furniture in there as well. So what’s unique about that we, we it’s right near Nob Hill. So there’s a lot of history to the building as well. Going the elevator right in there. You have to go into one of those gated elevators. So you pull like a ricochet elevator. Right?

Jae Seok An  17:25  

Okay, like you have to like open the elevator

Becky  17:28  

So I actually show pictures of that look like you’re walking into a building that is like 100 years old, but has modern features in the middle of Nob Hill. So I kind of listed it like that. You know, I have a church like stained glass windows in my apartment, like as one of the door features. And so I show those little things that yeah, I think they really appreciate that. It’s very unique to San Francisco. You know, when they think about San Francisco, they think of those big beautiful houses. So like the gingerbread shells is very unique to San Francisco, I’m 10 minutes away from a lot of different things. So you don’t need a car and you don’t need, you know, you don’t need to use public transportation. I also leave things like little things that make it easy for them to get around. Like I leave them a subway card, road, free subway car, they put money on it, and it’s very convenient by it. So they, they make it easy. I put a little book of history of San Francisco in the house. And so they kind of know what to do. So it’s just little things like that, but I think the key is is you know, great pictures indication of like what benefits are there and you know, and kind of envision what their stay is like already. Does that make sense?

Jae Seok An  18:54  

Yeah, that makes sense. So like you described it really like in details, showed the pictures which They’re like, description as well.

Becky  19:02  

Yeah, you can put a manual together and all my properties, I put a manual in the bottom Where, where, you know, I describe like things. So things to see things off, I do it a little bit further. For example, in DC I have a separate manual for best top 10 Instagram pictures in DC, and I throw it show the pictures and they it’s like a little scavenger hunt. So they get to go do that. And so, you know, I was gonna do that for San Francisco. Just go next, but someone’s staying there.

Jae Seok An  19:31  

Yeah, I think that Instagram is a really good idea. But are there like specific demographics that are more interested in your, like, style? 

Becky  19:44  

I would say yes. So for example, the demographics like in DC is definitely the short term vacationers who want to visit DC. You know, I get a lot of the folks that are here for business short term conferences. We get a lot of that, you know, two, three days stay. In Texas, I would say it’s more people, you know, moving there, like short term stays that are moving. They’re in transition in their house. You know, they’re either transitioning to a city or they’re transitioning in between homes. So I, that’s why my bookings are up a month, two months 100% occupancy, right, but short term. And then San Francisco, I would say, it is definitely more of a long term stay, I would say. And partly because of their strip, you know, it’s just a part of the restrictions to this, the inventory is different. And so I have a lot of folks that are wanting to work there. Find a place so I provide them a you know, I provide him a place to stay for a couple for a couple months and they end up staying almost like a long term lease. I don’t really have to worry about that. Does that make sense? 

Jae Seok An  20:55  

Yeah, that totally makes sense. Yeah. And earlier you’ve mentioned that you are looking for new properties to on Airbnb. And what areas are you looking for? And what kind of criteria do you have?

Becky  21:10  

So my next criteria actually feels like is is I want to do. I think the next big thing for me is doing a even more unique experience like, like a teeny home or tree house. So I’ve been looking at properties that have that, like potential or, or like a place where it’s near certain features or location where people go down there, travel will be a short term stay. Yeah, it’s also a part living in that space like it but it has to be a unique space. It’s not going to be any house that I buy, it’s going to be I might build it or I might come up with a different concept. It’s going to be either a tree house tiny house, with like, with smart home features, like

Jae Seok An  21:58  

I see, are you thinking about any like location, location-wise?

Becky  22:04  

Yeah, I actually have been looking at warmer locations. I’m going to try that next. So I’ve been looking down and I just started so I’ve been looking down and actually like Carolinas Florida that area.

Jae Seok An  22:16  

Yep. Yeah. I see. Yeah, I also wanted to ask you this since you are sharing your leaving space with on Airbnb guest as well. Like, not all the time, but like, 70% of the time. How do you find it?

Becky  22:39  

Um, you know, I didn’t have any expectations as ever, maybe it’s gonna be a little bit, you know, a, you know, an adjustment. But it actually has been such a positive experience. And the reason why is because I’ve met people from all over the world. From like minded travellers. You know, who love You know, the most most of them are foreigners international because I book as an international jungle, I do have a Americans as well but it it has been so positive. I’ve met people from you know, come here for their conferences, I just have very unique jobs, from all walks of life, different age groups, we’ve had meals together in our kitchen, you know, it’s not a requirement, I say that I’m not going to really be here and vice versa, but if it happens to be that way, great. I’ve actually been their Uber before where they’re, you know, where they, you know, didn’t know how to go to the Monument. So I gave him a ride, you know, like things like that experiences. It really has evolved and I didn’t expect anything from it. But the appreciation that I get from just I think that there is a hospitality component of it. You know, it depends on how involved you want to get. But the reviews I’ve gotten have been like ‘Becky’s been the best host I’ve ever had’ or like This and that I think it’s part of the experience. So it really depends, but it’s been extremely positive some of the guests, I still keep in touch with as well. So I hear from them a lot, you know, when we keep in touch on Instagram. But I have had, I have not had any bad experience, if anything, it’s been only positive. You know, and very unique and people that I think the best part is that these people I would never meet in my daily life, you know? Yeah. So I think the most unique person I’ve met was someone who came here to look at who’s coming here for the Smithsonian. Right? And he’s here. He specialises in dinosaur bones, photographing them. You know, he’s like a scientist. So he was coming here to photograph these ancient bones that he had to report back to his nonprofit. So the times that I we spoke, it was about these dinosaur bones that he was looking at, I would never met him on the street.

Jae Seok An  25:00  

Yeah, that’s the kind of experience that you can only get by doing this kind of like, rental house.

Becky  25:07  

Yeah. And I love it. So, you know, it’s it’s you gotta have you have I think it has to be a unique, unique stay.

Jae Seok An  25:19  

Yeah, yeah. So you also told me that you are doing a side business where you help other Airbnb host to have some like unique decorations and items.

Becky  25:36  

Yeah, I have two things that I do to help other Airbnb hosts I, I do I do digital design websites so I actually do a direct booking website for them. If you need it, you know, that’s a supplement to Airbnb. It offers them an ability to control their website, their booking their content and come up with those are the best… The customers that I have are the ones that can’t come up with the content or don’t know how to go about that. And so I, I built this custom based website for them. That is easy. They can do direct billing, direct bookings, all from their phone, his mobile app and also direct, I suppose, do their search, search engine optimization. So it lists them on a high ranking if they do that. The second part I do is, kind of new, is curate my Airbnb, which is really the curating the like the furniture, the pieces in your home, like little things that you can purchase that might make your Airbnb a little bit more, you know, interesting. So that is coming to play. And it’s, it’s funny, it’s a request that I’ve had from some of my customers saying, ‘gosh, Becky, I wish I had your ideas of this’. XYZ or whether it’s furniture or things like that they could purchase it because I purchased it from my website. That makes sense? 

Jae Seok An  27:02  

Yeah, that makes sense. And I’m just curious, like, what kind of tech stack do you use to build a customised website?

Becky  27:11  

I actually use, what do you mean tech stack?

Jae Seok An  27:14  

From hosting to from building like WordPress…?

Becky  27:18  

Yeah, I do. I actually do a couple I can do a Wix, WordPress or I can do you know, there’s so many that you can use a GoDaddy you can do a couple, it just depends. This depends on the customer and how complex they want it right. They want to let you know you can do that on WordPress pretty quickly just depends and it also depends on the on how, how much they want to manage, right or how easy it is to manage. So I try to tailor it towards that.

Jae Seok An  27:48  

Right? So do you also listed your listings on your personal website, private website?

Becky  27:55  

I have only for my DC, I don’t need to do yet for my Texas in San Francisco, so right I but I will. So depending on what happens in the future with Airbnb, I might do that on separately just as a test. I mean you have nothing to lose, right? Yeah, yeah. Nothing to lose.

Categories
Podcast

Into the Airbnb EP 12: Gross 50% rental yield. A tiny mobile house in Oakland, CA

In this episode, we have had a chat with an Airbnb host from Oakland California. His name is Ansel and he owns one mobile house. Here are Some quick facts. He has been achieving above 90% occupancy rate. He makes about $20,000 per year from a mobile house which is valued around 40,000. It’s an incredible return on investment. 

Summary!
How he got started with Airbnb rental 0:52
Occupancy rates & and his experiment with different pricings 2:34
Revenue is around $3,000 13:15
Net profit is around $1,700 14:13
How much would it cost to buy a tiny mobile like this in Oakland. 17:08
tiny-house-oakland-airbnb

So tell me, how did you get started with running your rental on Airbnb.

Ansel 0:58
So one of the things That when I started I I was focused on the tiny house because I knew that nobody else had a tiny house in my area like an actual tiny house on wheels, the car you see on TV, and the thing about my location is that it’s not the ideal location there’s not a lot of places to to go either on bars. So if you’re looking for location most people would rent in another area right? So I asked myself what what else can I do to not necessarily compete but set myself apart? Because I’m dealing with the location issue. Now. I never had any issues with bookings, but I wanted to raise my price. So what I did was I did some research and and I determined that my tiny house needed to be Instagram bubble, right. I needed it to be Be a place where people wanted to take pictures, pictures, pictures, pictures. Now they already took pictures, because it’s a tiny house. But I decided to redesign my interior. I put up artwork, I painted for walls, new furniture, and I made it made it pop, right. I wanted people to say wow, like I really wanted to blow people away. And so when I did that it worked. To where I was, I was able to go from $60 a night to 90 a night.

Occupancy rates of his Airbnb listing in Oakland (CA) & and his experiment with different pricing

Jae Seok An 2:34
Right? Right and feature was it? Excuse me what year yeah 2019 right. So that’s when you first listed your that tiny house on Airbnb. 2018 is when I first listed it, right?

Ansel 2:52
And then a 2019 is when I remodelled it and then I raised the prices. I’ve been a super hostess My first evaluation period that was that was pretty easy because I do a lot of really big on cleaning and I only have one listing. So it’s easy for me to control quality control. Right, right. And once once I did that my occupancy rates Well, I could I could run at 100%. But I did more research and I realised that it’s better to have those higher price bookings. And, you know, if you’re, if you’re at 100% occupancy, your price is too low. That’s what they say. Right. And so in doing that research, I was able to, even when I raise the prices, people would still book so I kept raising the price right? In trying to find that sweet spot, but I never used any of the automated price. I never use any of the tools like the Airbnb has a tool And then there’s a, there’s a couple other platforms where they’ll adjust your price for you, I forget what they’re called. But out because I only had one listing, I wanted to do everything myself. And I also because I work full time as well, right, and I have a son, I didn’t want to overwork myself with cleaning because I didn’t outsource my cleaning. Because I feel like that was one of the things that would have really, really, really, really wanted to maintain my my five star rating. And I was afraid that if I hire someone, they wouldn’t clean it. The way I would think about entrepreneurship is sometimes you have to get out of your own way. Right? If you want to scale up, you have to outsource things. And because I wasn’t in the process of scaling, I never outsource my cleaning. So I increase my minimum, my minimum nice day, right and when I did that, It made it easier for me.

But then

my son’s mother, she had resigned from her job. And she had, you know, a lot of free time. I said, Hey, do you want to, you know, help out with the Airbnb? And she said, Sure. So then I went back to, to allow one night bookings, but I raised the price, right? So if you’re going to book one night, raise the price. If you booked for more nights, there’s going to be a discount. But to my surprise, people were booking at that ridiculous price.

Jae Seok An 5:35
Right? So what’s the discount that you’re giving if people book for more than a diet?

Ansel 5:42
at that? Well, right now it’s different, right? COVID-19 but at that time, I was, I want to say like 20% 15 10% so it wasn’t a lot, right. But I wanted to make it you know how to do it. value because a lot of people are looking for price, right? There’s some people that want to try a tiny house. And then there’s, you know, avid travellers, they’re trying to look for the best price. Right, in a clean space. So it was that it was that balancing act, you know, wondering, are people coming to me for the price? Or are they coming to me for the experience? Right. And I determined that the experience that I offer superseded price, right there were there was the market allow for a lot of people who really want to try out a tiny house, right. So people who are looking to save money. I didn’t have a problem because there were so many people travelling to San Francisco to the Bay Area. We have so many people travelling that that I didn’t have to worry about. I kept figuring out that I can continue to raise and raise and raise and then I got I got featured in the local news. They did a story on my tiny house. So I was able to raise the price again.

Jae Seok An 7:06
Right? So how much did you raise? Like?

Ansel 7:11
So I was at the highest that I went per night was 130 and night for days where there was like an event, because I told you, I’m next to the Coliseum. So for like concerts and stuff like that, that’s why we’re but on average, I was between 90 and 100. And remember, I started at 60.

Jae Seok An 7:34
Right, right. So when you’re at 9200, how much of the occupancy rate is you managed to get?

Ansel 7:41
I want to say I was at about 90%. occupancy.

Jae Seok An 7:44
Well, still, you’re at that. Yeah. Yeah. Why don’t you increase even further?

Ansel 7:51
We said why didn’t there? Yeah.

Jae Seok An 7:54
COVID-19. All right. So you’ve been increasing and increasing and then the pandemic hits. Yes, yes. Okay, so what’s your currency trading now? Because I had a look on your calendar and similar night or

thousand dollars a night. Next?

