How to Airbnb your way to financial freedom
We went from employees in corporate America to world travelers, all because of our Airbnb business.
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When I met my wife, Susan, more than 6 years ago, she mentioned that one of her goals was to spend a lot of time exploring Central and South America. It had been a dream of hers for years, and while the idea was immediately appealing to me, the ability to take a year off didn’t seem feasible given all of our other obligations. As a result, whenever this idea would come up, we’d usually talk about it and then end the conversation with a “someday we’ll do it”.
Both of us were working full time. I owned a small ecommerce company and she was working at a large tech company. This was pretty much how we’d always done it. Although work was always enjoyable, we continued to talk about the goal of taking a bit of time off to travel together. One day, when we went out for a long walk, we came to a realization that “someday” would be very unlikely to happen if we didn’t come up with a specific action plan for turning our dreams into reality. If we really wanted to take time off, we had to figure out how to make it happen.
How It All Got Started
We had several key goals. We wanted to be able to have the flexibility to take time off and spend half a year or more in Central and South America, but we also wanted to have the financial stability of an ongoing income. It was important to us not to simply burn through our savings while we were away. We weren’t, and still aren’t, willing to put our whole financial situation on hold.
To make our travel goals happen, we needed to develop a strategy for continuing to have revenue streams coming in even if we’re away from our full-time jobs.
Airbnb Enters the Picture
Once we solidified what we wanted to achieve, we started to consider what options were available to us to generate additional passive income.
One concept that we kept coming back to was Airbnb. We’ve been avid users of Airbnb as guests for years. We’ve been using the service regularly - pretty much whenever we’d travel to a new destination, this would be our first choice and we always really enjoyed the experience.
We’ve considered what it would look like if we started to host other people. We toyed with this idea for quite a while , but were always a bit unsure about the next step and whether we wanted the hassle associated with becoming a host. After all, at that time, we already had a jam-packed life with full-time responsibilities.
Around that time, I happened to purchase my first apartment. After a bit more consideration, we decided to do an experiment with it and list a portion of the space on Airbnb.
There were a few things that were important to us from the outset. We wanted to design our Airbnb listing in a way that would allow us to operate it on the side while we maintained our full-time commitments. We also wanted to make sure we could operate it remotely when we were outside of the U.S., as we planned to travel at least a few times per year.
We’re tech-savvy marketers, but these Airbnb hosting hacks are great for anyone
Both of us come from tech and marketing backgrounds so, naturally, we wanted to approach our Airbnb in a very structured, data-driven way. It was also important to us to augment the experience with technology wherever possible.
We spent about a month studying the market, setting up the bedrooms, and hiring a local housekeeper to help us with turnovers. Then we launched our listing.
To our great surprise, even though we were just renting out private bedrooms with shared common areas and bathrooms, we got our first reservation within an hour. That month, we ended up generating over $7,000 in revenue from one apartment.
This blew us away--this was almost the size of my monthly paycheck and yet we were able to generate this income on the side, with a fairly limited time commitment.
At the end of the first month we knew that Airbnb would be a huge game changer for us.
How we set up an *almost* automated Airbnb hosting business that hosts close to 10,000 guests per year
Here’s where we get into the nitty-gritty. We want to share how we set up our Airbnb in order to help anyone else who is considering getting into the vacation rental game.
We mentioned earlier that we focused on a data-driven approach. As such, before we even launched, we studied the market using a tool called Airdna.co. This tool analyzes all of the existing short-term rentals on the market to find--their occupancy rates, daily rates, approximate revenue numbers--so you can predict how well you can expect a property to do. This was quite critical for us to feel comfortable, as we had a pretty good idea how our competition was doing before we even launched.
After we went live we realized that if you jump in and try to handle everything manually, your Airbnb can quickly become overwhelming to manage. - This is especially true if you’re running multiple properties. In fact, it’s almost impossible to really scale it if you’re doing this all on your own--you’d essentially be creating a 24/7 job for yourself.
How we automate various aspects of hosting:
Automated Check In and Check Out
We utilize keyless, digital locks that enable us to create a code for every guest when they check in. These locks can generate new codes for every guest which makes it very easy to manage the coming and going of guests. The codes expire when the guests check out.
Typically the most time consuming process is guest communication and sending instructions. This includes details on how to check-in, how to use everything inside the house, how to check-out, and so on. There are usually five messages that we’ll send to every guest over the duration of their stay. Once you have multiple guests staying with you at the same time, this process can get out of hand quickly.
Fortunately, we solved this issue by using Smartbnb.io. This nifty service allows us to automate all of the check-in and check-out communication for our guests.
