We’ve all heard most millionaires have 7 sources of revenue. With that in mind, are you considering short-term rentals as your next revenue stream?
If so, this episode was made just for you! In it, I talk about the two initial strategies Airbnb hosts decide between when entering the game.
There is no blanket “right” or “wrong” strategy here. It’s all about what works best for your family and your situation. And it’s all about what will help you achieve your unique goals.
So, without further ado, let’s talk about those two strategies and help you move forward in making a decision about how Airbnb can best work for you.
Want to grab the freebie I mentioned in this episode? Come on over to ginnytownsend.com/rental to claim access to this pretty powerful tool.
Until next time, continue to be up and to the right.
What’s up, Podcast Nation! Ginny Townsend here, and I am so thankful that you’re here listening with me, and I’m pretty darn excited about this episode. So if you are here in the states, I hope you had a lovely Thanksgiving and as I’m recording this on Black Friday, I hope you’ve done some incredible shopping. Got some great deals, but now let’s let’s talk about business. Right? Let’s talk about adding Revenue.
It was not just spending, right? So if you caught the previous episode I talked about how I was pivoting and by pivoting I mean adding to expand what I’m talking about not just making the most of digital assets but also tangible assets that we have in our lives or that we have access to or that we may be looking to acquire and some conversation that I keep having like it.
It even since I recorded this last episode. I’m astonished at how many times Airbnb has come up in conversations again? If you missed the previous episode I talked about how it was an accidental six-figure host. It wasn’t necessarily a strategic move to get into it. But once we got into it and realized how much I loved it and we’ve met some really cool people and it’s been an incredible source of Revenue over the last few years. I really wanted to bring it to you as well.
So because I firmly believe that adding in new revenue streams, is how we Achieve Financial Freedom. This is how we achieve time Freedom right the average millionaire and let’s just take that phrase with a grain of salt has about seven streams of Revenue. So if you are a part of a couple and you each work, okay, that’s two streams. So let’s figure out the other five right or maybe you’re in a one can income.
Let’s figure out the other six and what I love about Airbnb is there’s a lot there are a lot of ways to participate and that’s actually what I wanted to talk about today. Now, there are I would say we can boil it all down to two strategies to being a host on Airbnb and actually bringing in this Revenue stream. It can be as fast as
By this month, I mean you could have a listing and be accepting guests. I’m recording this on Black Friday which by the way, I hope everyone here in the states had a wonderful Thanksgiving but by December 1st, I mean, it’s it could be the fastest thing in the world or it could be a more involved project. So here are the two strategies that I see continually working for people on Airbnb regardless of the pandemic and everything.
Off and the first strategy is to actually rent out a part of your space. So that’s obviously the strategy that if you wanted to take some photos and list it 10 a’ight. I mean provided you have good lighting for the photos and all that. I’m sure you could have guests or at least people asking about your place by December first and then the second strategy is renting out an entire property. So this could be your own home like when you’re out of town or if you have family.
Nearby that whenever you have someone book out your place you have somewhere else to go stay which can get a little complicated whatever but it’s a potential property or as potential strategy for using your property or you could invest in a separate property to rent out as a furnished rental short-term rental. So those are the two strategies rent out a room or a guest house that you may have or a mother-in-law Suite that you may have or the entire property.
So let’s get down to brass tacks. I figured going through pros and cons and then giving you some resources for figuring out which strategy would be best for you is that’s where you got to start right? And once you have the strategy in place, then we start working through making sure you have everything in place right like designed or decorated to fit your avatar traveler making sure your listing is optimized.
Making sure it catches the eye there’s so many there are so many amazing ways to get continuously booked and I’m happy to go through them. But figuring out your strategy is the first part. It’s the first part of this journey. So okay renting out a part of your space like a room or a mother-in-law Suite or if your property has like a guest house or something like that. Mmm. Yeah, but I would even consume consider a GuestHouse in this strategy for
Because of the pros and cons, I’ll be listing. Okay, so Pro for this strategy is renting out a room is a great way to test drive the whole short-term rental strategy now while I love it and it’s been an incredible, you know Revenue stream. It’s been a great adventure. I also know that it’s not for everyone. So it is I think incredibly smart to do a test drive or a test run to see what
Then think about the process and you know as many of you may have heard me talk about this but this strategy I think also really hits one of my core beliefs or my core tenants for achieving Financial Freedom. Is it allows your asset your home your apartment your Guesthouse your mother-in-law Suite whatever it is to work for you?
And so obviously I think that is the strongest Pro is it’s it already exists. You already have it covered with your mortgage or your rent. But you already have the place now. There are a couple of Cons with this as you might imagine. I would say is a limited audience a more limited audience. How about that I have
Actually every time I’ve looked on Airbnb for traveling for myself or for my family. I’ve always looked for the entire place. I’ve never actually booked just a room but that’s always been for the reasons that we’ve traveled but that’s not everyone. So while many people want the entire place to themselves, that’s not always the yeah. As I said, that’s not everyone so…
But it might be a little bit more limited in your audience. But you owe you never know. You never know especially considering where your place is because sometimes that’s just the perfect. That’s the perfect Avenue for for for someone wanting to come to where you live for whether it’s work or vacation, whatever but it might be a perfect fit for your specific case. So that’s one con and I would say another con is a less Revenue potential and it is for that, you know.