Ansel 8:11
Well, the reason why I did that is because, well, I’m in the process of deciding do I want to shift to long term,

Unknown Speaker 8:23
right?

Ansel 8:24
Or do I want to stay with short term I’m definitely not doing any one or two, I think it’d be my minimum is going to be at the minimum, five or seven days. But because of the pandemic, I bought an ozone machine and ozone machine is supposed to kill anything in the house is very toxic. You can’t run it, whether it’s you know, plants or animals or anybody inside the house. But if you run the machine, it will kill anything and then you have to air it out. So I want to give myself at least three days between guessed right. And I also wanted to give myself some time to figure out what’s going to happen. So the reason why I set it at 1000 is because I don’t want to block off my calendar because I still want it to show up. And people searches, but I know nobody’s gonna book it right. So I still have people looking at it like, what the hell? Why is this $1,000 and they can feel send me a message and inquire but this is just to give myself time to really look at the market and decide which way I want to go because I really, really like Airbnb. And then I can easily put a long term tenant in there outside of the platform. Right But um, I like the platform a lot and I’m in the process of becoming an Airbnb plus, right. They started to actually have my inspection day was supposed to be this week. But the lady who was scheduled to do my inspection for Airbnb, she got laid off. Oh, so I don’t know what’s happening that Airbnb. But they laid her off. And I made all these improvements You know, there was only a few they only asked me to do a couple things to make it Airbnb plus already. Yeah, now I’m wondering like what’s going to happen with the plus programme? Because I don’t know. But the reason why I put in 1000 tonight is because I want to I want my calendar to be clear whenever I decide to you know, whenever I’m whenever I’m going to do so I still have a couple people holding on and I’m giving full refunds if they can’t if they ask me soon enough, but if they wait to the last minute because my my, my cancellation policy has is strict. And I I set it as strict because I don’t want people to book and wait to the last minute and then cancel. And you know, I only have one listing. Right, right. So now I have five days to try to fill that slot. It doesn’t work for me. Because I am confident that my listing is so cool. It has that cool factor Instagram factor that strict. It never stopped people from booking. Right. But for the people that booked in I had it set to strict. I’m still honouring those full refunds, if they can’t if they if they contact me with Apple time, you know, but some people don’t want to cancel, they want to wait. So I said I won’t be able to honour the full refund if they cancel at the last minute, right, but if they want to cancel now, I don’t know those refunds.

Jae Seok An 11:37
Right? I see. Yeah, you’ve mentioned that you were in the process of keeping increasing the price to like see what’s the sweet spot of the open rate versus price. Are you planning to do that again when the pandemic over? Yeah, as

Ansel 11:57
soon as the pandemic hit, I immediately drop my prices, right as nobody travelling, so I looked, I dropped it really, really low. Because you know, that’s just the market, right? If you want to get booked, right got to drop those prices when when the pandemic ends hopefully soon. I’m going to go by the market, right? I’m going to, you know, basically I’ll start off low, and then and then it is getting booked quickly, then I’ll raise it right. Because we don’t want to be at a I don’t want to be 100% occupancy. And then also because I you know, it’s on my property where my house is right next to it. And it’s kind of good to have a few days where I can do some deep cleaning, or just not have you know, guests coming because every time I have guests, I’m kind of on edge, making sure that things are perfect. I want them to you know, I’m really you know, serious about my ratings. So, I’m always making sure that they have everything they need. I give a lot of extra stuff. frozen food, instant ramen, water. Beer, I give a lot of extras because I really want them to have a really good experience, right? something different than the normal, right?

 

tiny-house-oakland-airbnb-2

His Airbnb’s revenue is around $3,000 per month

Jae Seok An 13:15
Yeah, I see. When you said you had like a 90% occupancy rate, then at like hundred dollars per night, that’s around $2,700

revenue per month.

Ansel 13:31
And also higher.

Jae Seok An 13:32
Or even higher than that. Yeah. Including the light cleaning fees with additional gas. Yeah, yeah. Right. So how much was it around?

When you’re at the pink?

Ansel 13:45
I will say 3000.

And that wasn’t even 100. Right. A couple of days blocked off. Right? Yeah. And the know how much can you earn if you put that into the Long Term rental in that, oh, I will only be earning, you know, maybe maybe 12 to 1300 a month, like, you know, less than much less than 50%.

Jae Seok An 14:13
Okay, so like after $3,000, like how much of them? Are you spending on, like painting pay for the cleaning fees paying for supplies?

Ansel 14:24
I would say

I would say

about about 1300.

Jae Seok An 14:35
About 1300. So that’s around 1700 after like everything right, right. Yeah. Which is still higher than Yeah, much higher long term rental. Okay. Mm hmm. Are you thinking about like running a few more Airbnb properties because you’re doing well?

Ansel 14:53
I am exactly I’m actually going to buy another tiny house. I have. I have space on my property for two more tiny house. Okay, yeah. So and then I also have a studio I converted my garage into a studio. So I have a long term tenant in there. She’s a long term tenant. They’re a tiny house Airbnb and and I can get two more half space for two more tiny houses. So I’m definitely planning on doing that. I’m just waiting for the market to see you know, I want to get things at a discount, right? now’s a good time to buy stuff at a discount. But I also want to see what’s going to happen with travel. Right?

Jae Seok An 15:32
So yeah, so about the two of two houses that you’re thinking of by easy like we’re in the same building as your house.

Ansel 15:40
Yeah, but these are gonna be smaller. So mine is a my tiny house is 25 feet long, right? lumen, there’ll be 14 feet long. And then they’ll also have composting toilets, right? So it’s gonna be a little different.

Jae Seok An 15:54
Right? So are you we I don’t really get it. So are you buying the new

house? Or is it our already waiting you’re building.

Ansel 16:02
Oh, so yeah, I’ll be buying the tiny houses. They’re on wheels. They’re on the trailer.

Jae Seok An 16:07
Okay, yeah, so moveable house?

Ansel 16:11
Yes. Yes. They’re on wheels. They’re built like a regular house, but they’re on trailer. So we buy it, and then they deliver it and then I park it.

Jae Seok An 16:20
Right. Wait. So this house that you’re renting on right now is also the movable house.

Ansel 16:27
Yes. It’s a typo right

Unknown Speaker 16:29
there. You meant

Ansel 16:31
tiny house on wheels.

Jae Seok An 16:32
Yeah. Okay. Wow. Right.

Like, how does that

work? Do you have to also buy the right to like,

Ansel 16:39
park? No, no, no, it’s not my it’s not my property. So technically speaking my neighbor’s there was a time where they could they could petition the city to say that it’s a blight, you know, an eyesore yet, but I don’t live in that type of neighbourhood. As a matter of I have a nicest house in my neighbourhood. And my neighbours love me. So it’s not a blight per se.

Jae Seok An 17:08
Okay, and so do you mind sharing how much it would cost to buy a mobile like tiny house like the one you have.

Ansel 17:17
So mine’s right now probably be the one that I have right now probably 50,000 maybe a little less because of the market. And also depends on where you buy it. Like where in the United States where you buy it from, because things are cheaper on the east coast and down south and I’m on the west coast in California where the cost of living is more expensive, everything’s more expensive. But right now, I can get a 14 foot for 18,000 and possibly less if I do some of the work if I tell them you know, don’t paint it. Don’t you know, if I just get the shell and I tell them you know, I want to do the cabinets and stuff and can be cheaper. So I will be able to add two more listings for about $40,000.

Jae Seok An 18:08
Wow, that’s really a great return on investment because yeah, making around $20,000 per year.

Ansel 18:15
It cost me 35,000 to buy at the first one. Yeah.

I can’t think of any any other ROI like that.

Jae Seok An 18:24
Yeah, that’s, that’s really crazy. Yeah. Yeah. Finally, what are the top challenges about running Airbnb with the tiny house with the mobile house?

Ansel 18:38
I say that the, the challenges are

cleaning in and because it’s a smaller space. You really have to make sure you have to get into the tight spaces and clean right it takes a little while. It takes a little longer to clean. It I say about about a minimum two hours.

Jae Seok An 19:07
Right?

Ansel 19:09
Unless you’re rushing, right.

But I don’t have anything to compare it to, I would say cleaning. And

other than that.

Yeah, that’s the only the only challenge that I’ve had is, you know, making sure that I

Jae Seok An 19:26
give myself enough time to clean. Okay. Yeah. And then. Yeah, that’s it. All right. Yeah. I think you’ve got a really, you found a really nice,

good investment vehicle. Absolutely.

Yeah, that was it about the interview. Okay.

I appreciate you. Your appreciate your time interviewing me. Yeah. I thank you so much for sharing your story. And thank you for being on here. All right. All right. I’ll talk Do you agree? All right, thank you. Have a nice day. Bye bye, YouTube.

 

Categories
Podcast

5 Airbnb rentals in Kimberley, Canada (95% Occupancy Rate)

Today’s guest is Michelle. She runs 5 Airbnb listings in Kimberely in British Columbia, Canada. This town is well known for its ski and golf resorts. The occupancy rate of her listings goes up to 95% during the high season like Summer, and down to 50% during the low season. During the high season, the net revenue is about $3,000 per month for a 2 bedroom apartment.  For your reference, a quick google search shows that a 2bedroom apartment in Kimberely is between 150 – 200k USD. 

airbnb unit in Kimberely

Podcast summary!

  • How Michelle got started with her first Airbnb rental 4 years ago 1:04
  • Occupancy Rate during high and low season 5:21
  • Revenue during high and Low season. 6:08
  • Airbnb rental starting cost 8:36
  • Impact of Covid-19 in her Airbnb listings 10:15

Full Interview Transcript

Jae Seok An  

When did you start your first vacation rental?

 

Michelle  

It was almost four years ago now. We had been talking with some people that were renting out a year of all things on Airbnb that it was their, their home, but they decided to rent it out on Airbnb and rent a place for themselves long term because they made more money renting the yurt out. And you know, we we heard about that, talk to them about it. And then about a year later, we had one of our apartments our long term rentals came available and we decided as an experiment to try the Airbnb because we’ve had some really bad tenants and our laws and BC are very very stringent on evictions and getting people out. You just can’t they have more rights than the landlords. So we decided to experiment and see if we Airbnb at least if they’re bad, you know, they’re gone in two days. Yeah. So that took off like, like, we, it was unbelievable. We couldn’t believe how, how fast it booked up. And we didn’t we didn’t know we could make a lot more money than we were making. So that was a bit of a surprise to us. And so I think a month later another of our units came available. So we just put that on and we haven’t looked back as soon as you know, people of course, we didn’t push anybody out. But as soon as they moved, we just didn’t rent it out. Again. We just put it on Airbnb.

 

Jae Seok An  

Right. I think See? So how many properties were you renting out or long term before?

 

Michelle  

Just to start with it was four, right? But we renovated our building, and we now have five that we can rent out. We live in one. So there’s six total units. But we’ve created another unit as a direct result of our success on Airbnb and short term rentals.

 

Jae Seok An  

Right? I see. So when you started your first Airbnb on 2016, you already had four available listings to start to it.

 

Michelle  

Well, to start with, no, we only had the one and then the like we had them but they were all long term. So as they became available, so our first one, our first one we rented and then the second one was a month later and then about six months later, our third one came available. And very shortly after that, our fourth one came available. And then of course, the fifth one We have created,

 

Jae Seok An  

right? You mean you build the house on the land?

 

Michelle  

It’s a it’s a small commercial building with apartments in it. So it’s it’s an apartment building.

 

Jae Seok An  

Right. So you have purchased the property or did you just rent? Oh, I

 

Michelle  

see. Yes, yes. No, we bought the building probably about six years ago.

 

Jae Seok An  

Right? And you just renovated to operate it as an Airbnb.

 

Michelle  

Well, we renovated and initially to do short term rentals, right. But the the last unit we transferred some of the commercial space to create a unit for renting specifically on Airbnb.

 

Jae Seok An  

I see understand, and what has been your occupancy rate like for those four listings well

 

Michelle  

Until recently it’s been about 70 to 80% and climbing every day from from month to month it was going up and of course then this this whole thing hitting it crashed. But I was I was looking at a projected 98%. Within this summer coming summer, we would have been booked solid for all our units.

 

Jae Seok An  

I see. Right.

 

What was the seasonal effect like in your area?

 

Pardon me? What’s your seasonal effect?

 

Michelle  

Oh, yeah. our busiest season is the summer which is strange for a ski town but I think that’s due to the golfing and hiking. Then our next busiest season is of course the winter for for skiing. But our slow season is November and April. The rest of the time, our occupancy might be a little bit on the lower side like 50 to 60%.

 

In say May,

 

and maybe October, but the rest of the time. It’s been really good occupancy.

 

Jae Seok An  

Right? That means above 80% Yes, usually. Gotcha. And how, how much of the profit Have you made per month with those 80% occupancy rate in the good month?

 

Michelle  

In a good month, um, you know what, I’m just gonna I have my spreadsheet available. And I can tell you for I think our best month last last year was August and of course, we didn’t have our fifth unit online at that point and our actual net earnings after we pay all our taxes and fees, and all that That was about $8,000. Oh, nope, sorry, it was our better month was July. And our net was over $11,000, almost $12,000

airbnb unit in kimberley - Canada

Jae Seok An  

or four properties, right?

 

Michelle  

For four properties. Yeah, the fifth one we brought online just before this pandemic hit. So we didn’t have a chance to really get it going. And as soon as the pandemic hit, we took it off, and we’re not renting it at all, because it’s a lockout to our own place and just want to have the security there.

