3 Problems With Owning An AirBnB That No One Talks About!
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- čas přidán 5. 12. 2022
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These are very valuable info for anybody who wants to get rich. Unfortunately, most people who will watch this video will not really be able to apply the principles. We may not want to admit, but as Warren Buffett once said, investing is like any other profession-- it requires a certain level of expertise. No surprise that some people are losing a lot of money in the bear market, while others are making hundreds of thousands in profit. I just don't know how they do it. I have about $109k now to put in the market.
Understanding personal finances and investing will most likely lead to greater financial independence. By being knowledgeable about money and investing, individuals can make informed decisions about how to save, spend, and invest their money. I know someone who made over $350k in this recession influenced market, but to the best of my knowledge, it was through a financial advisor.
This is precisely why I like having a portfolio coach guide my day-to-day market decisions: with their extensive knowledge of going long and short at the same time, using risk for its asymmetrical upside and laying it off as a hedge against the inevitable downward turns, their skillset makes it nearly impossible for them to underperform. I've been utilizing a portfolio coach for more than two years, and I've made over $800,000.
Impressive can you share more info?
Angela Lynn Schilling is the licensed advisor I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
She appears to be well-educated and well-read. I ran a Google search for her name and came across her website; thank you for sharing.
I own an Airbnb and haven’t yet had them trash the place. I would highly recommend pricing it high to eliminate college parties.
I have low fees and give large discounts to longer term. I get travelling contractors nurses and students. I make more on longer term and its less work. It’s an attached suite so parties don’t happen. I’m in the main house.
I’ve had non paying tenants and past tenants that trashed the suite and a hoarder. Never going back to regular renting. With B&B you get paid for sure as well as insurance on repairs for damages you don’t get with renters. Ramsey exaggerated . Renting is no different. I had one tenant cost me $5000 in repairs and stiff me on rent with no landlord rights in BC Canada 🇨🇦 tenants have all the rights and evicting them can be impossible.
My mom quit her B&B because she was collecting cleaning fees and doing it herself and it became too much work. She ended up renting it for a 3 year term and the tenants completely trashed the place. With air B and B you can keep it up keep it clean and made aware of what’s going on inside. It’s very rare a tenant will do anything about wear and tear so after three years there was a-lot of fixing up it was in bad shape. Air B and B is so much better.
Yeah but pricing it high is
Also not get anyone wanting it.
@@tracywatts1459 completely agree. My place gets professionally cleaned at least 2x per week and there’s just normal wear and tear. There’s been times when my family is in the area and I don’t pay to have it cleaned and I come in and can barely tell anyone was there. I also like that you get the $ before they ever step foot in the door so you aren’t paying legal fees and evictions. The arrangement has worked out well and we definitely make enough from it to justify keeping it in our portfolio.
I totally agree, that has also been my experience as a host.@@tracywatts1459
Ramsey exaggerated! Whenever I stay out of town I always leave the suite immaculate.
Dave is right about one thing. Short-term rentals are a lot of work. I have been doing it since 2017 and currently own four properties. I've decided that I'll have to retire from teaching if I buy another one. It takes a lot more time than you would think.
As for renters destroying your place, my experience is nothing like what Dave describes. The only damage that a guest has done in one of my places for the past five years is when a dog chewed a hole in a rug. The guest told me about it and even offered to pay to replace it. I haven't had one other instance of damage. Not even a broken plate.
I have developed a system for managing my property. My rentals are in vacation destinations and are anywhere from 2-4.5 hours from my home. I have family that helps maintain and clean some homes and it hasn't been a problem. It actually works better for me than when I hire professional management companies.
Short-term rentals in the right location will make tons of money. I choose locations that will pay for themselves in four or five years. I also don't borrow more than I can afford to pay back if the house doesn't rent.
Exactly! Location and expectations are key.
In about a year and a half we also haven't had damages like Dave describes.
We hired a management company. The resort town where we bought our condo has at least a dozen if not more to choose from. We interviewed several and chose one when the owner met with us and we could tell we were on the same page. He does everything and takes 30%.In all honesty, it seems he should get way more since we're two states away and he's taking care of everything! So far, our condo has not been breaking even but we're newish owners and with more reviews we expect to have greater occupancy. We're so glad we did this!
I've just done a quick read of AirBnb. Whilst I've heard of it I knew little about it. Appreciate your thoughts about it. I'm overseas and rent my property out long term. I don't think I want to give my elderly father the hassle of managing one. Sure there is money to be made but there are hassles that come with it. If you don't mind it good for you.
@@injanhoi1 I am a big Airbnb fan, but I would agree with you that your elderly father is probably not going to enjoy trying to manage one. Besides the required housekeeping and maintenance, you also have to be on call all of the time. All landlords are on call - but just for their tenants. If you run an Airbnb you also have to answer the phone for all of your prospective clients, who will have questions about the neighborhood, things to do, and on and on. It's not for everyone.
Solid plan overall
Perfectly said.
I live in Northern California, expensive area, trying to invest in the south part of bay area with the program Housekeys, if you know something about that or any advice will be appreciate it, thank you.
Housing costs will come down eventually, but for now; get your money (as much as you can) out of the housing market and get into the financial markets or gold. The new mortgage rates are crazy, add to that the recession and the fact that mortgage guidelines are getting more difficult. Home prices will need to fall by a minimum of 40% (more like 50%) before the market normalizes.If you are in cross roads or need sincere advise on the best moves to take now its best you find an independent advisor who knows about the financial markets.
This is exactly why I like having an asset manager look over my day-to-day market decisions: with their extensive knowledge of going long and short at the same time, using risk for its asymmetrical upside and laying it off as a hedge against the inevitable downward turns, their skillset makes it nearly impossible for them to underperform. I've been utilizing a manager for more than two years, and I've made over 85% of my initial deposit
I hope you don't mind if I ask you to recommend this particular coach you using their service.
