Dollars and Hops

045 | Airbnb Investing and STR Strategies - Part 2 | What Happened to FTX? | Choosing a Career Path

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Money Hack of the Week: 30 Day financial audit / challenge - put in spreadsheet/categorize it

What type of investor are you?

  • Co-host- someone who is managing someone else’s property and is taking a management fee.  Management fees are typically between 25-35% and you manage marketing, guest communication, cleaners, maintenance, etc….
    • Great way to have a side hustle that is super flexible in nature.  Generally when a property is automated, it only takes 2-4 hours a week to manage the property.
    • Rental Arbitrage- Rent from a landlord and sublease on Airbnb to guests.
      • Downsides are - landlord can terminate lease and Upfront cost of furnishing without guarantee of long term lease
      • Buy and Hold - buying a house/condo/apt and renting it out on Airbnb.  Capture the long term appreciation and the short term cash flow.

        • General:

        • Invest in a training program.  This is truly a business - learn from someone who has already done it.  It may cost you $1k to $2k to buy into a coaching program, but it’s 100% worth it.  It will dramatically expedite the learning process.
        • Make sure the local county and city allow short term rentals
        • Avoid HOA’s if possible as they could ban STR’s.
        • Look for unique homes

          • Evaluating an investment property:

          • Have an investment analysis spreadsheet - can get these from others for free online
            • With this spreadsheet, it will take an all encompassing view of all the expenses you need to think about when operating a short term rental.
              • Will include mortgage, set up costs, down payment, monthly maintenance, utilities, trash, TV, Internet, HOA, Landscaping, etc…
              • Air DNA, STR insights, Data Rabu
                • These are tools that scrape the data from Airbnb/VRBO and forecast how current and active STR’s are doing that are on the market.  This can help you get a gauge on what is possible from a revenue standpoint.
                • Help to forecast how much a home can make on Airbnb
                • Cash on cash return:
                  • Using an investment analysis spreadsheet, calculate your cash on cash return - this is the number of years it will take to get your money invested back.  Typically - 25% or better is a good cash on cash return.  That would mean you would get all your money back on the investment within 4 years, and then from there you’re just making profit.


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