 

Jae Seok An  

I see. You said each of that profit, so that means it’s after paying the

 

way do you need to pay the rent or mortgage or not?

 

Michelle  

We do pay a mortgage, but our mortgage is very low. It’s only about 1200 dollars. So when I say the net profit, that’s not including our operating costs of Hydro and, you know, supplies and that kind of thing. But I’m just going by our net earnings as far as taxes and fees that we have to pay to the booking agents and the government.

 

Jae Seok An  

I see understood Oh,

 

Michelle  

after that, I would guess we’re probably looking for the 11 $12,000 a month, we’re probably looking at about $7,000 because we’re doing the cleaning ourselves right now.

 

Jae Seok An  

I see.

 

So, yeah, so

 

about $5,000 per month were spent on mortgage, other bills, supplies, right, all those things. Yeah. I see. There’s two. What was the starting cost like for you to start your first project 40 from long term rental to occasion rental.

 

Michelle  

Well, that’s that’s the amazing thing. We got very, very lucky. Okay, so we had to furnish these apartments obviously because the people being long term rentals, they were supplying their own furnishings. And that would have been really expensive except that we had a friend who is in the hotel business she she manages a local hotel and they were in the process of changing all of their decor and upgrading. So we were able to get most of our furnishings for all the apartments for free. So, you know, they were hotel casts off cast offs, but being that it was a higher end hotel. The furnishings were really, really good condition. And you know, you would think being a hotel that it may have a lot of wear, but they didn’t because It was a higher end hotel. And they, they were just changing it because to for them it was a dated decor. So, yeah, the only thing we had to really put out for was the mattresses because we didn’t want to use the hotel mattresses, and we just bought those off of Amazon. And, you know, for 200 to $300. Somewhere in there, delivered right to our door. They’re fantastic. We get lots of compliments on those.

 

Jae Seok An  

Right. Okay, that’s that sounds good. And you’ve mentioned that now there are some regulation regarding the corona virus and you only can accept people travelling due to emergencies. And how does that affect your occupancy rate and price?

 

Michelle  

Oh, well, we’ve we’ve slashed our rates for sure we snatched slashed our rates to almost half what they were and our occupancy rate is almost zero at this point. We are being Very, very particular about who we, who we allowed to come in, both for the safety of people who are already here and also to try and discourage this, this travel that seems to be happening all the time. So, we have right now, we have a young man who was planning on travelling before the pandemic gets, so he let his landlord know, I’m going to be travelling until the end of April. And then at the end of April, I’m going up north back to my job. So of course, his house was rented out, so he had nowhere to go. So we’ve rented to him. And then we have coming today, actually, someone from our utility, our internet utility and phone company. He’s coming here for repairs for work. So he’s going to be renting for about a week. So I mean, of course, that’s an essential service right now, especially in these times. So that kind of thing is what we’re renting for, you know, we’re being very proactive and very particular and turning away anything that isn’t necessary. Understood.

 

Jae Seok An  

And how have you been doing your pricing before? before these Coronavirus?

 

Michelle  

We we use wheelhouse and I discovered that fairly early on so we’re very fortunate that way had I not discovered it, we would not be making the amount of money we make. We would have left thousands and thousands of dollars on the table for sure. I’m still using wheelhouse but again, you know, I’ve just set my rates quite a bit lower. And it’s it’s been fantastic. I can’t say it enough good about wheelhouse. Right.

 

Jae Seok An  

Finally, what lessons have you learned as an Airbnb host

 

Michelle  

people don’t read

 

Yeah, it but I’ve learned that there, it takes all kinds to

 

make the world go round, I’ll tell you that. I’ve been shocked and surprised at a lot of things. I’ve learned that in order to run this business, you have to have a lot of patience. You have to have thick skin and big shoulders, and you have to be firm in your house rules.

 

When people ask for exceptions, that’s never a good sign.

 

It usually leads to trouble. So we’re just you know, very particular about who we let into our place because we were wanting to protect our units. But also, you know, there’s a lot of good people out there too. We’ve had people come and and just amazing people,

 

and they return. They return every couple of months. Of course, not now, but to It’s just been great.

 

Jae Seok An  

All right. Yeah, that’s it about the podcast.

 

Michelle  

Okay, thank you very much.


Gain insights on Airbnb market in Tennessee with Airbtics

 

Categories
Podcast

A mud house and 4 Airbnb homes in farmland, Tennessee

Today’s guest is Jackie from Murfreesboro in Tennessee. She runs for Airbnb unit or within a 50 acres formula and she started her first listing with a mud house in the farmland. And now she is building the fifth unit (also within the farmland) to run on Airbnb. Her revenues from those four listings are somewhere between four to $7,000 per month and during this pandemic around 50% of the next 30 days or booked.

mudhouse airbnb
A mud house Airbnb

Podcast summary!

  • How Jackie got started with first Airbnb listing with a mud house 2:11
  • Impact of the lockdown in Tennessee to her Airbnb houses 5:05
  • Seasonality of her listings 6:42
  • Occupancy rate across the units is between 50% – 65% 8:14
  • About Pricing strategy 9:04
  • Revenue breakdown by months 9:55
  • What are the challenges of running Airbnb 11:31

Full Interview Transcript

jaeseok an

I can see that you have four listings as a 50 acres, farmland. Mm hmm. So are they all located? Like one next to each others? 

Jackie  1:15  

Yeah, they are. each one is probably about a football field away from the other one. Like in all directions. So they all kind of have their own privacy and separate interests.

jaeseok an  1:29  

Right. So you have two one bedroom houses wants to do one three bedroom houses. Is that

Jackie  1:38  

right? Um, no, I don’t have any three bedroom I just have a studio that’s about 900 square feet. And a tiny house that’s about 500 square feet and then another tiny house that’s 300 square feet and then the hobbit house which is made of mud

jaeseok an  1:59  

Oh, Okay, all right. Yeah. So yeah, how did you get started? What was your motivation when you start your first rental?

Jackie  2:11  

Um well the first rental was actually the mud house and we actually just built that for fun. It was free to build we use all the materials were from the land so we actually it’s literally just made out of mud. And we weren’t using it for anything after we got done and as I put it on Airbnb as a joke, like Haha, this will be funny. And I had it. I think I had it priced at like $30 just like I said, as a joke and someone people started booking it and I was I had no supplies. I had to go run and get an air mattress and I was like, Oh my gosh, I can’t believe that this is actually happening. And then once I saw that, and mind you this, this building does not have running water it does not have a shower. It doesn’t have a toilet nothing and people were still coming. So I said, Wow, if I’m making money off of a mud hut, how good could I do with you know something else? And that’s what started everything.

jaeseok an  3:17  

How much did you charge per night for the White House?

Jackie  3:20  

The mud house I started I think like 30 or $35. But now it’s up to 100 and people are still still booking like crazy. Well,

jaeseok an  3:29  

yeah, I’ve never heard about mode house Airbnb. Easy. Like, have you ever seen any other houses doing the same consum

Jackie  3:41  

I don’t think I don’t know if there’s any other in Tennessee, but it’s actually you know, if you option under Airbnb, like unique stays. Yeah, it would be classified under earthen homes. So

jaeseok an  3:55  

yeah, interesting. And rich. Where was it?

Jackie  3:58  

That that I put On. Yep. I think it was 2018 or 2007, end of 2017 or early 18.

jaeseok an  4:09  

Right. And when you decided to start your second house,

Jackie  4:14  

um, I would say very shortly after probably a few months, right. And then it just trickled I was like, Oh, I want to do more and more and more.

jaeseok an  4:26  

Interesting. Okay. And what’s your current situation with your rental close? I can see that at least 50% of your calendars for next 30 days. Seems to be booked. Are they real bookings? Are there available bookings? Are they real bookings? Or did you just block it because of the pandemic?

Jackie  4:48  

Oh, no, they’re real. Yeah, I don’t block out there.

jaeseok an  4:51  

Right. So okay, that’s that’s pretty nice considering the crime situation How about like, how much of how many of the cancellations did you get in the past month?

Jackie  5:05  

Um, so when everything kind of, I think I started quarantine, here in Tennessee the 18th of March, and around then I started getting all these text messages cancellation cancellation. I was like, Oh, no, it’s happening. And then you know, part of the Facebook, you know, groups and everyone is freaking out. So it scared me. So, March was actually still continued to be a pretty good month, April, scared me the beginning of April because everyone dropped off but then towards like, the second week of April is when I feel like people were starting to get sick of staying at home. So they were like, hey, and, and there’s also strategies that I use as far as writing. I changed all the time. To secluded and mentioned that we’re on land, and you wouldn’t be me or anyone you know, and that I think that really even just changing those words in the titles, I got so many more hits and like questions and I just really tried to make the potential guests understand like, I would take care of it and they’re going to be safe out here. And there’s so much you know, they can bring their kids and let them run and get energy out. Instead of being in your neighbourhood stuck inside you don’t have a yard so people really get it spiked up a lot. So I was very thankful for that.

jaeseok an  6:42  

That’s, that’s nice. That’s, that’s good. When are your busiest month and when were your high this month?

Jackie  6:52  

Um, what I’ll actually look at that

the month that you You think are going to be terrible are your best months. So, like, I would think out here, you know, we have the pond and like just outdoor things to do. You would think the summer it was would be great but this month or this year, my best month was February. I think I actually brought in I brought in about $7,000 in February

jaeseok an  7:26  

from the four unit. Yes. Yeah, interesting. What do they usually come visit your place for? February

Jackie  7:40  

um, you know, I don’t I don’t even remember what it was for. We are really close to the interstate. So I feel that we’re a good stop as far as Oh, it’s fast. I can get off the interstate. If I’m you know, in Florida and heading up northeast. I can just stop here. Or we have a lot of content where, you know, 35-40 minutes from Nashville, which is a great hotspot right now. I think a lot of things like that just come into a good play with it.

jaeseok an  8:14  

Right. Make sense? Then what has been on occupancy rate during, like the high season for you, which is February and like around that time?

Jackie  8:27  

I think our occupancy rate was about 65% 65.

jaeseok an  8:32  

How about like during summer last year?

Jackie  8:36  

I believe it was a low 50s.

jaeseok an  8:40  

Low 50s. Alright, so there isn’t much too much of the gap between the high season and the low season for you. Right? Yeah. All right. And how do you do pricing

Jackie  8:56  

as far as like my cleaning fee and everything like that.

jaeseok an  9:04  

The nightly fees like how do you decide how much that’s going to be cost on that night?

Jackie  9:11  

Um, so I do not do the smart pricing because I do not trust it. Right. So I just kind of, I will, maybe once a month go through Airbnb and type in, you know my location and look at what everyone else is doing. And I just want to be just a tad lower. I mean, if you want to do $79 or $70, do 69 because that looks better than 70. You know, and then don’t totally jack up your cleaning fee to where when they go to checkout, they’re like, Oh my gosh, what the heck happened here, you know? Yeah. So

jaeseok an  9:55  

that’s it. I see. That’s interesting. And what has been Your revenue dream. You’ve mentioned about February, but during like the typical months, like November, October, or April,

Jackie  10:10  

um, I would say, let’s see.

So

last, let’s say last May, we brought in

4400.

June was 5300.

July was 5200.

jaeseok an  10:39  

All right, so that’s the total revenue. Yeah.

Jackie  10:43  

So I’m I my goal that I am satisfied with for the amount of work and money that I put in, is, I want to at least clear 4500 and I’m okay now if we get above that, that would be amazing. But I set that goal for myself.

jaeseok an  11:04  

Right and does around how many nights that you need to be booked for the month?

Jackie  11:12  

Um

I would need to be booked

about 65

jaeseok an  11:23  

right

Jackie  11:24  

between that’s what for so I mean that’s, that’s pretty low Really?

 

jaeseok an  11:31  

Yeah, cuz Yeah, I can’t, I saw that you also have like a monthly discount or like weekly discount. So if you get that kind of bookings then you have like one month fully blocked. So that’s 100% occupancy rate for that one house. Right. Okay. Yeah, the next question is, what are the top challenges about running Airbnb for you?

Jackie  12:00  

I would say the challenges for me are, I work full time as a dental hygienist so I really can’t oversee cleaning and things like that I clean on the weekends when I’m off to cut costs. But say I’m very finicky when it comes to cleaning. So I really, you know, even just a hit one hair left on the sink or anything like that, that just drives me crazy. So finding good people, reliable people to help you clean and then also pricing because if the pricing yourself too low attracts very, very bad guests, and I’ve had a few bad guests because I think I attracted them myself with my low pricing. And then I think that’s really The majority of it and probably will just wear on your furniture that you’ve bought, because you need you need nice things if you want to attract the right guests, but then in the same breath, the nice things that you’ve purchased are getting degraded over time.

jaeseok an  13:19  

Right? Make sense? Are you planning to make your own personal website for the Airbnb?

Jackie  13:28  

I have, um, I have made

my own Instagram pages so and I’ve linked them through when you check in. You know how you can add the photos. If there’s any special check in Yeah, I’ve taken photos for each listing but then at the very last photo is please follow us on our

on our Airbnb

Instagram page.

jaeseok an  13:58  

Okay. Right, and you’ve mentioned about getting the right cleaning is one of your challenge because you need to work full time. Right? And how do you how did you find the cleaners and how do you like keep them to work with you?