’Sonya Lee Mitchell, is respected in her field. I suggest delving deeper into her credentials, as she possesses experience and serves as a valuable asset.
She looks to be well-educated and well-read. I ran an online search on her name and came across her website; thank you for sharing.
I have owned long term and short term rentals for years. I found the short term rentals were a lot easier to manage. On occasions, I had the short term renters leave me gifts! I find people on vacation are in a good mood and 99% of the time left my properties in great shape.
Thank you for helping destroy the housing market.
@@davidd.8256 I owned these rental properties years ago. I have been retired for a while. I took foreclosures or fixer uppers that nobody wanted that brought down neighbor’s property values and fixed them up for rentals. This was way before the current housing market. I believe improving these properties helped the local real estate market and made the neighbors very happy. 😃
@@davidd.8256you must be one of them woke people
@@davidd.8256🤣🤣🤣
I can tell right away Dave has never even used Airbnb
He has no clue. But he's sure confident spewing "advice," isn't he?
I own a cleaning company and several Aibnbs. It's the best thing I've ever done to be honest.
He is TOO full of Fear Uncertainty And Doubt
If your cash flow numbers only work under a best case scenario, your numbers don’t work.
^^^
Yah... that is what my dad said to me 20 years ago.... he was wrong.
@@johnSmith-uz8nl He was wrong or you were lucky?
@@InternetUser._ Being too skeptical stops you from doing something. I like to put down 30%... there is something called being a fool... no money down and barely making it. My dad never invested, perhaps that is why I have.
@@johnSmith-uz8nl Sounds like we’re in agreement then. One should build wiggle room into their investments, such as putting 30% down.
Owning an Airbnb has been one of the best investments I have ever made. I think it all depends on the individual properties themselves.
Yes because the people are in and out.
And ... living next to an Airbnb has been the worst nightmare of my life. Please make your money without ruining once quiet residential area.
@@johnwright6102 There have always been noise ordinances in every town and city across America, long before Airbnb came along. It's generally something like between 10pm and 7am and applies to construction contractors and such, as well. If they are in violation of the town noise ordinance, why didn't you simply report them? It's no different than fireworks at 2am.
Thank you for helping destroy the housing market.
I love advice from someone who has no experience on said thing they are advising on. I wonder what other industries he has no experience in that he will teach us about next.
Every job in the world is a "hassle," too ... except for Dave's, apparently. He should have joined the Army in his 20's and really learned what the word "hassle" means in a job.
Dave was literally a real estate agent before he started his company and he is a landlord 😳
Fortunately, I don't have any of these issues, and I actually have enjoyed being a host these past 2yrs. I live in Atlanta Ga and my Airbnb stay booked every week. It has not been a hassle, I manage with a full time job, and I clean it every Tuesday which I purposely block off Tuesdays just for cleaning. I have had a couple, like literally a couple of issues, and the guests paid out with no problems. I am a super host and I do own my home. I do look at it as a one day a week PT job but I enjoy it. I never have to promote because Airbnb and my super host status do that for me. I am greatful and thankful. This is the best investment I have ever done. The only big issue I have is with the long term guests, so I cut long term stays down, and have no problems with weekly guests. Thank God!
Superhost here too! Four years in in Charlotte, NC. Extended stays for travel nurses and folks relocating or coming for work. Four properties all owned outright, I owe $197k on my $450k house. On AirBNB since 2017. Life is good.
@@imnitguy Life is Good!!! Cheers 🍻
Very rare but if we do have a long term guest we make it that they have to have the property cleaned by us once a week or every other week (that way we are better able to keep an eye on the place)!
@@lauraclark4542 that's exactly what I honestly do. A midstay cleaning.
likewise !! Superhost here, my thought is , whats the problem in cleaning your property either yourself or by paying someone else ? Especially when you are making substantial amount that eventually goes towards other expenses like either maintenance of the property or even contributions towards the mortgage ? Is that not one of the ways towards financial freedom eventually ?
I own both a long term rental with year leases and short term rental I list on Airbnb. I enjoy both. The long term rental is more passive income, but the Airbnb has been a great experience. Our guests have been respectful of our property, it gives my family a free place to vacation a couple times a year and I have loved hosting people and getting to know our guests. It hasn’t taken up too much of my time. Currently looking for another property to purchase and I am open to either another long term or short term set up.
💡Thanks for sharing Laura! Maybe I should make a video on this 🤔
No you don't stop lying lol
Agreed! 6+ years in, and our experience has been similar. Prior experience in motel operation, so that's been helpful. We've had great guests, and it's been a joy and privilegeto meet them. I do all cleaning and maintenance.
@@gregjohnston3504do you feel your airbnb income is dropping? There has been overflow of Airbnbs since covid which I have heard has taken a toll on bnb income?
Well said. I am in my mid 30s, and I am yet to begin my retirement plan. I have read through many comments and articles on retirement, but I still do not know where best to begin and how to go about it. I asked a friend of mine but couldn't give me the explanation I was expecting. So please I will like to have a good idea on where and how to begin. If possible a good recommendation.
It is a very good thing for you to want to begin your retirement, now you need to know where to invest your Roth IRA. Get the services of a professional to guide you.
I will advise you give *Christy Vallen D'Souza* a trial, I use her services and she is the best. Just try her services and thank me later.
The Blacktina has a $1,000 weave and a $50 water bottle praise the lord.
