Are you considering the addition of a short-term rental to your income portfolio but where you’re looking is a few hours away?
If you’re worried about the “risk” of having an Airbnb or VRBO that’s not in your city or town, this episode was created just for YOU!
Here’s my approach to risk in this (and every) business: I take a look at each risk, one by one, and do what I can to reduce or eliminate the risk altogether.
Take a listen to learn more!
Previous episodes I referenced today:
Are you looking to add a vacation rental to your portfolio but aren’t sure where to start?
Do you know this is THE YEAR for you to diversify your income streams?
If so, I’ve created the program JUST FOR YOU!
I’m putting the finishing touches on it right now but you can get your name on the list and be the FIRST to know when it goes live. Hop over to ginnytownsend.com/rental to secure your place in line.
Thanks again for joining me today. And until next time, continue to be up and to the right.
And if you’re curious about how much you could potentially earn with an Airbnb in your area, I can send you a free and pretty powerful tool to help you estimate…
Visit GinnyTownsend.com/estimate to claim access to this powerful free tool!
Thanks for joining me, and until next time, continue to be up and to the right.
What is up Podcast Nation! Ginny Townsend here and thanks for joining me for another episode. Now. I want to Dive Right In because I think this is a fantastic question. I’ve had a couple of people asked me this as they’re exploring adding a vacation rental to their income portfolio and it is is it risky to own an Airbnb that is farther away. So, you know not in their town or city, or maybe it’s like an hour or two hours or more away from where they live. Is that risky?
And I think that that is a phenomenal question. I think that’s really obvious that’s business-savvy asking that question right there. And here’s how I’d like to take an approach to any kind of question that has to do with risk and it is to see how can I either eliminate or reduce it? How can I reduce this risk, or how can I eliminate it because if we build in systems to be able to either reduce or just completely eliminate the risk that
At risk is no longer a barrier. Right? So I like to take one risk at a time risk by risk and then figure out how to like I said either minimize or eliminate it now in previous episodes, I’ve talked about the risk of you know, a changing economy, whether it’s an up economy a down economy and a pandemic economy. Whatever the kind of economy. How can we have Evergreen demand? Like how can we have consistent bookings? And
There are ways There Are Places actually that you could invest that might be a little bit riskier from an evergreen perspective. Like I was saying, you know a mansion in Malibu probably does really well in up economies. I’m sure there’s a demand for in down economies, but it’s probably not getting booked out. I you know, I don’t know anyone that owns a mansion in Malibu to be honest with you, but of all of the different types of properties, that does not strike me as
An evergreen property. So in my mind, that would be a risk that I would not want to take on that kind of a risk, but if I can reduce the risk of their being abs and flows to demand and bookings for my place, that would be choosing an evergreen location and more of like an evergreen size even right where we’re about like maybe four or six guests can stay and so I’ve gone more in-depth in
Episodes about that but here’s another question about risk. So how do I make sure that I cover my expenses and then not just cover my expenses but actually make a profit. That’s great question right like the risk of having to go out of pocket on something like this and then, you know the risk of not singing a cash flow month after month year after year and there are some really powerful estimator tools that I have mentioned in previous episodes and a link to these by the way in the show notes and
As well as the course that I am just wrapping up. I can’t wait to tell you all more about it, but there are ways to approach each of these potential risks and say okay. I want to either eliminate this or at least reduce it right and think of other areas of life that have nothing to do with income properties like this, you know driving is quite honestly very risky right statistically speaking.
So we eliminate (well, we don’t eliminate) but we reduce our risk of injury by wearing seat belts and driving cars with airbags, right or think about it this way like we want to reduce the risk of losing everything in a fire or whatever, you know, we ensure our homes, right and then I mean in more normal times too when you’re traveling and you’re not you’re like, I don’t know if those dates will work quite well, but you want to like book a great deal. You can always buy trip insurance, right?
There are ways to mitigate the risk for pretty much anything that we do in life. And I think we approach it differently and things that are outside of business, right? We just we put on our seat belt, right that’s not necessarily a business decision. But that is a move that reduces risk. So going back to Airbnb and is it risky to have an Airbnb that is outside of driving distance or a little bit longer of driving distance and I would take the exact same.
I would want to mitigate the risk. Do you risk it if you’d like and that usually involves creating a system for it. I mean think of it this way, I believe it’s important to have systems in place to manage an Airbnb. Even if it is in your literal backyard. So regardless of where your vacation rental is where your short-term rental is I think is important to have systems in place to make sure that you can be as hands-off as possible. So by systems, I mean
Cleaning and maintenance and guest experience all of that. Those are systems that need to be put in place regardless of where the air B&B is. Yeah, even if it’s in your literal backyard, so really the only system that I feel like is important for lowering the risk for a longer distance Air. B&B is what I call having a local team sober.
As you can’t put eyes on your property on a consistent basis. I think it’s really important to have a local team and by local team. I mean someone who is in that neighborhood or if it’s not in a neighborhood. Let’s say it’s like a cabin someone who lives nearby who you have met you’ve built a little bit of a relationship built a little bit of rapport with and they can be your eyes and ears on your property and I don’t necessarily tell
tell them that they’re part of my local team. That is just how I kind of categorize making sure that I have everything covered because our first Air B&B the air B&B where we made more than six figures we were depending on traffic and you were between three and four and a half hours away. So we really couldn’t get up there that often and our neighbors several of our neighbors had my mobile number and I told them hey if you see anything
Doesn’t look right you reach out to me immediately, you know, and then I would check in and just say like hey just want to say hi. I was thinking about you. Hope you’re doing well. How are your kids like, you know maintaining a normal kind of human relationship so that it’s not like every time you talk with them. It’s bad news. You don’t want to frame that in a relationship, right? But setting that up making sure you have people who can be your eyes and ears it significantly reduces the risk of just the uh,
Unknown, right? And so if you have someone who’s looking out for you who can tell you if something doesn’t look right or if like, you know, there might have been some damage from a storm or something like that. They can send pictures or whatever. You know, it’s just it really does pay dividends to have what I call your local team in place and that’s really the only additional system. That is when I am looking to set up an Airbnb whether it is literally in my backyard.
Or farther away the only additional so system I build in is that local team? So I know this was a little bit of a brief episode but I feel like why take super long to answer question if you can do it really succinctly and briefly because I respect your time and I hope you’ll respect my time, right? Alright. Well, thank you so much again for joining me today and until next time continue to be up into the right.