Jackie  14:22  

Thankfully my cleaners have been people that I know I just I honestly don’t know how people would I know there’s apps you know out there that you can like turn over Airbnb that you can find people to do the job for you. But again, I just don’t really trust people that I don’t know to do it.

jaeseok an  14:45  

I see so you know, some people and they are the one who helps with your Airbnb. Are they your co host as well?

Jackie  14:55  

Yes, they are. Yep. So they can answer people while I’m at work.

jaeseok an  15:00  

Alright. Yep. Are you planning to get more houses built in that farmland?

Jackie  15:09  

Yes, I we’re actually working on our fifth one right now.

jaeseok an  15:13  

Okay. How is that going?

Jackie  15:16  

Um, well, it’s, it’s going okay. It’s, you know, kind of thinks because we’re in this pandemic. So, you know, I’ve been furloughed, so and I’m on unemployment and my unemployment has not kicked in still. So I’ve had zero income come in. Thank God for Airbnb. It’s been honestly such a blessing. So I’m kind of trying to conserve so we’re gonna, that’s we have something we’re doing, you know, where we do ROI, everything so we just have to kind of wait until we have some more cash flow coming in to do the things we need to hire out.

jaeseok an  15:58  

I see him Like paintings or he’s told me

Jackie  16:04  

Yeah, we do we do all that ourselves. So thankfully also my husband is in construction so we can do most of it. Really. It’s just buying the supplies. So like buying the cabinets to instal, we can do everything ourselves and we just, we just need money.

jaeseok an  16:24  

Right. All right. Thank you so much.

Jackie  16:27  

You’re welcome. Thank you.

jaeseok an  16:29  

Have a nice day. Bye bye, you too.

Jackie  16:30  

Bye.


Gain insights on Airbnb market in Tennessee with Airbtics

 

Categories
Podcast

10 Airbnb units in Toronto (Co-hosting and Rental Arbitrage )

Today’s guest is Matt. He runs 10 listings in Toronto and he is a co-host of some of those units. He achieves an above 85% occupancy rate in an average month. It breakevens during the low-season and making up to six to six thousand dollars per his one-bedroom condominium unit. He is also an owner of airbnbuncovered.com with a youtube channel giving useful information for Airbnb hosts.

airbnb podcast interview toronto house
Matt's Airbnb
how much can you make on airbnb

Podcast summary!

Full Interview Transcript

Jaeseok an

So yeah, when you like acquire new Airbnb properties, how do you make the kind of decisions like what’s your process

 

Matt Caissie  1:13  

so I first start with area like the location. And in Toronto I have a specific zone that I want to keep inside. And it’s the same zone that I tell my co hosts to, to focus on as well. And what makes that zone good is the proximity to the two things. So the first is proximity to tourist attractions and large concert venues and the CN Tower in Toronto, which is a huge tourist draw. Right? So luckily those things are all close together. And then the second thing that I look for is to make sure that there is the location is close to A business district because there are really two types of travellers on Airbnb hosts who are travelling for vacation and those who are travelling for business.

And so the vacation travellers drive the price up in the summer and the business travellers are the ones that keep things going in the winter. Right. The other thing, that’s the other good factor is to be close to a convention centre, okay to try to attract business travellers. So luckily here in Toronto, those the proximity to those kind of two or three main things, the proximity to office buildings to a convention centre, and two main tourist attractions are luckily they’re all really close together. So I stick to running properties in those areas and in that area.

 

jaeseok an  2:53  

Right, I see. Are those areas popular for short term? No, I mean, Long Term rentals as well.

 

Matt Caissie  3:02  

They’re less popular for long term rentals because

 

a most of the condo buildings in those in that area are a lot of short term rentals, which can detract from long term stays. Yeah.

 

Unfortunately, that specific area,

 

which has which is close to the financial district and to the tourist stuff, doesn’t have a lot of,

 

I don’t know, kind of call it day to day. things,

 

jaeseok an  3:31  

right.

 

Matt Caissie  3:33  

So it’s less attractive. I mean, there are tonnes of condo buildings down there. So people are definitely living in those areas. Right.

 

jaeseok an  3:43  

Yes, he sounds like a pretty good place to do those rental arbitrage, renting out in the long term and renting it out on Airbnb.

 

Matt Caissie  3:53  

Yeah, yeah, for sure.

 

jaeseok an  3:55  

How about yourself, are you renting out those properties? Are you are you renting those properties Do you by me?

 

Matt Caissie  4:02  

Mine are combination of arbitrage and co hosting.

 

jaeseok an  4:06  

Okay? Right? What do you mean by co hosting? So you. So there’s different types of the co host and what kind of CO hosts like how much of the worst thing you do.

 

Matt Caissie  4:20  

So when I take a new co hosting client on, I take a fixed percentage of the total revenue. And I effectively remove the main host out of the day to day operations completely. And so I am only involving a host when we’re talking about strategic decisions about pricing over the long term, but not say I want to change the price for the next few weeks by increasing it by $10. That’s not going to go to a co host. So basically, I come in and I manage the entire operation. From looking after the cleaning to the restocking, to managing everything to do with guests and key exchange and check in and check out, my hosts really hands off. And that’s great for them because they don’t want. They want the additional revenues from Airbnb, but they don’t want to be woken up at three o’clock in the morning or have to wait up late for a guest. And so that’s the service that I provide to them is I will be I will manage everything for you. And you’ll be only involved on a strategic level with se, which is about setting our, you know, our pricing and our strategy for the year what types of desks we want. And then otherwise, we might be in touch if there’s a we wouldn’t be in touch if there was a maintenance issue. That wasn’t easily rectified.

 

toronto airbnb podcast interview

 

jaeseok an  5:55  

I see him, he says and how much of the percentage usually take from the revenue or profit.

 

Matt Caissie  6:04  

So it’s usually 20%, which is the standard right here in Toronto, right from the total revenue. Yes.

 

jaeseok an  6:16  

That’s pretty good. And how do you find those who do find someone who already want to find co host? Or do you find just normal, long term rental hosts and convincing them to lease it on Airbnb?

 

Matt Caissie  6:31  

So I’ve been lucky. All of my co hosts have found me in one way or another. Okay, way back when I first started being a co host, four years ago or five years ago, Airbnb actually had created a marketplace where hosts who were already super hosts and met some other criteria were eligible to make themselves available to to co host for other people. And then they marketed the CO hosting marketplace to hosts. And so my first two co hosts found me that way. So they wanted to co host they went into the marketplace, they saw what I was up to, and the description that I had given. And so that’s the first two came. And then the last three came through word of mouth.

 

jaeseok an  7:23  

Right. So you have eight listings right now.

 

Matt Caissie  7:30  

10 times.

 

jaeseok an  7:33  

And how are they doing right now? I mean, how are you heavy? You? Are you still accepting the guests? Or have you blocked some of the like, next few weeks? How’s it going?

 

Matt Caissie  7:45  

So we’re still open. We are complying with the local laws and the law, the bylaws within our buildings. And so in many cases, that means that our reservations have to be 30 days or longer. Right

 

jaeseok an  8:02  

Right, so the guests you’re accepting are staying longer than 30 days. Yes, exactly. Right. Okay. You’ve mentioned about the high season is in the summer with tourists plus business travellers and low season seems like the winter.

 

Matt Caissie  8:24  

Yeah, we follow a very typical seasonality curve. Yeah, so it’s exactly that. So the high point is July and August and that’s double the revenues from January and February.

 

jaeseok an  8:41  

Right.

 

Matt Caissie  8:42  

And basically from March until June, you can curb the revenues up almost on a straight line to meet the the top and in July and then we rebound slightly in September because Toronto has And an International Film Festival in September, and that’s for 10 days. And those 10 days are the absolute best nightly rates of the entire year. Right. But then after that tourist season is over, the festival is over and we take a pretty, pretty, pretty sharp decline until we get to December and then in December we get a bit of a rebound from guests who are travelling for holiday parties or people from around the area who are coming in for Christmas shopping trips. So we got a bit of a rebound in December but then it goes back to goes to its lowest in January.

 

jaeseok an  9:44  

I see how much I feel like average daily rate difference between January and June in July.

 

Matt Caissie  9:53  

At least double if not more. At least I will.

 

jaeseok an  9:56  

Yeah. How about the occupancy rate in January 1. He’s June in July.

 

Matt Caissie  10:02  

It falls. So for the average Toronto hosted falls quite a bit. For me, I try to still maintain at least 90% in January and February, right this past January and February was a bit tougher, because actually not well, travel was down. Or I shouldn’t say travel bookings were down in January in February. And I think, from the research that I’ve done that was largely due to the market here being pretty flooded. Right? So there’s a lot of growth and short term rentals in Toronto and we especially during the slow season, I think we are starting to see what happens when supply outstrips demand.

toronto airbnb podcast interview 2

jaeseok an  10:45  

Right. But

Matt Caissie  10:48  

yeah, generally, I mean, I do my best keep that 90% in January, February, so January February 2019, I would have been higher closer to now. Sex are 98%. But this year, there was definitely a fall.

jaeseok an  11:05  

What do you think is the reason of like this year? January? I mean, I understand about maybe March, but how come you had a decline from the January is here

Matt Caissie  11:18  

is what I was saying is that the number of listings in Toronto has grown exponentially, right? And so there are a lot of hosts who are or Airbnb. So having a lot of listings in an area can be helpful because it tells potential guests that this like it helps to create the market. So that potential guest comes on to the site and they see there’s lots of options and they’ll probably make a booking, versus if they come on and they see there’s not very many options and we lose that guest. But at the same time as more people invest in Airbnb, you know through purchases or Through rental arbitrage, there are more people that need to survive. And I would hazard to say the newer entrants to the market are, they’re a bit behind. And so they’re chasing what they hear and what they hear about, you know, strong rates and increased revenue over long term rentals. Right? That’s not necessarily happening. And when it doesn’t happen, hosts get desperate, and then we start to see a real decline in rates.

jaeseok an  12:32  

Yeah. Makes sense. Makes sense. So you’re saying that there has been increase in Airbnb supply, while demand hasn’t actually caught up to that supply?

Matt Caissie  12:45  

Yeah, yeah. And I don’t know.

I don’t know if demand would catch it in January, February, March. right because even November for certain degree because During those times, it’s not a very great time to visit the city. It’s cold here. A lot of tourists things are shut down for the season, because we really do have an actual tourist summer tourist season. Toronto is very much like a coastal town are a cottage country. In terms of tourism. The only thing that happens in the winter here for tourists draw are hockey games and basketball games. So some sporting events, but those sporting events are, you know, a couple times a week, so you can’t build an entire tourist business on those two things alone.

jaeseok an  13:45  

Right. So you’ve mentioned that you’ve had some decline in this year, like compared to last year, which was 90 to 95%. So like how much of the occupancy rate Did you have this year?

Matt Caissie  13:58  

This year is lower It’s below 90 for sure.

If you want to take March or February, January, February in the first half of March, it was probably 85 to 90%. And then after mid March, we’re talking COVID stuff. So then things are very different.

jaeseok an  14:19  

Yeah, make sense? Yeah. So how much easier to renting the average like two bedroom house apartment in that area in Toronto, if you’re going on the long term lease,

Matt Caissie  14:35  

so I don’t deal much in two bedroom units. Right. My main thing is one bedrooms. One, a one bedroom condo for rent, pre COVID would have been

somewhere between 2100 to 2800 a month.

jaeseok an  14:57  

That’s the that’s the Like the rental price to renting the one bedroom apartment for the long term, right?

Matt Caissie  15:07  

Yes. Okay.

jaeseok an  15:11  

How much has been your revenue in high season and low season? Wait?

Matt Caissie  15:19  

Yeah the high season can go as high as 6000 to 6500. But that’s the absolute best it can be. And low season can be as low as 2800.

jaeseok an  15:33  

ACC you’re breaking even during the low season and making the most out of it during the high season. And probably like, other seasons in between shows correct. Right. And that was the hardest thing about co hosting.

Matt Caissie  15:58  

The hardest thing about co hosts is trying to find a co host who is going to have the same values and approach to running an Airbnb as I do. So I don’t run an Airbnb, can you fully maximise revenue at all I like to maximise revenue at the expense of everything else. So I’m only going to work with CO hosts to understand that there are going to be times that the unit may be left empty. And that’s because I’m not going to be like I have a very strict set of requirements for who I host and I’m not going to back down from those requirements because perhaps we’re not hitting our month. Running can there be a visa once with basically me and a couple cleaners is very, it can be very time consuming when things aren’t going right. And so I know Need the guests that we’re hosting to be good guests who aren’t going to cause me problems who aren’t going to do any damage? We’re going to leave on time, that sort of thing. So I’ve developed a, like I said, some some guidelines, some criteria that I use to vet guests. And then I only host guest guests that fit within

that criteria.

And I actually did have a YouTube channel. And I did a three part series on the types of guests that I think that all hosts, all hosts should host. I really think that those hosts out there who are are taking unnecessary risk and taking on any guests that basically provides their credit cards and shows up like, I think that is going to be the detriment to our industry. As a community of hosts. We need to be responsive We need to be respectful and and to do that we need to follow certain guidelines right should be hosting And on the flip side no host wants to come into a place that has been trashed from a party or find out that there were 10 people in the unit instead of two people in the unit and so I was really do need to properly vet their guests

jaeseok an  18:26  

right and Do you mind sharing your venting process? Or is it something that you can if there’s something that you can share?

Matt Caissie  18:34  

I don’t know if we have time to share it I really think the best thing is to head over to Airbnb uncovered.com slash blog and and then check out the videos in the blog post there

jaeseok an  18:48  

says Airbnb uncovered calm

uncovered uncovered.com slash blog.