Max out your Roth annually and your 401k annually. If you can put your 401k in a roth, do that. Don't over complicate this. Go to fidelity, open your Roth, and dollar cost average into the S&P500 until you get to the annual max
A friend of mine said, "just don't spend money on things you want but don't need".😅
I’ve owned several rental properties over the years and this is what I tell people who say they want to start investing in real estate. Writing down on paper how things should work out always looks great but then once you actually are doing it you have to add in dealing with humans and that’s when your plan can go bad quickly. It’s amazing how some humans can have total disregard for your property. I’ve done very well overall with real estate but it’s not always a bowl of cherries.
Use a management company lol you can get Airbnb management for cheap
@@double_joseph327 it’s not cheap it’s at least 20% and people do treat it as a camping ground
Yep- Carlton Sheets never brought this up lol
@@user-lv6kz6pc8s try 10% which is peanuts for peace of mind and the opportunity to make more then Long term tenants
Only rent to Asians
I'm a handyman (45 years in the field) in Santa Cruz CA . . . Many of my clients have Air BnBs . . . the successful ones use a real estate firm that specializes in managing Air BnBs . . . the bottom line is that they still make a boatload of money and the professional manager deals with all the problems. For those clients of mine that use such services, it is hands free and they just watch the deposits accrue in their bank accounts. I've had a few clients that did it on their own . . . lasted about one season and they were ready for the nut house . . .
I really hate that others treat hotel rooms, or AirBNB's so badly. I leave any place I stay better than I found it. I want the owner to want me back!
Exactly!
As a former hotel maid, I appreciate folks like you!
Same here
Ditto.
You betcha!
When you rent an Airbnb ask the neighbors how they feel about living next door to one. Airbnb's have made our lives a living a hell!
My neighbor turned his luxury lakefront home into a short-term vacation rental. His guests have trespassed on my property, tied up to my dock, and left beer/soda cans on my property.
@@KathleenMcNe Call the police with pics .Scuse me but it's *YOUR* property . Cmon now !// And call those neighbours!!!
There is a great deal of trust and respect built into the AirBNB model. I’ve never had a guest ruin a rental and even if the guest causes damage, AirBNB’s aircover will compensate for the cost of repairs. I do long term stays which cuts out lots of cleaning work. But it doesn’t really bother me that y’all listen to Dave on this, less competition 😉
He seems to be a little off the mark on this.
AirBnb has secondary insurance, so your insurance needs to pay first typically
Exactly!
Yea, lots of people think that until they have a claim.
I own four AirBNBs and quit a $100k IT job to do this full time at 50. We are in a great area where people are relocating and I have had far less damage on the platform than with annual lease agreements. We have never had anyone throw a party because we have a 30 day minimum. I think Ramsey is a little off here.
Airbnb is not so bad, but yes it's a headache at times. $100 bucks says the dude tries airbnb ignoring Ramsey 😂
You know it 😂😂
He will learn the hard way for sure!
I’ll bet 1,000
I’ll bet 10k😂
you're on
Every single industry has the hassle factor. smh
Exactly, getting up at 430am and trekking to an office for 10 hours sitting next to a lot of people is a major hassle, 5 times a week
I had family members managing my vacation rental for me and it seriously damaged that relationship. I was taken advantage of and she saw me as an uncaring cousin and the poisoned to other family members. DON'T DO IT.
I would never ask or hire family members for anything... sorry that you went through
that.
Hopefully you paid your family members for their work. I would never ask a family member to clean my Air b n b .. only if I was in a big trouble with something. I have one and hired a cleaning service company , bought a maintaince plan on my AC/HVAC system and have a plumber lined up in case I have problems.
I can understand why family members would be a little pissed off about managing a vacation rental. Managing a vacation rental isn’t a ‘set and forget’ investment. You need to be there when they arrive to hand off keys (and no one ever turns up on time), and you need to clean when they are gone. You also need to be within distance while tenants are there in case of emergencies- so going away is out of the question. And most owners feel that all it take is 10 minutes before and half an hour after. It doesn’t!
Some insurance companies won't cover your home if it's an airbnb
For the same reason they won't cover your car if you're using it as a rideshare. You enter a whole new realm of liability when youre using your personal assets as a commercial venture.
you need to have a STR policy/rider. Some carriers just don't offer this product.
Insurance companies are National organizations- go with another company that does.
I have been hosting on Airbnb for 13 years. I have never had a bad experience with any guest. They have also been the most pristine and respectful people I have in my home. I have never had crazy parties or wrecklessness or damage. I recommend it over having regular rental tenants for many reasons. Regular renters are much more of a hassle. Yes I do my own cleaning and it is also my own personal home, not a separate investment . I am a very hands-on host. I have been grateful for the much needed extra income. However, I don't like how big time investors are scooping up a portion of the housing inventory, being remote owners, making it extra expensive to pay out for maintenance and also artificially driving up the nightly rates not to mention artificially driving up the price of residential property meant to be used by people who need to place to actually live in.
Airbnb was very good experience for me. No hassle. No damage, nice people
Fourth big problem with Airbnb-type operations: I’m an accountant who works with owners of short term rentals, and the tax situation drives them crazy. You’re competing with hotels, so you are responsible for the same taxes they are. Monthly lodging and sales taxes, annual personal property taxes on the furnishings, business licenses , etc. The lodging and sales taxes are fiduciary taxes (like payroll taxes) and both the city and state will chase you to the grave for them. They can pierce the corporate veil to collect them, and you can’t bankrupt your way out of them. There are at least 20 different rental platforms; some collect and remit the taxes for you, but others don’t. If they make an error, YOU are on the hook for them.
Most owners really don’t make that much, and many regret they ever started.
I’ve run an Airbnb for three years it’s basically income that’s it very easy and then I deduct repairs . It takes my account five minutes
Yep, one really needs to do their due diligence before getting in the short-term rental business.