That makes sense. Right? If you’re renting out a room versus a whole place. Obviously, you will charge less per night. And if there is a little bit more limited audience will get fewer bookings. But like I said with the con it’s an asset you already have so it’s not necessarily anything out of pocket for you and here is another con that I think might be
It’s the one that you’d have to think about the most in your unique situation is you would technically be inviting strangers into your home while you’re there. So whether or not you feel comfortable with that and there’s a lot of ways to connect with potential guests on the Airbnb platform or VRBO or HomeAway or any of the other short-term rental platforms to get a sense of why they’ll be in town and it gives a sense of who they are and obviously these different platforms allow you to verify who they are.
So there are a lot of ways to mitigate that con, but when it comes down to it, you’ll be inviting strangers into your home. So, you know take that into consideration with your circumstance, right? Okay, so moving to the entire Place strategy. So like I said, this could be your home when you’re out of town like you just have it, you know only available for rent when you’re out of town or you could be
Investing in a separate property that is geared towards short-term rentals vacation rentals and such. So the entire Place Pros, I believe you have a little bit more of a broader audience. Like I said that the, you know a couple of minutes ago, I only search for entire places. I know most, you know, I know a lot of people only search for entire places so you may have a broader audience and with that more Revenue potential so if
You have whereas one room may sleep obviously probably no more than two. Maybe two and a baby or something like that. Whereas an entire house can sleep six obviously people would be more willing to pay a higher amount to sleep six people than they would to sleep too. So it just makes sense that your per night would be higher than you might think, depending on, you know, your unique situation where
Where it’s at the seasonality all of the different unique factors that go into short-term rentals. Typically an entire place has more Revenue potential and then it also is I guess a pro for you and for them but it gives them and you more privacy and we do love our space right? We absolutely love our own space. So those are the pros now the cons would be
If this is your own home that you rent out when you’re out of town that would obviously limit your ability to make money to when you’re out of town or like a reference at the top you may if you have family close by or whatever and you just whenever it gets rented out you can go stay with family. Okay, you know, there’s some Logistics there, but you know, I think that falls
Under the con category, if you’re renting out your own home and it’s only when you’re not there, there’s a limit. There’s just a limit to the number of nights per month right or per season. And then if you go with the strategy of investing in a property with this in mind altogether for a short term rental, obviously, it would cost more to set up but in the end, there is no right or wrong strategy like across the board there is
What is the best strategy for you and your situation and your family and your goals? Right? So if you are at all interested in short-term rentals by short-term rentals, I mean Airbnb which kind of has the name there the category king of this industry, right VRBO home away and then there are so many other more Niche sites, which are pretty dang cool. But a lot of traffic goes to those three, here’s what to do next now.
An important thing but it’s also wildly simple it’s but it’s just it’s the next step in this process. So I want you to ask yourself one question. What dollar amount per month would move you into the yes column if you’re considering do I do short term rentals. Do I not what dollar amount would move you into the yes column.
Is it under 500 or is it about five hundred dollars? Would that be like, you know, what an extra $500 a month? Yeah, I’d be willing to do a short-term rental.
If that is the dollar amount that you’re looking for, I think renting a room totally doable to hit that number for you. If you are looking for over $1000, I would say an entire house might be better suited to help you reach that number obviously like I said, I don’t know where you live or you know, the dollar the nightly rate in your area all of that. These are just broad Strokes.
Oaks right but it’s a great place to start so, you know, I okay if I want to make more than a thousand dollars. All right, let’s take a look at how would we be able to do an entire house or entire home entire apartment? Whatever that is a pretty dang simple next step. Right. So I’ve got a lot more actionable next steps as you pursue this potential Revenue stream, and I’m glad that you’re here and along for the ride. So before we go, I’ve got a free gift for you to help you as you figure out like all right, which strategy is right for me?
What can I bring in? What’s my rental potential? Right? Okay, I have it’s a free tool that I use and I love that helps me estimate a properties rental potential on Airbnb and I’ve done some pretty extensive manual estimations and this tool has always been within about three percent of those rather robust estimations that have involved spreadsheets and whatever but this tool you actually just enter the address.
And it will tell you based on your area. It takes a look at how many bedrooms which again is a huge indicator for how much you can charge a night and it takes a look at your area and how much you could estimate being booked per month like a percentage of the month and gives you a really strong estimate as to an annual potential. So I am not an affiliate with this company, but I do.
Do love this tool and they do have other paid resources. But this I think is it’s not even 80/20. I think it’s 90/10 if you’re looking to see that. Okay, what’s the range for gas like for the potential of this place? Check this out man? It’s the easiest thing you’ll do today. So if you’d like to gain access to this free tool come on over to GinnyTownsend.com/rental and I’ll send you the details.
So thank you again so much for joining me. I really do hope that this brief conversation has helped you see okay at any rate we can get wherever we are, whatever our circumstances we can probably get into the air B&B hosting game and there is a strategy that’s right for me. So until next time and I can’t wait until next time continue to be up and to the right.