Alright, yeah. Found What was the business about?

Matt Caissie  19:02  

The blog? It’s been about a year.

jaeseok an  19:04  

Right?

Matt Caissie  19:06  

Mainly, so I’ve been working on it for it’s an idea that I wanted to do for like, three years or more now. And I started it last about a year ago. And then I’ve really gotten serious with it over the last four months. And so the website came a year ago and then the YouTube stuff. It’s all been basically since I started filming in December and started uploading in January, so it’s still very fresh. Yeah.

jaeseok an  19:39  

All right. Have a nice day there.

Matt Caissie  19:41  

Thank you. Okay, bye bye.

Transcribed by https://otter.ai

how much can you make on airbnb
Categories
Podcast

Into the Airbnb EP 8: $100k Penthouses for Airbnb in Quezon City

Today’s guest is Joyce from Quezon City, Philippines – a home for 3 million people and located next to Manila. Joyce owns 10 AirBnB properties, mostly penhouses in a condominium. 7 out of 10 listings are now closed due to the pandemic, 3 of them are rented for nurses. 

Typical similar penthouse costs around $100,000 now, and net profit is around $1,500 per unit. The occupancy rate throughout the year is above 90%. 

airbnb-apartment-quezon-city

From the first condominium rental to the tenth Airbnb listing

jaeseok an

Can you tell me about how you got started with your first vacation rental?

Joyce

In April 2017.

jaeseok an 

So you started on April 2017.

Joyce

Yes, I started 10 years ago. I posted on other sites.

jaeseok an

Right, which website did you use?

Joyce 

Homeaway, booking.com. That was 10 years ago. After that, I use only Airbnb [Jae: Right.] til now.

jaeseok an  

Okay. 

Joyce

I’ve had a great experience with Airbnb. That’s why I continue using it.

jaeseok an

Right. So, you mentioned that you started 10 years ago so that was 2010. [Joyce: Yup, 2010.] And how did you start it?

Joyce

I started with one condominium at the back of a hospital. Then after that, when the business is very good then I buy another condominium. And another one and then another one. And it becomes 10 units.

jaeseok an 

Right. So, did you buy it or did you rent it out? 

Joyce

I buy it. 

jaeseok an 

Right, so you bought it with mortgage or did you just buy it in cash? 

Joyce  

No, I just buy it in cash, because I have other businesses in different locations of condominiums in Philippines.

jaeseok an

 Right.

Joyce

So I have three locations. [Jae: Okay.] One is at the back of hospital, other is near a park, the other is *inaudible*

jaeseok an  

So all of them are in Quezon city? 

Joyce  

No, different. Three in Quezon city, at the back of hospital, five in business area, one in university.

$100,000 condominium in Quezon City

jaeseok an 

Right. How much are they usually cost to acquire a studio condominium in Quezon City or those in the business area?

Joyce  

In Philippine peso, it’s around 4-6 million.

jaeseok an  

Right, so that’s around 100,000 US dollars per unit?

Joyce  

Yes, and it’s rented out for $1000 a month.

jaeseok an  

What do you mean by $1,000 a month?

Joyce  

For each unit. 50,000 pesos 

jaeseok an  

So you’re saying that you have made around 50,000 pesos per month from your rentals? [Joyce: Yes, from my rentals.] Right. And at that time you posted your rental on agoda and homeaway?

Joyce   

Agoda and homeaway.

jaeseok an  

Right, I understand and when did you buy your second property for short term rental?

Joyce  

I find the first condominium 2010 [Jae: Right.] And the second one is November 2011. And I can’t quite remember the others.

jaeseok an  

Right, so can you tell me about the timeline? Like from your first one in 2010? Second one in 2011? And how did you get to the 10? 

Joyce

2014, I buy three.

jaeseok an 

Right.

Joyce 

Then in 2015 I buy one and another one in 2018 and ’19. That’s it.*inaudible*

Above 90% occupancy rate

jaeseok an 

Right, that makes sense. So yeah, you bought your first one in 2010 and then one on 2011 and three on 2014. And you bought one every year since 2018. [Joyce: Yes.] Right. Okay, I understand that. So you have now 10 listings and what’s your average occupancy rate of those 10 listings?

Joyce  

Before the pandemic [Jae: Right.] in March, almost no vacant space.

jaeseok an

Oh, so does that mean above 90%?

Joyce  

Yes, 90-100%. Everyday I have a lot of guests. [Jae: Wow.] But now [Jae: Right.] only three condominiums are functional, seven of them are closed because of COVID-19.

jaeseok an

Right, those three condominiums are fully booked for next how many days? [Joyce: Until April 22.] Right until around April 22. So is it just one of the condominium or three of them or…?

Joyce 

The three of them. Actually, one of them is long-term. [Jae: Right.] Two years.. more.. And the two condominiums for Airbnb rentals.

jaeseok an 

Right, on Airbnb? 

Joyce

Yeah, on Airbnb. Because on Airbnb it’s more profitable. High rental.

jaeseok an  

Right. So you mentioned that you had to close down seven other rental properties. Is it because of the regulations or is it just not profitable?

Joyce 

No, because of the COVID-19. Safety first before money.

jaeseok an  

Right. So, is it that you opened up the bookings, but people are not booking it? Or is it that you should…?

Joyce 

Actually, there’s lots of guests who want to book, but the condominium refuse to [Jae: Oh.] accept guests. They don’t allow us to accept guests. Also I have *inaudible*…also closed now. Because of the COVID-19.

jaeseok an

Right. I see, so is the condominium refusing to getting the guest?

Joyce

Yes, only the condominiums near the hospitals are allowed to accept guests.

Net profit of $1,500

jaeseok an

Right, interesting. Right and that’s the three ones in Quezon that you’re still running. I see. I see. So you mentioned that you have achieved around 90-100% occupancy rate for your 10 listings. What was your revenue per unit? So let’s talk about just one unit. Let’s just talk about one unit near hospital, or what’s your average revenue per month? 

Joyce  

Around $2,000 per month.

jaeseok an  

Around $2,000 per month, and how much was the profit per month?

Joyce 

$1,500. 25,000PHP for the utilities, electricity and cleaning… that’s all.

jaeseok an  

Right. So that means it should be around $70 per night for that Airbnb listing. Is that correct?

Joyce

Yeah, sometimes it’s high, sometimes it’s low. [Jae: Right.] Depends on the month.

Benefits of Airbnb smart pricing

jaeseok an  

How do you do pricing then? 

Joyce  

Actually Airbnb send me the pricing [Jae: Right.] if I can go higher or lower. It depends on the season.

jaeseok an

Right, so you’re using the smart pricing from Airbnb? 

Joyce   

Yeah, the smart pricing. 

jaeseok an

Right.

Joyce  

We’re using it. Pretty updated. They, Airbnb staff call me or message me. You can upgrade or downgrade or discount for the guests, so that we don’t have idle days. [Jae: Right.] No vacancies. That’s their strategy.

jaeseok an  

I see. It’s interesting, because I have talked to a few hosts and most of them doesn’t trust Airbnb smart pricing anymore. Because it’s pricing too low. Have you ever thought about it or those the price work for you?

Joyce 

Yes, the price works for me. [Jae: Interesting.] They know the statistics of the guests.

jaeseok an 

Right.

Joyce 

*inaudible*

jaeseok an  

Right. Yeah, so it seems like yeah, smart pricing might work better in your area. So what’s the price they’re suggesting to you? That’s around $70 per night for a studio? 

Joyce  

Yeah. Because extra guest, there’s additional fee.

jaeseok an

Right, I see.

Joyce  

Yeah, one of my condominium can accommodate up to five, [Jae: Right] but the base price is without any *inaudible*. Then after additional first one there’s another fee.

jaeseok an

Are they 50 pesos per night?

Joyce

No, another 500 pesos. [Jae: 500 pesos.] For every person. So it would be around…1,800 plus 500..two thousand-

jaeseok an

That’s around $10 per new person.

Joyce

Yeah, $10 per new person. [Jae: Right.] So for four persons so is $40, plus another… how much is 1,800? Also $40, so $80 per night.

jaeseok an  

Right. Yeah, that makes sense. So it sounds like Philippines like especially Quezon and other areas that you’ve purchased your properties seems to be very lucrative to the Airbnb. And because…how much are the condominium price right now to buy a studio? You mentioned it was $100,000 it was $4-6 million pesos 10 years ago, or is it current price?

Joyce 

No, it’s the current price. Ten years ago, it’s lower. Almost half the price.

jaeseok an

Right. I understand now. Okay, that makes sense. And do you hire cleaners to buy supplies?

Joyce

Yeah, I have cleaners.

jaeseok an  

Right. And how much do they cost in your area?

Joyce

It’s only $10 per unit [Jae: Right.] or less. Sometimes less, because actually the units are very clean.

Penthouses are best

jaeseok an

Right, okay. And how do you do your market research before acquiring a new property?

Joyce    

Actually, I’m a business graduate.

jaeseok an

Right?

Joyce  

I research by the best condominium. I always find the best unit. For example, I find in Sanchez hospital a penthouse with a very beautiful view.

jaeseok an 

Right.

Joyce  

Yeah, and a balcony. I always buy the quality units, almost all my units are penthouses. 

jaeseok an  

Right. So I’m pretty sure when you buy a new penthouse, there will be different penthouse in different locations or different condominiums and how do you choose which one is the best for you?

Joyce 

Morning sun and best view, always. *inaudible* You can see the picture.

airbnb-condo-with-view-in-quezon-city

jaeseok an  

I see, right. What’s the price difference between penthouse and just like normal house in the same condominium?

Joyce  

Purchasing price? [Jae: Yeah. How much are they?] It’s more expensive in the penthouse.

jaeseok an  

Around by how many percent?

Joyce 

Around, I think, 20-30% 

jaeseok an

Right, interesting.

Joyce   

But the profit you will get is bigger than normal flat.

Supporting the COVID-19 front liners

jaeseok an   

Right. I mean yeah, it’s quite interesting that you can buy a penthouse in Quezon at 100,000 US dollars and you can make around thousand 500 US dollars per month. I think that’s really good return on investment, very good rental net profit. So my last question here is, how are you dealing with the Coronavirus situation?

Joyce

I paused the seven units. [Jae: Right.] Because for me, safety first then money. Then only the three condominiums now is renting. And actually I give them 50% off for month of March to April. They only renting it, it’s usually 1,500, now renting it only for 750 for this month.

jaeseok an  

Right, so you lowered your price by 50%

Joyce

Yes, I lowered the price by 50%. And I did not ask for additional fee for that additional person [Jae: Right.] They only pay for one person, so the four person is for free because they are nurses in Philippine health center. They are the front liners in the COVID-19.

jaeseok an

Right, I respect your will. That’s really kind of you and it’s nice that you have the places to help them, support them.

Transcribed by https://otter.ai

Categories
Podcast

Airbnb Rental Arbitrage in Dallas, Texas: Featuring an Airbnb host

rental arbitrage dallas

Key Takeaways

  • Rental Arbitrage is an excellent option for property investors who will sublet properties for a limited budget. It’s ideal for those who have the natural charisma to speak with landlords and get them to agree to sublet their property for Airbnb. This method is a popular way to earn a passive side income!
  • Discover the pros and cons of rental arbitrage and the best areas for Airbnb in Dallas, Texas. We’ll also feature a discovery tool to find the most profitable areas within your target market.
  • Learn what it’s like to do rental arbitrage in Dallas as we feature an exclusive interview with an Airbnb host. Hint: He achieved a 70% occupancy rate despite the pandemic.

Rental Arbitrage in Dallas

Recognized as one of the cities in the music capital of America, Dallas is also one of the best cities for Airbnb in Texas. In fact, this city offers several reasons for property investments to flourish!

To begin with, its population growth and low cost of living are just the icings of the cake. Did you know that there are also favorable taxes and laws for property owners? And not only that, but its vast market can generously bring great profit potential. 

Despite this, not all property investors can afford to purchase a property in Dallas. This is where Rental Arbitrage comes in! Rental arbitrage is an expert technique where you sublease a property for the sole purpose of Airbnb. If you’re wondering about its legality, the good news is that it’s perfectly legal and allowed in Dallas with your landlord’s approval. 

  • How much can I make on Airbnb in Dallas?

According to Airbtics’ data, Airbnb is definitely profitable in Dallas, Texas. The level of profitability will generally depend on your location, property type, and amenities among others. An Airbnb host in Dallas, TX, can expect to earn an annual revenue of $33,320 with a 59% occupancy rate for a 2-bedroom apartment/flat.

  •  Pros and Cons of Rental Arbitrage in Dallas

The major pro of investing in a rental arbitrage is that you don’t need to purchase a property. Perfect for beginners! It also offers low upfront costs and has higher chances to repeat and scale easily.

If your business continuously blooms in time, the revenue can be used for other investments or businesses. Eventually, if you still dream to purchase your own property, you can do so. Rental arbitrage is the stepping stone.

On the other hand, the only con with rental arbitrage is that you have to invest money and time to furnish the property. This is for the purpose of making it look more appealing to guests and receiving bookings. It can also be a struggle to find a landlord who will allow you to sublet their property, but you can do your best and convince them.

Interview with an Airbnb Host in Dallas: Sharing The Rental Arbitrage Experience

Let’s listen to one of our featured Airbnb hosts in our podcast, Into The Airbnb, as he shares his rental arbitrage experience in Dallas.