What area are you in that requires a business license for airbnb? Its treated same as a regular landlord in NJ. Some towns require a permit fee but only Atlantic city and Newark and few other towns.
@@houptee in Virginia, “short term” is defined as 30 days or less for purposes of local lodging taxes. For state sales tax, it is 90 days or less.
😊😊My state, Arkansas requires a high sales tax rate on any short term rental less than 30 days. But I believe the Air B&B may take care of that for the homeowner.
We have an Airbnb literally in our backyard, a garage apartment that we remodeled.
It works greats, and the hassle factor is very low, but only because we live on the property.
And yes..ONLY because you LIVE on the property. You are an anomaly....and NOT the rule....
You have a small apartment and it's in your backyard. Try having a 4 bedroom 1800 Sq Ft house that's 2 hours away from you!! Its a lot more work and money
He is 💯 wrong. He have an Airbnb and is great
@@MikeColburn Yes captain obvious
@@norbertbajgyik1607Thank you, I need encouragement.
Systems can be built to take the hassle out of it. But I love Dave and he’s right about having the AirBnB in your backyard is probably a good idea.
This is so true! The stress is always going to be there and never goes away
I like this co-host. She complements the advice Dave gives and doesn't compete. She also seems to have quite a bit of experience and knowledge and communicates well.
🔥 I’m with you on this Barb! This was a great video!
P.S. If you have any other questions about starting & growing your Airbnb business lmk.
Some other considerations:
1. If you live in a house two of the past five years, you can claim exemption on the taxes on the capital gains when you sell the house. Using the home as an AirBnB would jeopardize that tax break.
2. Liability. Most homeowners policies have exclusions for "business use" of the property. If someone got hurt and could prove negligence, such as a deck railing not up to code, then you are placing yourself at a lot of risk. Even if you were not negligent, you need to be diligent about getting the correct insurance coverage.
3. Liability part II. No way would I do an AirBnB without setting it up as an individual LLC.
4. It is very tough to convert a personal residence into a rental. There is often a lot of emotional ties to the property - especially if you have taken the time and effort to do renovations. I've known a couple of people who tried renting out their parents' house after they passed. It didn't turn out well for exactly those reasons - too many emotional ties.
We converted our residence to a rental, but were warned about the emotional ties to the property - I agree that you have to know what you're getting into and detach yourself from any renovations, upgrades, etc that you have performed on the property. For liability insurance, yes, make sure to specify that this is for a short-term rental and get NO LESS than $1 million of liability coverage. If your insurance company will not provide that much coverage, either pick a new company or get an "umbrella" policy to get coverage up to at least $1 million.
The IRS also has cracked down on people who lived in their home, converted it to a rental, then later on moved back in so they could claim the primary residence exemption. Now for a home you previously rented out, you have to prorate the time it was a primary residence, so you can only exclude that percentage of the gains.
Agree with all of that. I am baffled at how some people think that running an Airbnb is some kind of free money scheme that requires no work, financial planning, or liability considerations. I am sure there are people that dumb, but how do you cure dumb?
Some other considerations: When home prices go up, everyone in the neighborhood benefits when they sell. People in Airbnb's spend money in that neighborhood. Frat house level rent will attract frat house renters, whether it is an Airbnb or not. At least short term renters leave; and local ordinances should already be in place to deal with bad behavior. Most renters are good, kind, caring, decent people; and bumping into new people around the neighborhood is a great way to learn more about the rest of the world.
Great points.
💡Great idea Lee! Would you mind sharing more?
Having just sold two short term vacation condos, I can attest to the work involved! I do take exception to the wear and tear issue. I found most guests to be respectful of my property and in some cases, I couldn't hardly tell that a guest had been in the condo! Messy guest were not in the condo for a long enough period of time that it made much difference in turnover.
The best part of short term rentals is that you don't EVER chase the money....You are paid in full 30 days prior to guest arrival. No deadbeats like you can get in long term rentals.
Oh yeah, the Income is much more lucrative with short term rentals over long term....in my case 3-4 times the annual income that I would have received if leased long term.
Hello what location would you advice i look into
I live next to an airbnb and it's a living hell for the full time residence.🤬
We always had high-end rentals. Never a problem with renters. They usually left us gifts. And use a local cleaning service. It worked great even for our rentals that were out of state. We had 2 of them.
Only have had high end rentals as well as form long term rentals and haven’t had any issues in the 12 years I’ve been renting.
We had an Airbnb we were robbed by the renter a single lady booked the house then invited her boyfriend and his friends over they were ones who robbed. Come to find out thru the police report this lady doing the same thing with other airbnb in our area. It was a huge hassle dealing with insurance and replacing and fixing and replacing broken items then all the time plus lost of future income having to cancel next bookings. So that nightmare we no longer will do short term rentals again.
Airbnb is not real estate investing... it's entering the hospitality space PERIOD!!! Proceed with CAUTION!!!
This is a GREAT discussion on the items that never get talked about
I am an Airbnb owner. The people that stay are far less likely to do much damage -They are easier on the house than my former longer term renters. It stays in better condition. Choose a platform like air bnb or vacasa - they help minimize the work.
Completely agree... people treat it like a hotel so they aren't doing cartwheels into drywall.
Some people are just totally against people making money on short term rentals. If he is getting his family to do it, why would you assume he isn't paying them?
I rented a AirBnB on the beach in Florida. Never again. Airbnb never backed me when renters break things. Ton of work, little profit was my experience. The word hassle doesn’t even begin to tell the story.