We then use the same tool to automatically notify our housekeeping staff about which rooms are checking out when, so they can plan their schedules and come when they need to. Voila--everything is now humming along automatically without us needing to send a single message.
Moreover, Smartbnb can even detect questions about parking, early check-in, and so on in order to send a pre-written answer to guests.
Some people believe that automation takes away from the spirit of Airbnb and hospitality, but we see it differently. By automating mundane tasks that require zero thought or creativity, such as sending check in and check out instructions, we actually have more time and opportunity to engage with the guests that have more unique questions or situations.
A typical host approaches pricing by picking one number for the weekends and one number for the weekdays. That approach actually leaves a lot of money on the table.
There’s a reason why hotels, airlines, and other industries adjust their pricing regularly depending on the demand, time of year, and myriads other factors. A weekend when there’s Super Bowl in town should command a higher rate than a regular Saturday night and so on.
This is where technology comes in again. There are a couple of tools available on the market, such as PriceLabs, BeyondPricing, and UseWheelhouse that help Airbnb hosts with price management.
These services monitor the demand, competition, and occupancy of your listings and those of your competitors and automatically adjusts pricing for every single one of your listings every single day. You can set the strategy that you prefer—be it higher average daily rates or higher occupancy rates—and the software will make adjustments to help you get there.
It gives you the same sophisticated algorithmic approach that hotels benefit from when they adjust their pricing to ensure maximum revenue, and it usually costs just a few dollars per listing per month.
Help on the ground
Lastly, and perhaps most importantly is, getting help. From the second month onwards, we hired a great housekeeper who is in charge of turning over the house between guests. She also introduced us to a fantastic handyman that filled in the second piece of the puzzle--maintenance and upkeep of the property when things go wrong. This element is key as that’s what allows you to step back from the day-to-day responsibilities. If you’re doing all of the turnovers and maintenance yourself, this becomes a job--not a path towards financial freedom and career flexibility.
Getting help and using these tools is the key element of what makes Airbnb into a semi-passive investment & income, as they dramatically reduce the amount of time you need to manage your listings.
Path to financial independence
After about half a year of running the first property, we ended up acquiring and fixing up another house. We came across a property that was within our budget, but needed a significant amount of work. We felt comfortable with that project and we took it on.
Within about a year total, we had both properties operating and hosting guests from all over the world. We continued to work full-time, while managing these properties on a side and fine-tuning our processes to make the entire operation more efficient.
After some more time passed, we felt that we achieved a key milestone.We had enough cash flow coming in that we could both take some time off from our work and no longer have to dip into our savings to maintain our lifestyle. We also felt that we’d set up most of the systems in such a way that the properties could be managed 100% remotely. This meant that we were ready to make our dream come true.
Our year away
We decided that the best way for us to travel was to undertake the ultimate road trip--a 20,000 mile journey from U.S. to Argentina. In late 2017, we found a 20-year-old Toyota Land Cruiser that was perfect for us, outfitted it with everything we needed for the trip (including things like a rooftop tent, small kitchen, and storage for everything we’d be bringing).
We then spent the next 7 months traveling through nearly 15 countries in North, Central and South America. It was a life changing experience for both of us--that story could probably take up its own full blog post!
During our time abroad, we were able to continue to manage our properties with a phone and an internet connection (thanks T-Mobile for free internet worldwide!). The systems that we setup prevented, or automatically handled, many of the common issues that occurred in our Airbnbs. We were always able to deal with anything beyond that, whether we were at a campground in Guatemala or a highway in Bolivia.
What we learned about Airbnb
Our experience with Airbnb changed the direction of our life. It’s important to highlight, however, that this is not a get-rich-quick or a become rich with no work sort of thing.
Rather, it’s about slowly building wealth and income through smart real estate investing and management. It’s not necessarily effortless or easy, as it can be both an art and a science. You have to be a little bit of a real estate developer, contractor, interior designer, handyman, marketing expert and a hotelier all in one. But it is all doable and it can be extremely fun and rewarding.
Airbnb did not simply replace our regular income, but it gave us something more important--the freedom and flexibility to decide how we structure our work, our time and our lifestyles.
About Boris & Susan
Boris & Susan are experienced Airbnb hosts and real estate investors hosting close to 10,000 guests per year around the country and managing their properties remotely while working full-time.
They write more about their experience, as well as help other people get launch, scale and automate their short-term rental properties at www.BuildYourBnb.com
Drop by to say hello or email them at [email protected] with any questions you may have!