Today’s guest is Christian. I found him from an Airbnb Facebook group. He shared a screenshot of his Airbnb listing’s calendar, which was fully booked for the next 30 days during the pandemic. He achieves above 70% occupancy rate, making above $1,000 net profit per unit. 

It was an interesting experience to interview two hosts from Dallas (previously interviewed DeShan) as I found some numbers to be quite similar, such as starting cost, monthly net profit, and occupancy rate.  

Learn more about the definition of rental arbitrage through this ultimate guide for STR investors!

Rental Arbitrage Dallas
airbnb-king-suite-dallas

Full Interview Transcript  

Jaeseok An

Can you tell me about how you got started with your first short-term rental and how you grew it to four listings?

Christian

Sure. Before Airbnb, I had been in real estate. So traditional rentals like long term, year long leases, have some rental property and flipping houses. And so I got into short term because I stumbled across, maybe some of you might know him, Shawn, here out Dallas, who’s a arbitrager. And I started watching some of his content and just really started learning, I probably watched like 99% of all his videos. And then after that, what I did was, you know, reaching out to different complexes and seeing if they would allow me to use in a short term, so I went under a corporate lease, and do it that way. And so we started back in December of last year, and already had, you know, four listings. And we’re planning on scaling up and so all this stuff started happening so kind of slowed us down there a bit, but we’ve been able to continue to fill our calendars luckily so

Jaeseok An
Sweet. What has been your occupancy rate like in past four months?

Christian
Well, I’m down here in Dallas, Texas, have a unit in Fort Worth, Texas, a unit in Grapevine, Texas, which is right by DFW Airport. Have a unit near downtown Dallas and have a unit in Richardson which is about 15 minutes outside of downtown Dallas, and we first launched in Fort Worth. And that was the first unit and it was wintertime so I wasn’t too sure how occupancy would be. So the first month I think we had about 80% occupancy and then going into January and February, I think February was the best month that we had so far which had about 27 out of the 29 booked.

Jaeseok An

How many bookings did you have to get to fill up 27 days?

Christian
I think that one was about 10 or 11. So for that specific property, [Jae: Yeah?] it’s right next to, like an entertainment area. So you do get mostly shorter bookings. But we do make profit on the cleaning because we have our cleaning rate is for that specific apartment is $25 per clean. And I think we’re charging like 40 or something around there. So the cleaning wasn’t an issue because we made profit on that side as well. But on the other one, there are more long terms from what I’ve noticed.

Jaeseok An

Right. Yeah, if you have achieved around 80 to 90% occupancy rate, how much of the profit roughly do you make per listing?

Christian
So we’ve noticed about eight to $900 net on about 85% occupancy. Once we’re in close to 90 to 95, we’re over $1100-1200 profit. That’s just from the listing, that doesn’t include our like profits from cleaning fees.

Jaeseok An

Right. So I guess if you get lots of short term bookings, like the one near the entertainment area, the profit could go maybe up to…?

Christian
Yeah, actually, that’s probably our best performing property. It is a little bit more meticulous, just because there are more bookings. So you had to, we had a lot of automation in place. So it’s not, it doesn’t take but two hours a week for us. But uh, yeah, the most we’ve got on that property was probably 1300 or 1400 net. And that was probably like pushing 95-96% occupancy.

Jaeseok An

Right, that’s nice. How much do you need to start a new rental in that area?

Christian
Ah, not much at all, honestly. I mean, anywhere between four to five grand, our furnishings have been around $4,000. And then of course, so we mostly target apartment complexes, we don’t do the single family. Simply because with apartment complexes using a corporate lease, and applying under your LLC, you have economies of scale. So like, we were planning on picking up another unit or so in that same complex, so the cleaner can stay in that same complex. You know, doesn’t have to drive around everywhere, we’re able to use one unit as like a central hub location for supplies, almost like a distribution hub. And a lot of complexes do offer concessions for like a month or even two months. So really what you’re paying on the getting into the complex is just a deposit and application fee and all that stuff. And then that’s about it. That could be about $400-500. And then on your side is the furniture, which is spent from anywhere from $4000 to $4500. And, typically, you know, you should get that back within four to five months. So yeah, that’s about how much it costs.

Jaeseok An

Right, so that means you just need 4000-5000 to start, and you’re making around thousand dollars per month per property. So that means at this rate, you can actually acquire a new property almost every month. Are you on that speed right now?

Christian
I think we acquire a new property about every month, yeah. Every two months because the last two properties that I picked up were both in March. So we picked up one December, picked up one and I think in February it was and then I picked up two in March. And then so this is not my only stream of income. I also flip houses. And, [Jae: Right.] you know, like I said, have traditional rentals and I do all kinds of other stuff that supply income. So this is just one of the streams. I don’t recommend if this is your only stream system just to try to start building up one a month, but uh… I mean it is very, it’s an easy entry as long as you can continuously try to find the complex that will say yes. They do know that we do Airbnb. So that’s, I don’t like to tell them anything different. And it’s been a good relationship so far.

Jaeseok An

Right. And how do you go about acquiring a new property?

Christian
Yeah, so a lot of times I’ll start off with we have a tool. I’m not sure if you guys have it up there, but it’s called Zillow. It’s basically a website that has houses for sale and for rent. So I’ll start whatever area – I was born and raised in Dallas, so I know the entertainment areas, I know which places are going to be popular. And I also, before getting into an area, I go on Airbnb and just look at the other properties in the area and see how they’re doing, how booked are they, I can do like my own self analysis first of that area and Airbnbs in that area. And then I try to distinguish what could I be different from them? So for example, we had planned on, I hadn’t got a chance to do this yet, but going into two bedrooms because there are like half less two bedroom properties in the area than there are one. So that just makes you, you know, a little bit more competitive because, you know, you have more market share at that specific criteria. So once I do that, I go on Zillow, and then I look for that certain area. Zillow has this thing where you can just do an automated message. And so I just sit there and send automated messages of who I am, what I do. And I send like a couple hundred a week [Jae: Right.]. And the ones that are interested and do offer corporate leasing, they get back to me and then I look at the property, I see “is it easy for a guest to go into?”. So like I know a lot of apartment complexes especially here in downtown Dallas have like a concierge service 24 hours… [Jae: Yeah?] I don’t really like those. I like something with like a private entry, like a private patio entry which two of them do. And so they can get to the lockbox quickly, get inside and that’s it. And then also like parking how easy it is for them to park. So those are the few things I look for. And then once they have those all checked out, I go and make a visit to the property, introduce myself and my business. And if I like it, I look at the room and you know if everything checks out, I sign the lease.

Jaeseok An

Okay, sounds good and around like how many people that you have to send automated emails to get, let’s say like one call?

Christian
I would say if you’re sending 100 emails out, you’re gonna get, maybe, five to 10 reach back out and say, yes, we do offer corporate leasing. I don’t mention Airbnb until I am in right in front of them. I just do a simple message: “Do you offer corporate leasing for my business?” And then once they say, “yes, we do”, they will either call me or they email me. And then from that point on, once I’m in front of the manager, I let them know how my model works. Sometimes, we do house our own clients for real estate purposes outside of Airbnb. And a lot of the time we do Airbnb, so I kind of pitch it to them as in like, you know, I have my own clients come in and also have you know, some business professional people that stay that I find off of hosting sites such as booking.com or Vrbo, Airbnb. I even throw in that I have like travelling nurses staying. You just want to sound as professional as possible. [Jae: Right] A lot of people have a bad taste in their mouth about Airbnb.

Jaeseok An

I see. Are you only on Airbnb or are you on any other channels as well?

Christian
I’m only on Airbnb and Vrbo.

Jaeseok An

Right. Have you tried out any other platforms? Like a little bit more on the long term side?

Christian
No, since we had just started in December. The first month we launched, we’re only on Airbnb. Cuz you know, you have to integrate calendars and make sure you avoid double bookings. [Jae: Right.] So we didn’t want to start off with two right away. So we just started with Airbnb just to kind of see how it went. The second month, that’s when we threw in Vrbo and integrated our calendars. And aside from that, yeah, just those two that we’re on right now.

dfw-king-suite-airbnb

Jaeseok An

Alright, and you told me that you’re Dallas native, and you know the area pretty well. And you’re also doing like flipping, but how do you do market research before acquiring a new property for Airbnb?

Christian 
So we have what’s called Airdna.co, which I’m sure is everywhere, I think. It’s basically a short term rental analyzer. I wouldn’t say it’s 100% correct. I say, you know, take with a grain of salt because when I was first going into the Fort Worth area, I think this was like a B and occupancy rate was like a 69%. And revenue was like 2100 or something like that. And so I kind of took a chance with Fort Worth, and I just went ahead and got the lease anyway. And we’ve blown that occupancy out the water, but we’re like, average at 90% or so on occupancy and our revenues are tremendous. So I would look at AirDNA as a guide, I wouldn’t say use it as a ‘for sure, this is what it’s gonna be’ kind of thing.

Jaeseok An

Right. So when you use AirDNA, what kind of numbers did you look into? Because you can just look into by houses by houses, as well as you can do some filtering, like ‘what’s the average occupancy rate in Dallas area for two bedroom houses?’. What kind of features did you use?

Christian 
Um, so I do go through it by how many rooms it is, and then I filter it down to how many guests, you can change to how many guests you can provide for. [Jae: Right.] So in a one bedroom, I typically have four guests, is what I have, because I have a sofa, a king sized bed and then I have a pullout mattress or, you know, a foldable mattress that I put in the properties as well. So I do with four guests, then I look at kind of just the month over month revenue, I look at how many other listings are in the area. [Jae: Right.] And then I’ll be looking at both Airdna and Airbnb at the same time. [Jae: Right.] I look at Airdna’s numbers and I go to Airbnb and kind of cross-reference and see what other hosts are listed for. And then I also looked at what other post listings looked like. Because I’ve seen a lot of hosts out there who don’t care about their pictures, the space is not decorated well, and they’re still doing all right. So it’s like okay, so if I come into the space, and I blow them out the water on pictures, I’ve blown out the water on the space, the decorations. And that’s what we did in Fort Worth. Like we have professional photos done, we focused in on how to design the space. And a lot of people love the space and we’ve gotten their views on it that they love the space, they love the area. That’s another way to succeed, you know, look at your competition and how they’re presenting their properties. And if you can do twice as good, then you should be alright there too. But always back it up with data from, you know, Airdna and your own referencing from Airbnb.

Jaeseok An

Right. So final question is, what’s your tips on dealing with this Coronavirus situation?

Christian 
Yeah, so, man it’s been tough, I tell you. Right now, Dallas is shut down, Fort Worth is basically shut down. So all restaurants were shut down. Basically, everything else bringing a lot of people to the Airbnb platform is shut down right now. So what we’ve done is, I mean I kind of had to play with it a little bit, find ways to switch to long term rentals, right? So, you know, posting on my status, word-of-mouth. Someone who needs on a month to month, I think two days ago, and they’re only staying for about two months, possibly three. So I told them, I can guarantee two months. And then we look at Mark and Steve, if you want to do three or not. And that one, I mean, I’m not going to profit a huge amount, but really, I’m not worried about profiting a whole lot. I’m just worried about covering my expenses, as most posts should be focusing on. And then I just landed, yesterday as well, a month-long booking at my Richardson location. They booked off the Airbnb so that one was not off the platform. [Jae: Right.] But I have been incentivizing bigger discounts on month-long stays and then so my title say ‘deep-cleaned’, ‘40% off’ or ‘50% off’, whatever you want to do. And ‘long term’. So I put those three words in my title. And that seems to have been driving some traffic, as I got a 31-day booking yesterday and then in our Grapevine property, I think last week, landed a month-long rental on that one. Now we’ve got to focus on this Fort Worth one too, I got to change the wording on that one. I haven’t yet, but focus on getting that one booked for another month or so. So really, I think just taking this month by month is probably your best bet. You know, you don’t know what the future is gonna hold. And you don’t know how long this thing’s gonna last. So it could look way different next month, you never know. So I don’t want to promise a six month lease for someone. I could be losing out on some revenue if everything clears up in the next two months or something.

Conclusion

Now that you know how profitable Airbnb rental arbitrage in Dallas is, take the next step and level up your game! As we live in the leading generation of technology, you no longer have to manually go through each market to discover its profitability. 

With the use of an Airbnb income calculator, you can feel more confident about each property investment that you make. 

If you’re keen to find rental arbitrage properties and the most profitable Airbnb locations, you can take advantage of Airbtics’ Discovery Tool. By simply inputting at least 5 areas of your preference, you can instantly discover their gross rental yield and predict your annual revenue.

Categories
Podcast

Airbnb Rental Arbitrage at Dallas, Texas.

Today’s guest is DeShan. He does Airbnb rental arbitrage on four listings near Dallas in Texas with his one business partner. He started last year September with one property and is on track to add one rental property every month. His first two properties made $2,100 to $3,000 profits every month – the initial investment needed was around $6-8,000 for renovating those two properties. During this coronavirus situation, more than 70% of nights are booked in the next 30 days.  