Dave's issues are not accurate. 1. These days there are TONS of automations available, but if you don't like that hire a professional to manage your property for 15-20% of nightly rate, make 15-20% more with a great manager and be free of the "hassle factor." 2. Airbnb guests have RARELY ever damaged any of the 18 properties I have managed for the last 10 years. Sheets and towels are the things that get damaged. That's a cheap cost of doing business thing. 3. We've had multiple zoning changes in Nashville. ALL of them involve grandfathering existing permit holders to be regulated by whatever law they were first permitted under, BUT even if you lose the ability to short-term rent, mid-term furnished rentals (31-180 days) are not considered short-term rentals, can still legally be advertised on Airbnb, AND are more profitable than long-term. I talk people through these types of solutions every day.
I don't want any strangers in my house EVER!! Your home is your sanctuary. Too many horror stories I've heard.
Dave is right on the Airbnb mostly. Although Airbnb has a great reporting system of checks and balances so damages are minimal. It is not passive income so being off premise will be a problem. Sell it. And do it in Oklahoma...buy near a hospital rent to nurses.
100% about renting near hopitals. Some hospital staff are either travelers or students. And they hate staying at hotels and some lease apartments for 3-6 months
Hospitals or Air Force Bases. And get the name of any enlisted's "First Shirt" as them effing up your property is a problem with their leadership.
That’s a great suggestion
That was a great response. Owning an Airbnb and long-term rentals in my experience, you're absolutely correct.
If you’re talking about renting to travel nurses, beware. Travel nurse rates have been dropping and people are slowly leaving travel nursing so if you’re banking on travel nurses it may not be viable in the long run as many hospitals are trying to move away from using travel nurses
If u can not manage your own real estate... do not become a landlord.
Been thinking about it. Thank you for helping me decide.
Very good points. A lot of people don’t even realize the headaches and costs of rental property, much less the additional things this brings.
A lot of people don't realize a lot of things. Tell me when you find a cure for stupidity.
🔥 I’m with you on this Mike! This was a great video!
P.S. If you have any other questions about starting & growing your Airbnb business lmk.
One thing I do like about Airbnb is they have Air cover so if a guest damages or trashes your home it covers it if you file your case on time and show proof, unlike long term rentals were your pretty much on your own
I own a Airbnb and it is a lot of work. I couldn’t imagine living in a different state. And people will complain about anything. Dave isn’t that far off here.
I have had an AirBNB for 5 years. It has been wonderful. Profitable and minor damages. Plus AirBNB has the 3 million host guarantee for damages. It's easy money and an amazing service. It's also been a ministry for me.
Dave is 100% on the money with every point. I’m selling my Airbnb. Actually going under contract today. Do not do Airbnb.
Why are you selling?
I run a successful Airbnb for three years in a college town it’s been an absolute dream. You must not be doing it right. Sure it takes work but it can be highly profitable.
@@miketrav I was doing it right, then the laws changed on me.
@@Oneluck13 They made it illegal in your town?
Did you know you can defer capital gains with a1031 exchange? Happy to answer any questions
I live next to two houses in the ABB program. They are party houses 24/7. We have the police there at least three or four times a month. The homes are absolutely trashed.
And if they were not ABB, the owners would have even less money, and who would be staying there then? At least short term renters leave. Your problem is not ABB, it is your neighborhood.
I had an airbnb for a short while. I quit because it is a lot of work and you get some real wack a doodles.
I think, It depends on the area, and property also. You are definitely correct.
The U.S. is full of wack-a-doodles now, on every street, corner, and in every neighborhood. It was intentionally done to you.
Been using Airbnb when I travel since 2015. Love Airbnb. Way better than hotels. Then again, might be different as a host.
Of course, It is different as a host lol. You own the property, and liable for maintenance, property, and safety.
Agreed about airbnb. It is not so passive. You hire cleaning and still have to check behind them to keep your stars up. Most guests don't really care...buy if you have time monitor then it is not a bad idea...
And a VRBO ad pops up... gotta love it...
He does this often!!❤
The great thing about running an airbnb is that it teaches you a lot of business skills: logistics, customer services, marketing, accounting, product development, home repair,... etc.
But, yeah, it's a lot of work.
I know a number of people with Air BnBs that I work on their financials...almost none of them truly make much money on them. Expenses and time demands are way higher than a standard rental property.
Then they are clearly pricing their AirBnBs too low
There’s a middle ground having a property manager, but you will receive less money and some PMs charges up to 30%, which makes the business unviable. I use a national company “Evolve”, they are good and only charge 10% and includes an insurance for any damage above 50 dollars, very easy to process, but they only do the remote part, so you will still need a local PM or a good cleaner willing to do dispatch’s and couple honest handyman’s on call. The real problem to me is as Dave said, they will treat the house bad in some cases and you will need to be okay to handle that and the Airbnb guests have too much power. People do not understand how much damage a bad review does for things that are not your fault or it is even theirs when they go against the rules of the house and they incorrectly use the reviews for venting. You can have a very good business, but it can be destroy with one or two guests bad reviews. Also you have much higher costs and seasonality. If you want to do it, best you do it in your own backyard but review well the market and ensure will be a good business that justify all the headaches that cones with it.
If he's going to keep the rental, I definitely recommend a management company. Unless you can be onsite to take care of things, you need someone (not your family!) to manage it for you. Also, unless this is a touristy area, he might be better doing a long term rental, where the tenant signs a 1 year lease, and again I'd recommend having a company do the management.
💯
So many people have told me that dependable management companies are rare as hen's teeth.
Dave is right since hiring a management company defeats the whole purpose.
We had a management company and it was poorly managed. We were three hours away and when we went to check on the place in the spring, the place looked horrific. It was our vacation cottage and we rented it out to supplement our costs. We ended up stopping, it was not worth it to have our place trashed. There are some good renters out there but a majority of people do not care since it is not their place. Sad but true.
Mngmt companies whipe away your profit.
