Choosing a duplex property
- Choose a property that has a ROI of 20% of higher. Annual Cash Flow DIVIDED by the Investment (they money you put down on the mortgage, not the total cost of the property)
Example: if you put down $20,000 for a duplex, and the rent for each of the two units is $850, the calculation will look like this:
Monthly Cash Flow = Annual Income/Rent ($850 x 2) SUBTRACTED by Annual Expenses ((1,300 – which consists of mortgage payment, taxes, and insurance).
The Monthly Cash Flow is therefore $1,700 – $1,300 = $400
The Annual Cash Flow is $400 x 12 = $4,800
To find the ROR, we take the Annual Cash Flow ($4,800) DIVIDED by the Investments ($20,000), which equals: $24%
Mr. Money Mustaches takes on Being a Landlord
What an absolute honor is was to be featured on the very blog that kick started my road to Early Retirement. Here is an Interview I did with the Main Mustache himself, discussing Airbnb, Real Estate Investing, and Early Retirement.
In this blog post, I was interviewed to share some of the pros and cons of hosting. Although she was trying to did for sensational stories to match the flashy headlines, its really not that “costly” or scary to become an airbnb host. The article has some good hosting tips and things to keep in mind if you are planning to get started.
How to Get Started in Real Estate Investing: Step-by-Step Guide
A lot goes into understanding how to get started in real estate investing. It’s wise to make sure each of the points in this step-by-step real estate investing guide receives your full attention, since having your bases covered at the outset will make your passive income opportunities easier to manage.
When Looking for a Home To Buy, Make Connections with People in the City that know which neighborhoods are hot for Air BnB’s, etc, which neighborhoods you should stay away from.
Here’s an example of the steps you should take next:
Walkscore: 70+ is good to shoot for
Rentometer / Craigslist: I could rent long term at $850/mo (still giving me a 10%+return) A 20% return or higher is best.
Trulia Crime Map: Lowest Crime Area
Google Maps: 15min from Airport? 18mins to Sports Fields/Convention Center? 4mins from a University? 2mins from urban area with cool walking street with Restaurants, Bars, Movie Theater, & Music Venue?
Google Maps – Street View: are there decent cars on the street? Any junk in the yards? Are there abandoned buildings or boarded up homes?
Airbnb/Airdna for price comparison
Once you Close, Review the Inspection Report
You want a house ready to go. Look for the following things to be in good shape:
- water heater
- A/C (if there is one)
If You’re Furnishing the House to Rent on Air Bnb, Ask for Additional $ on Loan
Furnishing a 3 bedroom Home could cost quite a bit of money. You might want to allocate a loan of around $70,000 to make sure you’re covered. Try to furnish within a couple weeks and start renting on Air BnB immediately.
To Get Started, Consider Buying a Place with a Great BackYard, and Rent out the Backyard as a Camp Site on Air BnB
How to Calculate a Good Price for Your Air BnB
Calculate my prices is to use a third party pricing tool.
These apps automatically connect to your listing and update your calendar on a daily base, which also helps your listing rank higher.
Communicate with Guests Before They Arrive
- Ask questions.
- Have you booked your flights yet?
- Can I help planning your trip?
- Are you visiting any other countries during your trip?
- What are you looking to do in my city?
Provide Your Guests with a Guide
Automate Messages, Payments, and Other
Find more info here: https://getpaidforyourpad.com/airbnb-tools/
Tips for Managing Air BnB
Taken from Zeona’s website:
–Booking Window – 6 months. I find that 1 year is a lot of months to continually stay on top of and edit. Sometimes I won’t hear about a special event that far in advance and end up booking dates for too cheap. 6 months works perfectly.
–Minimum stay – 1 night. This one people go back and forth on. I like 1 day, especially for condos because those guests are paying the highest rate, barely leave a mess and fill in awkward days in the calendar. This can also leave you open for weird sex one nighters, but you should be able to see what a guests intentions are in their messages. For homes, I usually do 2 nights min.
–Sync Calendars – I am actually embarrassed that it took me so long to find this blessed little feature. I believe I was 3 years into juggling Homeaway/VRBO and Airbnb schedules when I realized automation was a possibility. Do it! It’s a life saver and really the only way to go.
–Discounts: Usually I put weekly at 15% and monthly at 30% and yet if someone has the gumption to ask for an additional discount, I usually reward them with working with them if we can find a good middle ground. I’d rather close the deal than turn them away.
– Extra Charges: Cleaning fee: I set the cleaning fee at $5 more than the usual cost to cover cleaning supplies and the rare expensive/extensive clean that I have to dig into my pockets for. I charge $5 per person (per night) after 1 person to incentivise business and solo travelers, also it helps with the fact that more people equal more wear and tear. Some people don’t like this format, but it’s a new thing I’m trying out. So far I’m a fan. Security Deposit: I am beginning to set these a little higher, I like around $200-250 for condos, $300+for homes. This is the money that is really easy to access if there is any damage to cover, anything above and beyond can be tricky to get out of Airbnb. Damage is rare, but does happen, protect yourself as a host. Weekend Pricing: I don’t use this setting as it locks in a price for all the months open and I do pricing on a sliding scale based on how far away the date is.
-Turn on Instant Book. I know, I know people always say they want to monitor guests closely, but with Instant book you get way more bookings and they have a fun little clause that allows you to cancel any guest penalty free within 24 hours. Make sure to have guests require verification, require positive reviews and add any rules for them to agree to that are important to you.