Summary

Listing Details https://www.airbnb.co.uk/rooms/42950598
2BD 2BA
Dallas, Texas
Vacation Rental Career Working with private investors
The first listing started on 1st Sept 2019
The second listing started in mid-Nov 2019
Third listing started in Jan 2020
Setup cost / lease 

Starting cost is around 3-4k for renovation (2bed 2bath) + 1-month amount of rent for the deposit (1.4k)

A typical lease is 12 – 18 months (Got 1-month free month) 

Coronavirus situation handling Aggressively lowered price
Changed title to “Need a social distance? Stay with us”
Emphasizing how the house is sanitized and deep cleaned
Made cancellation policy flexible
Messaged previous guests and offered them the discount
When getting cancellation requests, he tried convincing them to keep the reservation by moving the booking to a later date. 
Pricing / Occupancy Rate

50% discount for monthly booking
The sweet spot of the number of nights booked is 1-2 weeks

Occupancy rate is around 87%

1st property Profit/month $600-$1000
rent 1850
utility 200
cleaning 200
2nd property Profit/month 1,500 – 2,000
rent 2,350
utilities 500
cleaning 300-500
Software stack (Edited)  Hostfully for a guestbook
Turnoverbnb to arrange cleaning

Full Interview Transcript

Jaeseok  

How did you start it from your first one to now? Looking for the fifth one? Tell me about the story about how you made it.

DeShan  

Yeah, so, um, we got into that Bnbformula program and started implementing it in like August of last year. So, we started learning about it all. And then we started doing our research and looking for a property. And then once we went through all the course material, and we found a property, we contacted a few homeowners and we found a house where the owner was okay with the idea, was interested in the idea. So, what we actually do is we do rental arbitrage. And in order for us to continue to grow, we work with private money investors, 

DeShan

So we have, we have people that we’ve networked with, or Facebook and personal relations that have worked with us and given us some capital to acquire these properties and furnish them and everything. And that’s really the business model that we’re currently running in and will probably continue to run over the period of our business.

Jaeseok  

You started your first one around last year August, is that correct?

DeShan  

Yes, we started it at the very end of August. But we didn’t list it until the first of September. So we really started like the first of September.

Jaeseok  

Right, and how long did it take for you to get the second listing?

DeShan  

So we got our first listing started on September and then our second listing, we finished in the middle of November. 

Jaeseok

Right. And the third one?

DeShan

The third one we started in January. 

DeShan

Yeah. So I was saying that our goal was to start a property every month. 

DeShan

And so we were a little bit behind on that. However, I think that our growth has been pretty good so far. And we are going to continue to acquire properties as we’re doing our fifth one next week and everything, so definitely got off to a good start. And we’re just looking forward to continue to grow

Jaeseok 

And how much does it usually take to start a new two-bedroom house in Dallas area to run on Airbnb.

DeShan  

So it really depends on the kind of property that it is, the size of the property… I know you said two bedrooms, but even the square footage of the property can make a big difference.

DeShan

Um, one thing that we’ve probably found, are trying to stick to, is for a two-bedroom, let’s say like two bathrooms, we’ll try to spend anywhere from like three to four thousand on furnishing. That’s usually kind of like our budget. And then it depends on the style of property that we’re doing because our business is called “Different”. And so every property that we have is different than the last one that we did. So each style kind of comes at a different price. But I would say on average is around three to four thousand. 

Jaeseok

What’s the typical amount of deposit that you need to put in to secure the house?

DeShan  

Yeah, so the deposit here is always the same as whatever the rent is. So for an example, one of our properties, the rent is 2,350. So that’s how much the security deposit was also. But typically, what we do is we try to get a front-end lease concession. So we try to get at least the first month free, and a lot of times, we might just sign a longer lease in order to get that first month free. And that’s what we usually try to go for when we’re setting up a property. But we don’t always get that, especially if you’re working with like an apartment complex or management company. So… 

Jaeseok

How long is your contract? For the house usually? 

DeShan

Yeah, so it varies if we’re able to no longer lease, yeah, we’ll do that. So for an example, we have one property, we signed a 13-month lease, and we were able to get one month free up front. And then another property, we signed an 18-month lease, and that allowed us to get one three-month upfront. So if we’re able to get that concession, we’ll usually sign longer than a year. But if we don’t get a concession, then we typically just stay at a year. 

Jaeseok

Right, understood. You have 21 days occupied in the next 30 days for the listing that you showed. That’s about a 70% occupancy rate right now, which is pretty good, considering all those cancellations happening. What’s your strategy?

DeShan  

Yeah, so I’m in a lot of the Airbnb Facebook groups, and so what I typically do, like once or twice everyday and kind of just either get my advice on questions or see what other people are doing. Recently, there have been quite a few people that have posted some advice about what to do. And pretty much everyone saying kind of the same thing. And so what we’ve done is the number one thing that you can do is lower your rates. So we’ve definitely tried to stay aggressive on our rates and be lower than our competition. And that’s probably the first thing that we did. And then after that, we optimized our title and our descriptions to cater to the situations that have happened recently. As you can see from the title that you are reading from our listing about social distancing. 

Jaeseok

Yep. 

DeShan

And then, in our description, we talked about how our cleaners are making sure that every property is deep-cleaned after every guest. We have a picture in our main photo reel that talks about the house being clean and sanitized after every guest, just to ensure that the people that are looking to book are comfortable in that regard. And another thing that we’ve done is made our cancellation policy flexible because Airbnb has given more search ranking to listings that have that. We were originally strict, so at this time, in addition to the Airbnb, extenuating circumstances policy that they’ve they’ve had, we already know that even if we have a strict cancellation policy, Airbnb has shown that they’ll basically go around that. So there’s really no reason to have a strict policy at the moment. I would say those couple of things are the most important. And I guess another bonus thing that we’ve done is, we went back and messaged all of our previous guests, giving them a discount for themselves and for their friends and family if they wanted to make a reservation with us, and we’d give them a 20% off discount. And then for guests who tried to cancel or were asking about cancellation, what we did is we spoke to them and told them all the facts about the virus and tried to kind of ease their tensions that they’ve seen all throughout the media and everything. And basically try to convince them to keep their reservation in place, but just move it to a later date. And also adding on, giving them an extra free night, in addition to keeping the reservation in place. So those are the things that we’ve kind of been doing that allowed us to either keep bookings or get new bookings. And it’s been working pretty well for us. So…

Jaeseok  

I see. Yeah, that’s pretty impressive how proactively you took those actions to ensure that you have good bookings. And so you mentioned that you lowered your price. Now I’m seeing $79 per night? How much was it before all those cancellations happened?

DeShan  

So the listing that I sent you is actually a brand new listing. And so what we do with brand new listings is we try to, when we first list them, we try to be lower than the competition by about 20%. And so taking that into account, and the fact of all the virus stuff that’s going around, we had to be trying to be as aggressive as possible with our pricing. So when, when all of the virus stuff starts to go away and we start to go back to all of the normal bookings and everything, we found that at our area, other hosts have been charging anywhere from $100 weekday to around $125-150 on the weekend. So that’s probably going to be our goal moving forward. But right now, as I said, because of everything that’s happening, and the fact that it’s a brand new listing, we have it at that price. And we also have a dynamic pricing strategy. So the closer we get to a day, if it’s open, the more we’ll lower the rate. So it depends on how far out the booking is, as well. 

Jaeseok

How do you do the dynamic pricing? Do you use any tools? 

DeShan

I actually do it manually, myself. So what I’ll do every morning is I’ll check all of the calendars and try to see what’s going on in the past couple of days and try to reference that across the next few days. So what I usually do is, I’ll look to about 72 hours into the future. And if there are any days that haven’t been booked yet, then I’ll start lowering the price pretty aggressively. And what that usually does is it keeps us able to get bookings at the highest price possible. Mainly because as you get closer to that day, there’s a lot of other hosts that get booked. And so inventory starts to drop. And once inventory drops but there’s still a demand, that allows us to get those higher bookings closer out and also maximize as much profit as we can.

Jaeseok  

Right. So using that strategy, how much of the occupancy rate have you achieved since last year in September?

DeShan  

So I haven’t checked recently, the last time I did check, I believe that our average occupancy was about 87%. 

DeShan

So we’re doing pretty well. The listing that you saw, and that I shared with you, as I mentioned is a brand new listing. And so we actually started that one last week. And so the first day that it could be booked, was actually last Saturday. And since then, we’ve been fully occupied. 

DeShan

…and will be fully occupied for the rest of this month. So since that one’s been available, it’s at 100 occupancy since today, so…

Jaeseok  

And how much are you paying for the rent for this property?

DeShan  

So that property, the rent is actually 1400 per month. It’s a two-bedroom, two bathroom apartment in a smaller apartment complex. 

DeShan

But with that one we actually got a pretty good deal where we didn’t have to pay a security deposit. We didn’t have to pay for the first month’s rent. And so because of that very low. And in that area, it’s an area that’s in transition, so there’s a lot of construction being done in it.

Deshan

But it’s in a really good area, so it’s close to a lot of good spots that are in Dallas.

Jaeseok  

So you’re giving a 50% discount to people who are booking monthly, right? Are you going to continue doing this after all those coronavirus things?

DeShan  

Yeah, so what we’ve noticed recently is because of all of the travel restrictions, especially in our area, we’ve gotten more regional guests or people who were passing through here, but have been stuck here. So a lot of our reservations recently have been longer. I would say probably about a week or so.  

But with our current pricing strategy, we will be trying to get guests for monthly stays or more than a week’s stay. But that is something also that we have to keep in our mind with our pricing strategy because if our calendar is wide open, mainly if it’s open 30 days, and we lower our prices too much, guests would have the opportunity to basically get the property at a very low price. So we do have that in place, though. And I have in the back of my mind when I’m lowering prices, and just making sure that we have that covered in the back end for sure.

Jaeseok  

Right. So can you describe the ideal future bookings that you have? Ideal as in, number of nights that people booked? How would you describe it? Do you get what I mean?

DeShan

Yeah, so for us, I would say that the ideal number of nights would probably be…The longer the better, but probably under a month. We’ve haven’t had too many guests that have stayed that long, but we did have one specific guest that did stay that long and they didn’t take great care of the property. They didn’t destroy it. But there were some items that were broken. And the cleaning after that period of time did take a lot longer than usual. So I would say that we’d like to have guests stay as long as a week to two weeks or so.  Mainly because of the fewer amount of turnovers that we have to do, the more we can keep more profit in our pocket. So that’s usually what we strive to do. But the actual thing that happens is, we’ll probably have guests that stay about four nights, four to seven nights on average. 

Jaeseok

When I looked into your price, if someone book for three to seven days, it was $67 per night. But you mentioned that you’re going to increase the price by 20%. So that is going to be around $80 per night. And if you can achieve 87-90% occupancy rate, that’s gonna be around 2.1k income per month. Is it something realistic for you?

DeShan  

Yeah. So right now, with everything going on, our main goal is to stay occupied. So with that, we know that we’re not going to profit as much as we’d like. But in the end, the occupancy matters more than the actual profit, as long as we’re able to cover expenses. Because right now, the main thing that most hosts are worried about is paying off all of their expenses. So as long as you can make enough to cover the expenses, and you can make sure that’s not a problem over the period of time that all of the events that are happening right now, then that’s probably our main concern. And so because of that, our profit is kind of like on the back end, if we can make a good amount of profit for each property, that’s pretty much a bonus. But as long as we can cover all of our expenses, that’s probably our number one priority.

Jaeseok  

Right, I see. I think it’s hard to talk about the fourth property because this one is quite recent, but the previous ones, when you achieve almost 90% of occupancy rate, what was your net profit?

DeShan  

I would say, quick numbers are on average, our first property is in a different location than Dallas. So it doesn’t perform as well as our properties in Dallas, that’s one of the reasons why we decided to get properties in Dallas. But our first property, that one on average, we make around $600-1,000 in profit monthly. And that’s obviously gone down a little bit, because of the seasonality and the events that have happened, but that’s what it is. And I would say our expenses are our rent, which is 1850. And then our utilities come out to be like $200. Most of our expenses come out to be like to $200 to about like $400 when you add in the cleanings. So that’s what it is for our first property. Then our second property has been doing a lot better. That one usually gets us between like 1500 to 2000 for profit.

Jaeseok

1500-2000? Alright.

DeShan  

Yeah, for profit, monthly, and then the expenses on that one is rent, which is 2350. And then our utilities, which come out to be somewhere around 500. And then our cleaning fees, which probably add on another 3-500 as well, depending on how many guests we have that month. So, those are the main overview of the statistics for those first few properties that we have.

Jaeseok

Right. That means for like your second property, you’re earning above $5,000 per month. Is that right estimation?

DeShan

Yeah, that sounds about right.

Categories
Podcast

Airbnb co-host of 6 houses in Greenville, South Carolina

Here’s a quick summary for you!

Listing www.airbnb.com/h/openhearthgreenville
Vacation Rental Career (00:57) First Airbnb property: 2018 Aug 
First Airbnb co-hosting: 2019 May
Currently co-host of 6 properties: 2020 Mar 
Owner of Airbnb marketing agency – www.bnbthesmartway.com
Key metrics (6:10) Target minimum $160 per night / 65% occupancy rate
In average $3,500 – $4,000 per month in revenue (Assumed $170 / 75% occupancy rate = 3,888) (8:40)
In Greenville, you can get a 2bedroom house around $200,000 (7:10)
About bnbthesmartway.com (9:25) Run Facebook Ads to keep their Airbnb Search ranking up.
Software stack (11:15) Yourporterapp.com 
Turoverbnb.com
Pricelabs.co
Reasons why Renee is co-hosting instead of rental arbitrage (12:45)
How does she find co-hosts? (13:30) Networking
Member of BSI (Business Network International)
Airbnb tips (14:48) A comprehensive 5-6 pages checklist of everything that needs to be in the house 
Small things like ice cream scoop, snacks, water, soda, welcome message on the fridge, 25-page guide book. 
Extension cords wherever needed for guests convenience (eg. near a bed) 
Beach towels for pet owners 
Dog dishes, dog house.