Another problem with hosting/owning AirBNBs is when your guests don't leave. It's happened to me multiple times. How am I suppose to get the property ready for the next guests? AirBNB doesn't help hosts with this either. Big headache.
If they don’t leave can’t you charge them again since their Card is on file 🤷🏾♂️I understand your situation that they have to leave on time then you get someone clean so it could be ready for the next Guest and it won’t mess up the Schedule they set to rent for a few Days and so you won’t get bad reviews but Im just wondering if People are staying knowing they’re getting charged or is it that you can’t charge them since 2 or 3 Days is over on the Set Schedule for them 🤔
And if an Airbnb is illegal because it goes against zoning laws then that owner should not receive help from the government because they are the ones that took the risk.
I disagree. Once the Airbnb is setup NICELY, you have a good cleaning company and a couple of handy men, it’s pretty much cruise control. I really emphasize on setting up very nicely. In my experience, People tend to take much better care when things are really nice. I opened up my first Airbnb in a decent location in Tampa and I currently live overseas! My cleaning company are my eyes on site. My best performing property so far and it has been really easy to live with.
💡Thanks for sharing Javier! Maybe I should make a video on this 🤔
One bad rent will change your mind when the place gets trashed.
problem is 99% of the people out there don't know how to do this nor do they know the market or how to navigate the landscape. My wife is a successful real estate agent with over 10 years of experience and ~25 transactions a year. She manages our airbnb and rental properties. Her industry experience has been crucial.
@@bostonredsox482doesn’t the owner of the airbnb just sue the renter?
Real estate is never "cruise control"
My buddy bought a cottage in st Augustine to Airbnb it out. Dave is right about a lot of the issues. And the rules that the city put out there has hurt his ability to short term rent.
I love my Airbnb. I'm making almost 3x the amount I would if I rented it long term. Sure there's always gong to be worry with the city shutting you down, but make sure you're in an area that they allow it 🤷🏻♂️
💡Great Experience Russel! Would you mind sharing more?
@@ivantejeda what else would you like to know?
I’ve only used Airbnb a couple of times. The first time I used it a few years ago I was able to rent an apartment downtown in KC that was decently less than a hotel would have been (maybe $15-20 a knight) and we had an apartment to ourselves which was nice. I’ve also used one with a group of friends where renting a house is a cool option. But recently I went to use it again and the prices were much higher than hotels in the areas I was browsing so it kinda took me out of using the service. If the cost of an apartment let’s say consistently is more than a hotel it’s unlikely I’ll ever use the service outside of traveling with a big group. But it also doesn’t really surprise me - kinda feels like the path of Uber which was much cheaper than taxis at the start but as it became widely adopted now costs the same or more.
Airbnb is not 25X the hassle, compared to the normal rental; it's more like 100X or 300X.
It sounds awful--nightmarish. Ugh, ick.
So why are you doing it then? Oh, you are not are you? Just sayin' stuff because it makes you feel good.
@@ronsromperroom1572 I have had long-term rentals for more than 35 years; my sibling has multiple airbnbs. I know what's involved in both, especially with bad tenants and daily cleanup. Way too much work. I only have to do that about once every five years; airbnb owners do it every time it turns over. That's why it's 100X or even 300X or even more.
Funny how it's only women on here whining about the amount of work involved - just something I noticed@elizabethblane201
@@TomHardyHardly Who cleans your rentals, Tom?
It’s a hassle in any business, only follow Dave for debt reduction everything else is bonkers- road to an average life smh
Some more than others
Dave was literally a realtor until he started this business and he owns multiple properties so he knows what he’s talking about.
Zoning is a big issue and Dave is right about the potential impact. Many municipalities, as well as condos and HOA’s, already have zoning laws or covenants prohibiting short term rentals. As AirBNB’s have become more common, those with existing rules have moved to aggressively enforce them and those without, are drafting the necessary zoning restrictions to prohibit short term residential rentals. If you buy a vacation property thinking you can AirBNB it when not using it to help defray the cost of ownership, better think again.
I will vote against any little fiefdom tyrant who wants to impose the scam called "zoning" on a free American property owner.
As they should. Most neighborhoods don’t want to have strangers coming in and out of properties all year long. My neighbor decided they wanted to travel and rented out their house on air b n b. They later sold it to an investor who didn’t even live on the property. That person didn’t care who they rented to and eventually it had turned into a party house. I also know of other air b n bs in the area that have become a place where thieves could scope out the neighborhood and sell their fenced goods and eventually a place where pimps and prostitutes would conduct their business with Johns. We have been to the police many times and reported the owners and nothing is being done about it. It appears when people decide to invest in air b n b that no one is considering the long term consequences to the neighborhood or to the impact it has on the people in that community. That home could be going to a paying tenant or an owner who actually lives there and contributes to the community. Now its just a cash grab. At some point, something is going to happen where governments and also air b n b itself is going to be a lot more strict about air b n b. I get people want a second source of income and while there’s nothing inherently wrong with that, you have to look at the bigger picture.
@@lucythepug3116 You don't own other people's property. They have property rights. Keep your eyes on your own property. It has nothing to do with the scam called "zoning." If they are a "party house," there are already ordinances against noise late at night. Drugs are already illegal. Enforce THOSE. Instead, you turn to busybodiness and other peoples' business.
Air BnB only makes sense in touristy areas. Other than that you’re probably not going to get enough renters to make sense of it.
Where I am it entirely makes sense tourist regular come here and there's essential an entire hotel and tourist business around it.
Yea only makes sense downtown or on a lake as a lake house or something
BS. I'm not on a tourist area. Airbnb cooks here. College town.
Not true . Military town!! Extremely profitable.
