How To Successfully Invest In Short Term Rentals (Airbnb + VRBO)

Here are the steps you need to take to successfully invest in short term rentals!

Airbnb Investor Academy: https://financial-freedom-university2.teachable.com/p/airbnb-investor-academy

Access to my investment analysis spreadsheets and more!
https://stanwith.me/melefante6

AirDNA: https://lddy.no/tld7

Manage your properties with ease using YourPorter: https://yourporter.com/?r=michaelelefante

We made our first investment at age 26, at the end of 2019. We invested in a short term rental in Nashville, TN. At first we didn't know what we were doing, but we understood how to evaluate numbers and accurately forecast revenue. We learned very quickly how to make a property ultra successful. It's more than just finding a good deal. It's is important stand out online and create a unique experience.

You can be very successful, even as a beginner real estate investor! In fact, investing in short term rentals is the fastest path to achieving financial freedom (financial independence) and even allow you to quit your jobs and retire early. The reason being, is the cash flow potential is SO much higher than most other forms of investment.

We became financially free just 1 year after making our first investment. We quit our jobs 1.5 years later, with 4 Airbnb properties that produce around $20k/month in CASH FLOW - that's after all expenses and mortgages are paid.

So, how do you invest in short term vacation rentals, and do it successfully?

Steps:
1) Focus on Location… you don’t have to invest in your city or town. You can invest out of state, actually many investors do. You need to invest in a place that has decent to strong tourism numbers. After all, you need to supply a place for people on vacation to stay. Using online resources such as AirDNA can help you evaluate markets based on actual short term rental data. You can view occupancy rates and average daily rates in each given market.

2) Seasonality... I personally like to avoid super seasonal markets, meaning places that are heavy summer tourism but very slow the rest of the year, for example a northern lake or beach. If your numbers still make sense even with it being very seasonal, then go for it! The reason I like to avoid super seasonal places, is because I like steady cash flow every month.

3) Proximity to local attractions. Within each market, people are visiting for a particular reason. The closer you are to these attractions, typically you can charge more per night and will have a higher occupancy. This is not ALWAYS the case, but most markets it is. BUT the price or real estate will be more expensive. So, honestly, it all comes down to the numbers and projected cash on cash return. Pick the property that provides the highest return on your investment!

4) X Factor… You NEED to create Instagrammable moments - cater towards experiences over just having a place that people can plop their head on a pillow for the night. We live in a digital age and it is critical for you to stand out and have a higher click rate than your competition. You will be able to charge more per night and have a higher occupancy, yielding a higher revenue, cash flow and cash on cash return!

5) MOST IMPORTANTLY investment analysis - I use a custom sheet… focus on which investment will bring us the highest cash on cash return. If the numbers make sense, the deal makes sense! Cash on cash return is taking the annual projected cash flow, divided by the total dollars invested out of pocket. In short term rental world, I have a min of 25% cash on cash return.

6) Furnishing your property. What to spend money on and what to not spend money on… what are your key areas that will be your first 5 photos on Airbnb? These are the areas you should spend more money on! Also, get professional photos!

7) Set up for automation. Use tools such as Yourporter or smartbnb and Pricelabs to automate guest messaging, calendar syncing and pricing adjustments.

8) Treat it like a business. You need appropriate insurance - I only use Proper Insurance or Foremost insurance. They provide umbrella policies and cover you from a personal injury liability perspective, which is a MUST for operating short term rentals.

Set up separate bank accounts - one for each property and keep detailed track of revenue, expenses and cash flow - custom sheet or quickbooks
Airbnb perpetual lifecycle… Once you achieve positive reviews, this will ultimately help boost your listing in Airbnb and VRBO in search. This will get you more clicks and ultimately more bookings, further out in advance. When this happens, your availability goes down, but demand up. So you can start charging more per night!

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Видео How To Successfully Invest In Short Term Rentals (Airbnb + VRBO) канала Michael Elefante