Today’s guest is Renee. She co-hosts 6 properties at Greenville in South Carolina. Co-hosting here means she primarily runs someone else’s property and gets a 20% commission from revenue. She also runs a marketing agency for Airbnb hosts. It’s www.bnbthesmartway.com. Her listing is called “Open Hearth Cottage- 3 miles to Downtown + Furman,” is generating $46,000 in revenue (after paying a cleaning fee, service charge, and supplies). Considering that this type of property can be bought at below 200k, it is an impressive rental yield.

Renee  00:57  

Hi everyone. I’m Renee, I’ve been at Airbnb host since August of 2018. And I first discovered Airbnb and became passionate about it when I was in 2015. Right after I got married, my husband and I were having trouble affording a honeymoon and we were able to, someone told me about Airbnb, and we were able to find a place to stay. And I fell in love with the idea and knew that I wanted to do that one day, I had no idea it was going to become kind of my full-time job at that point. But later, we ended up buying a house. And when we looked for that house, I wanted to make sure that I had a space that I could separate from our living space and do Airbnb. So the house we bought actually had a built-out attic space with a separate entrance. So we could do a one-bedroom, one-bathroom listing from our home. That was an entire guest suite. It took me about a year to convince my husband and let me start but we did begin renting that place out in like I said august of 2018 And I rented that place until it just closed up for an interesting reason at the end of January of this year, but it had great reviews, we had really consistent bookings. And we did about 1200 dollars a month in revenue at that property, which was fantastic. As I continued hosting at that property, I began to learn a little bit more or wondered why my property wasn’t as high in the search rankings as it was when I first started. And why my bookings were slowing down about a few months into it. So I ended up developing an advertising technique that allowed me to keep my properties higher in the search ranking. So after testing that for six to nine months, I ended up offering that service to other hosts in May of 2019 Yeah. And so I ended up offering that to other hosts and started kind of trying to do that alongside my own Airbnb. So one day one of those clients that I did advertising for told me that She didn’t own any of her properties and that she was a co-host. I looked into co-hosting but wasn’t entirely sure that you knew it was going to be something I wanted to do. But she explained it well to me and really helped to train me. Her name is Laura meats and she has a course called co-host accelerator. And she really helped teach me how to be a co-host. And so what I ended up doing after that was in September of this past year. So just September of 2019, I decided I wanted to be a co-host and I got the first property that I managed in October and since then till today, I have done that with five other properties. So actually sorry, six other properties because now I don’t have mine. So I really had seven at one point that my original one is no longer listed. So I’ve had a lot of success with that I’ve been able to get a lot of great reviews and really replicate all that I’ve learned with my home into providing really comfortable safe places where people always say, you know, she thought of everything. And I was able to do that very affordably for my property owners. By furnishing everything, bringing it to my standards and I have a great cleaner I work with and we take care of everything for our owners. So that’s what we’ve been doing.

jaeseok an  

Interesting. You said you are co-hosting with other people and how does it work.

Renee 

So basically what happens is they end up signing a contract with me for at least three months, I get 20% of all the bookings and that is before the Airbnb fees are taken out. And that doesn’t include the cleaning fee. What happens is I helped to set up the property to the way I like it either by adding linens or by completely furnishing it from start to finish we’ve done that before. And then I list the property under my name on Airbnb as with me as the primary host. So really, I’m not technically the co-host, I’m technically the primary host and I’m managing it for them. And so I list that on there and, and run it just like I would any of my other listings and then I use YourPorter income reports to help me at the end of the month to separate out all of the income that I got from each property. And then they have a thing that allows me to show what’s my 20%. And what’s the 80% for the host. So in the first of every month, I send direct deposit checks to all of the owners with their 80% and I keep the 20%. I also purchase all the supplies and things or like small repairs I’ll handle as well. And then just deduct those from the final total that I give to my property owner. So it basically becomes very passive for the owner, where they just sit back and collect the checks while we handle all the day to day running up the Airbnb, and all the advertising. And it really allows us to present a solid brand to our clientele. They know that they stay in a Westbrook hospitality home, that it’s going to have a certain feel and a certain brand. So that’s really helped us keep guests coming back and has helped us get great reviews.

Jae Seok An 

I see when I had a look at the listing that you provided. I found that the occupancy rate for next month is 76%?

Renee   

Last Month.

Jae Seok An 

Right. And is it $200 per night on Average?

Renee  

Actually, in February, we were at 93%. occupancy. But I was a lower average nightly rate because we had a longer-term booking. Let me see it might have been March. It was looking really good until everything change. I guess my statistics are all editing. I’m here as they changed the other 76 was probably for this month before cancellations. Before cancellations. I think we were set to have 76% at 170 occupancy or average revenue per night. But yeah, that all changed. That is our goal with this property is at least $160 and at least 65% occupancy. 

Jae Seok An

So, right that leads to somewhere between $3,500 to $4,000 or even higher than that amount, which is Yeah, I think that’s a pretty big number considering the housing price in Greenville around $200,000 for 2 bedrooms,

Renee 

yeah, well the housing prices in Greenville are still kind of at the national average. But for us who’ve lived here a long time it is a little high. This house though the owner is doing very well on because she was able to buy it and really fix it up she actually did a lot of of the design in that house and we just came in and did a little bit at the end, but she was able to fix it up so she doesn’t have a lot of expenses in that house. So she’s doing really well with that. But yeah, the average price in Greenville is probably around you know, 200 to 250. Now, it used to be 130. But what I normally tell people is if they can buy between, you know, anything under, 200 normally we can make it work for them after my 20%. Where they’re coming out with a pretty good return on their investment. And so that’s another thing I do for my property owners is I do give them an estimate of what I think the revenue could be based on the comps in the area so that I can help them make the best decision moving forward.

Jae Seok An  

Well, so that means right let’s say the housing price is $200,000.and you’re making $4,000 per month, which means that it is going to be around $50,000 every year of the just gross profit.

Renee 

that’s the revenue Yeah, we gotta take out the 3% to Airbnb and we got to take out you know, that 20% that goes to me But yeah, the gross should be around there. These are all like I said, pretty new properties. Yeah. So um, we are working hard to get them up there. And a lot of them were really gaining steam before all this happened and I think they’ll go right back to doing well, afterward. Thankfully, one of our biggest seasons here is actually the fall, because we have Clemson football, as well as like all the leaves. So I’m really hoping that at least by fall, we’ll be doing really well again, and hopefully, I’m thinking everything will pick up again in July, though, um, you know, of course, no one can know,

Jae Seok An

what’s the service that you’re providing? Is it a software? Is it consulting?

Renee  

No, it’s basically we run Facebook ads in order to help people keep their search ranking up. So we have a one time fee for creating the ads and then we can manage it for free for up to six weeks, sometimes a little longer. And then after that, it’s a monthly fee to manage their ad. But basically what we do is we’ve determined that sending traffic through Facebook ads to your Airbnb listing shows interest in the listing and Airbnb will put you higher in the search ranking. So we create an ad for people’s listings that we run into That will help to keep that search ranking high. Just kind of easy explanation. And then every week on Monday, we send a report of their current ranking and how their ad is performing. And we work on making that better every week. So I’ve helped so many hosts you can see on my website “www.bnbthesmartway.com” you can see all the results that we’ve gotten for hosts. So we’ve taken people from not being on any of the pages all the way to page one or page 17 to page one. We’ve had clients in the UK, Philippines, Kenya and all over the US. So we do have free evaluations you can sign up for to see if it’s even a good fit for you but that’s one of the secrets to kind of keeping my places booked as keeping my properties high on the search rankings so that when people do come to Airbnb and look for a property I’m one of the first ones

Jae Seok An  

that they see awesome, understood. Are they paying for a fixed fee?

Renee  

A one time fee to me for ad creation and then they pay the face the advertising costs to Facebook. They don’t have to pay attention to regular monthly maintenance fee, we teach them how to take care of their ad themselves. Yeah. Or they can choose to pay us $35 A month after that initial free period, excuse me so that we can run it for them.

Jae Seok An  

Okay. And what’s the software that you’re using for you for running your Airbnb is that

Renee  

I use “yourporter.com” and “turnoverbnb.com” mostly, and that’s about it.

Yeah, I think that’s it. Oh, and I use “pricelabs.co“. I love Pricelabs. I used “usewheelhouse.com” before. And I switched to price labs in January and I’ve been really happy with them. They actually have a special pricing tool called coronavirus that they’ve developed an occupancy-based pricing system. That is, you know, what they recommend you turn on for right now to try to get some bookings and I have gotten a handful of bookings. But of course, I’m also looking more at that longer-term situation. So I use Pricelabs. So those are the three Pricelabs YourPorter and TurnoverBnB are the ones I use I’ve used you know, other things besides turnoverBnB, I used it like Google Calendar, but it’s just not quite as great as turnoverBnB. And my cleaners really appreciate the efficiency of turnoverBnB and the way it allows them to leave notes and checklists and things like that. So that’s what we’re using, but YourPorter is a lifesaver. They are my channel manager between VRBO and Airbnb, as well as my automated messaging. I do a lot of automated messaging for check-in information and things like that. I use their auto review feature as well for good guests. And it gives me my income reports that I use for accurately figuring out what I owe all of my owners. So that’s a huge software that I really love and I use a lot.

Jae Seok An  

Do you have any plans to buy or rent your own properties to run it without doing costing one day?

Renee  

Yeah, I don’t have the funds right now to buy my own and I don’t have the funds right now to do rental arbitrage and don’t have enough in the bank to cover what like three months If coronavirus happens so that is in the plans but it’s looking like it’s gonna be it’s been a lot of craziness in my personal life in the past year that has changed a lot of the plans I had so for now co-hosting is fine I really enjoy it and I’m making good money doing it. I think I sometimes saying co-hosts might do better than people in rental arbitrage and we have a lot less risk. So right now that’s the model that works for me I would definitely like to buy, but only once it’s wise to do so for me.

Jae Seok An  

How are you doing with finding the properties to co-host? Do you run Facebook ads?

Renee  

Just networking honestly, I’m a member of something called BNI business networkers International. It’s a networking group and they have found three of my six houses and the other, some just, you know, word of mouth, getting my name out there. I haven’t really paid for any advertising. Just people know what I’m doing. They’ll tell people and that’s just kind of how it’s spreading. I do want to start doing some local stuff. seminars with people and investors are especially people who are worried about the stock market now looking at a different way to invest, I want to do some seminars to educate them on this opportunity. But I haven’t honestly had the time I’ve been so busy setting up the leads, I do have and you can’t kind of outgrow what you have, you know, I need to make sure I’m taking care of everything I have. first, before I push too hard for acceleration. And then of course, with COVID, everything is changing, but I do still have several people interested. And later in the year, I’ve probably got three or four homes that are kind of pending to for sure. One investor is gonna buy soon, one investor that wants to buy one person’s gonna start July, and another house that probably before the end of the year will start as well. So I’ve got a lot in the pipeline. And yeah, just go from there.

Jae Seok An 

Tell me about your secret of getting 4.9-star reviews.

Renee 

So the thing is, well, first of all, we always have a very comprehensive checklist of everything that needs to be in the listing. We’re talking like five, six pages. So we’ve learned really well like math like every kitchen implement that I feel like is necessary because we don’t want to like Like, for example, it’s really easy to forget an ice cream scoop people would really appreciate ice cream. At least in the US people love ice cream. So things like that. We provide some snacks and water and soda, we provide like one water for each guest and then a couple of soda options. Half the time people don’t drink them, but they always appreciate seeing it. So it’s like a win-win. And if they do drink them, then we switch them out, I provide a little snack basket for each guest. I have a little welcome message on the fridge with all the rules I have a huge 25-page guide book to the area with everything you’d want to do with ours of the places the address and how far away it is from everything that took me like forever to develop that I put in all my properties. Another thing I have, it’s very easy and very cheap as I use these kinds of an extension cord, things from Target that have like three plugs and then two USB ports on them. Yeah, and I put those and I take a Velcro-like Velcro thing and I Velcro those to the nightstands or to the wall next to the bed or to the end table where it’s easy for people to plug their phone or computer and so right for an outlet, so I put like seven, eight of those in each house. So there’s no hunting for outlets. I’m always thinking of where are they going to charge their phone? Where are they going to plug it in? So things like that. What else do we do? We use white linens we make sure they’re very nice for them. We use makeup towels that are black. When I have houses that allow dogs I get some really ugly beach towels from Costco and I hang them next to the door and a basket next to the door and I have a cute little frame and it says you know these are dirty dog towels for dirty dog paws dog messes or any big mess and that saves my white linens and right that makes them feel comfortable. If it rains they can drown their dog paws. With dog houses. Sometimes I’ll put in a dog bed or something dishes for their dog are little treats for their dog as well. So just all those little touches. Oh, and then we put York peppermint patties on each bed and a little dish as well. So all those little touches really make people feel like it’s special and makes it feel like they’re right at home.

Jae Seok An  

Thanks so much for sharing. 

Renee

Nice to meet you. Yeah, thank you and have a nice day. You too. Bye.



If you enjoyed this episode, why don’t you check out Teri’s story and Umar’s story?

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