Not necessarily I know a few people who do air bnb in a small city. They do well especially with traveling nurses. They get a lot of long term air bnb residents
Wow, I'm researching this. I appreciate the info. My dad wants to do and Airbnb. He's retired and we have learning the process. Great info.
How’s the process going?
Airbnb's in the small town we are moving to have driven home prices through the roof. Median household Income is $40k Median home price is $750k.
Airbnb's make $40k-80k a season there.
Instead of doing Airbnb's I'm going to get back to my construction roots and build houses. $250k in land and materials and lots of sweat will bring in $500k profit.
See how it goes this year. Looking at property now.
One advantage of short term rentals: there is a significantly lower probability of running into no-pay deadbeat renters like you have with long term. Short term renters are there for a vacation, and they pay all costs up-front. With a long term rental property, you depend on the renter to write you a check every month. If the renter fails to pay, you have to go through a legal process to get that tenant evicted, and that can take months during which you're losing money .
All that aside, in this situation, I agree with Dave. This is a bad idea. If you're going to have a rental property, it should be close enough to you that you can manage it. And you should never expect family or friends to do that for you.
💡Thanks for sharing J M! Maybe I should make a video on this 🤔
Just do year lease rentals. I do and barely have to manage it. I do a good screening process (minimum requirements and never deviate) and do an inspection 2x a year (I explain that I'm checked for any repairs after the spring storms or winter months). Never had to evict anyone after 14 years.
How much profit do you make / yr?
“I have a pastor who bought lots of properties but never misused his donations”
Yeaaaaahhh suuuure 😏
Thank you! Thank you! Thank you! I've been saying this to my wife for ages.
My facts; My airbnb's have WAAY LESS damage and maintenance to them then my long term rentals do... Because we are in the house constantly, its ALWAYS staged and in "show room condition", we catch problems very early and fix them... The airbnb's stay in WAY BETTER shape then the long unfurnished rentals.... Just my facts , For ME....
💡Thanks for sharing @TheRusschannel! Maybe I should make a video on this 🤔
I’ve owned an Airbnb for five years. Never has anybody torn-it up. I make about $1000 a day. It’s a 6000 square-foot house that I live in during the week. We have for Housekeeper‘s they come the day everybody leaves and then they come the Friday before they check in. It’s absolutely the easiest job on the planet . I do check my guest and I believe in doing that they put a face to the house I wouldn’t want it remotely. That being said I disagree with everything else he spoke of. Five years zero problems🤷♀️
You move out of home every Friday and move back in on Monday?
Where do you live on the weekends?
don't buls..t
Dave isn’t that smart. A AirBNB is better than having a tenant for a year because you get paid up front.
I used to own a long term rental property, my last tenant trash up my property so bad that I decided to just get rid of it and left the rental market for good.....
The 4th problem with airB&B, at least here in Australia, is we have a huge shortage of rental accommodation as owners are listing their properties on short term rentals.
Ive done airbnb and can confirm all the cons Dave mentioned. It is a lot of work.
Yeah, work sucks. You should not have to do that. People should just give you money.
@@ronsromperroom1572 you can literally pay a management company 10% and they will make you more money then you can do it yourself lol
🔥 I’m with you on this Nay! This was a great video!
P.S. If you have any other questions about starting & growing your Airbnb business lmk.
@@ronsromperroom1572 Dude, she not complaining, just pointing out that is is more work than people think. Your comment smells like jealousy.
My area is BLOWING up (tourist attraction)! Everyone is doing Air BnBs, so much so that people don’t have anywhere to rent. It’s nuts. If you find a rental the cost is the same or more than a mortgage!!!!!
But without ABB you think rent would be cheap? The neighborhood is doing great, so prices are going up. That has nothing to do with ABB.
@@pieintheskyarenal my point is there are less places to actually rent from because everyone is doing short term rentals.
I love the switch from headphones to mic's and IEM's!
It also helps to keep Dave hairs from getting messed up
Some of this Airbnb are not being cleaned and they charging a cleaning fee. Some have roach and rats in Maryland we found that people are not cleaning them.
I disagree with Dave on this one. I have several rental properties and one multifamily that I do short-term rentals with. If you put the right systems and strategies in place, you can take the hassle out of it. From my experience, everyone has a different outlook on rentals but "to each his own."
💡Great idea Morris! Would you mind sharing more?
@@ivantejeda sure
@@BeyondTheClippersyes please do share more
My biggest issue is that they’ve turned available housing into a short term rental. In many areas, this drives a neighborhood’s inventory down and rental prices way up. The original idea of renting out a spare room has become unregulated hotels.
I agree. Prices are ridiculous now
My house, my money, my plan. Why should other people tell me what I can and can't do with my property? Honesty question.
It's very likely that the municipality will change the zoning laws and not allow Airbnb or short term rentals in residential areas. Because that, too, is happening a lot.
I can relate to this but the small guy just trying to make a little extra income isn't the issue. It's the big corporate companies that are taking over multiple units.
@@imnitguy like Cat B said, in many neighborhoods and cites, it’s larger entities turning swaths of available housing into Air B n B rentals. Yes, your money, your property, etc. Doesn’t mean it’s good for anyone other than you. A comparable situation is how the Chinese are buying up so much of the housing on the west coast and doing literally nothing with it. Regulations allow for it, so they’re doing nothing illegal. Only thing it does in the end, though, is artificially drive up housing prices for everyone else. But to your point, their house, their money, their plan. It’s unsustainable for everyone who didn’t get in on it though.
Airbnb is over-done. The money is not that great. You have to have multiple properties to really scale it. I have one property that I rent out out of state and make about $1000 a month on but I have to spend $300 a month cleaning and maintaining the place. When you consider the fact that I have to pay property taxes the $700 a month net profit is not really worth it. I’m going to sell the property next year. I think it makes a lot more sense to get long-term rental in your backyard like Dave is saying
I think you’re talking about VRBO Dave. in my four years as an Airbnb Superhost, we’ve done extremely well with no damages, only normal maintenance just as we incur in our own home. We did have two VRBO guests that were horrible enough to end our very short stint with the platform, however the AirBnB platform has been a lifesaver to our farm. Now, we’re selling it all to fund our next venture with a significant profit to boot. Good day
Air BnB are an evil company in so many ways
Wow, you guys are awesome. Great way to discourage an entrepreneur. Thank you.
I only rented an AirBnB once, spent 2k for a weekend at a beach front house. We had to clean the house and clean dishes before we left. Never again
I stayed at one once in a small town. The maid came by while we were there ( there was a mix up, on our departure day). I asked her about the outdoor cameras, and she told me that one time, a couple booked the place ( septic is set up for 6 or less people). She said they threw a big party in the back yard, and the neighbors called the cops. They found out that the people pulled ALL the furniture out of the house and into the yard, to have a big wedding, then drank the night away with a ton of people, and left all the furniture and beer bottles/trash all over the yard! Messed stuff up, and the septic had to be pumped too! We left the place spotless!!
We've run an AirBnB for 20 years with very little damage inflicted by guests! One or two extreme cases come to mind. Serious repairs - No. Also I enjoy cleaning and preparing the cottage for the next term. It gives us real pleasure to read our comment book to know how many people in their busy, hustle and bustle lifestyles had a few days of peace and tranquility on our island. Sadly, the odd bods who run the government in our part of the world (BC, Canada) have decreed a shutdown this year. PS we run a tourist model railway show, click the logo on the left.
The model railway show sounds cool and so does your positive attitude. I'm sat here reading this at 1.30am in the UK and I have to go upstairs now and finish cleaning the apartment for our Airbnb guest that arrives tomorrow.
Hearing this pastor talking, there is no doubt about his heart. I wouldn't think he will take advantage of his family. Bad comment coming from Mr Ramsey to this pastor.
Hey N G 👋 I’m thinking about making a video on this. Let me know if that’d be helpful.
P.S. If you have any questions about starting & growing your Airbnb business lmk.
I like all the advice here about the Airbnb, it has helped me choose not to go that option. But if you have family in Texas still and you plan on visiting them, you can write off the trips to visit your rental and also visit your family as well. So if you’re already going to be traveling there, it may be a benefit to have a straight rental
💡Thanks for sharing Alissa! Maybe I should make a video on this 🤔
As a real estate investor I agree Airbnb is very tough in most cases but the suggestion to just sell the house is bad. If he is locked in a low rate don't sell it put a long term renter in
I disagree too. We have a friend who owns Air B&B and a second home. He sets it up very nice and caters to the an entire family like teens, college, family reunion, etc...and pays family as a business to clean. He also lives down the road and will also bring supplies to the AB&B If needed...like propane when out in winter, so he absolutely loves it. It's professional and nice. He enjoys it, loves it.
Air B & B's in my town have been taken over by out of state investors. Our community JUST banned Air B & B's in residential neighborhoods in our town. They can only function in commercially zoned areas now. This is a HUGE change for out tourist community. Our residential community is facing a loss of homes that are available for purchase for families and the demand is high here. Air B & B's take single family home away from families who really need them. This is a small to medium size mid-western town.
That’s great to hear.
excellent to hear
They tried that in Wilmington, NC and if failed so disasterously that Charlotte, NC decided not to enact the same draconian laws for fear of having their pants sued off of them. Unless you live in a neighborhood with an HOA good luck telling property owners what they can and can't do with their properties without a legal battle.
"Zoning" is a scam to benefit the local tyrants in city government and their buddies. THEIR property will always get a "variance" and permission when THEY want to develop something. It is only YOURS that will be "prohibited." Property rights. You either HAVE them or you DON'T.
Airbnbs are hitting a bubble they're becoming oversaturated and having many problems
Great information. 👍👍
I am a Airbnb host! Love it NEVER had any issues
Every business requires hassle. Guests are paying for damages, there might be an individual who require more attention/messaging, but most of guests are easy going. I’m in this industry for 12 years, so I know what it takes from cleaning to check-ins/check-outs etc.
Airbnb is a good way to make money, and there are severals way to make your work easier. From start locks to property management sistems etc.
I hope the guy is doing Airbnb now 😂
5th problem, people are getting tired of AirBnB. I am seeing more and more of people just going to a hotel. It might be harder to get people to rent if the reputation of the company is going down.
Yup. If I'm staying two or three days, I go to a hotel. The ridiculous fees are making Airbnb a bad deal. The math only starts to make sense if you are staying a week or longer.
Hotels I always know what I’m getting. It’s safe, secure, free breakfast and CHEAPER
Wrong.. short term rentals are growing like crazy. People prefer having way more room and amenities vs. being stuck in a 12x12 hotel room.
So many Airbnb renters with issues. They show up and realize that the property is being rented illegally and they are out of town so it's not like they can just find a place overnight. They don't have the same protections that you get with a hotel. Sometimes you show up and things are not as advertised. It's going to become more of a mess.
Paying all cash for a house is crazy. The amazing advantage of using a little down payment is leverage.
Any pastor in real estate is disgusting.
Profiting of people’s need for shelter as a pastor is awful.
What’s wrong with a part time job that makes bank?? A lot of hassle…I thought Dave was for bootstrapping and getting after it and working hard? No one ever said that a short term rental was mailbox money that you don’t have to do anything for. All of a sudden because it’s an idea that he doesn’t want to do he whines and says it’s too hard and a lot of hassle and too much to deal with.