– For 1 bedrooms I usually make is check in 2pm, check out 11am, for anything larger check in is 3pm. I set up every home with keyless entry or lockboxs so they have 24 hour access. No one wants to meet a guest at 11pm, it just doesn’t need to happen unless you have a very luxurious or complicated home.
Self Check in: Put the code and use details of any fancy locking system you might have in this box here. I also have it detailed in the house manual.
-If you have a new home and no reviews you gotta set this on flexible. Once you have a good set of reviews, you can bring it up to moderate. I usually leave it there but strict can work on excellent / high demand properties too.
-Let your place shine. Here is the place to really brag. Guests like details. Talk up the amenities don’t be afraid to get detailed: TV size, bed sizes, special appliances, etc.
-It’s important to note here if you normally have a pet living with you, just for guests with allergies.
-Don’t be afraid to be transparent, it can be helpful to also clearly state what people may not like about the listing as well in order to attract the right guests for you and get the best reviews. For example: “Guests love our our proximity to all the downtown happenings. This listing may not be for you if you are a light sleeper. ”
-For the most part the map is pretty accurate but make sure the pin is in the right spot.
-License number is important if your town has these regulations in place for short-term rentals. You don’t want to mess with the city officials.
-Take photos from all 4 corners of the room (corner shots look better than straight on for homes) with some close ups of art and interesting pieces / amenities. Of course you won’t put all the photos up but some of the best listings have 40 pics. Make sure to have a pic of the outside, yard, landscaping and any extras like the gym / pool. Take photos during the day, although I close the blinds and turn on the lights, and edit them to make sure they are sharp with good lighting. Airbnb offers free photography in some areas and yet it can take up to 2 weeks to get the person to your home so do your best with phone photos unless you have a better camera, until you can get that photographer over.
-Add all the features available in your home
-Making a home business traveler ready is a great new badge to put on your ad. Make sure to provide all the necessary items.
Tips for Automated Messages, from Zeona
Taken from Zeona’s blog: https://www.zeonamcintyre.com/blog/2017/6/11/8-saved-replies-every-host-needs-for-their-rental-apps
- Use the word “Home” or “space” to describe your place, saying “House” or “Condo” would require you to change it for each listing based on the dwelling.
- Do not write “Let me know if you have any Questions” in your replies. If they do they will ask. Asking this makes them look for questions, you are not aiming to prolong the conversation. Use the FAQs from guests to make your Ad and House Manual super thorough so guests won’t have questions.
And here is what Zeona recommends for automated messages themselves:
- Directions – Is your driveway a little tricky to find or are you in a large apartment complex? Detailed directions or helpful tips can be saved in the “Location” section of your listing.
- Wifi – You can enter your Network Name and Password in the “Basics” section to also have that auto sent to guests and for quick access in the saved replies.
- Booking Confirmation (send the moment a client books, it cuts down on them asking a million questions) – “Thank you for booking our home, we are excited to host you! Please take a moment to review the House Manual before your stay. It can be found in your confirmation email from Airbnb, online or in the app under the “Your Trips” section.” (you can save your house manual in a PDF form and then attach it. Once you’ve attached it one time, it will alway be available in your attachments on the message threads).
- Evening of Check In Date – “Hi there, just checking in to see that you got into the home smoothly, I hope you are settled in and enjoying the space.“
- Day Before Check Out (this can be tricky for 1 night stay, so you can create a combo of the check in and check out message or times them strategically)- “I hope you had a great stay! Just a reminder, check out is before 11am (or whatever time yours is). We hope to see you again in the future, have a safe trip home!”
- Review Request – “We hope you had a smooth transition home. We are so pleased that you choose to spend your holiday with us! If you could, please take a moment to leave us a review. We are close to Superhost status so your 5 stars really mean a lot! Thanks again and we hope to host you in the future.”
*If you are going to ask for a review, it’s best if you have already reviewed them yourself. I always suggest waiting for feedback from your cleaner before leaving a rave review.*
- Homeaway/VRBO – templates only.
In inbox, click on a message. In the reply box you’ll see a dropdown menu — “select a template”. In the menu — customize templates. Edit current templates and/or add new ones. Once you update a template, you automatically access it on every single listing. IGNORE PAYMENT OPTIONS – choose Manage Email Templates
How To Hire a Cleaner?
I copied the following from the Zeona blog: https://www.zeonamcintyre.com/blog/2017/12/30/how-to-hire-and-train-a-rockstar-cleaner
You can have the perfect location, a well appointed, gorgeous home and guests lining up around the block to stay there, but without a great cleaner, you’ve got nothing.
Sure, a lot of people just starting out will try their hand at cleaning themselves and yet, it can be a tedious task over time and if you decide to leave town or want to scale your business, you will definitely need someone to tag in, so this is an important skill for all.
So let’s get started: Where do you find them?
I used to hire single folks from craigslist and still do in a jam, but the first place I suggest these days is a Vacation Rental Cleaning Service. A quick search on google may turn up a few options in your town, but if it doesn’t I also recommend trying out Yelp or Angieslist. Sure, a cleaning company may charge a little overhead for hiring, training, and scheduling staff but the benefits are: having more than one cleaner if someone is sick, more flexibility/availability in scheduling, and a company backing up the work just in case the person does a poor job.
*Please note: Vacation Rental cleaners and regular monthly house cleaners are completely different animals, it may be very difficult to hire a normal cleaner for an airbnb job.
Whether you are making an ad or just inquiring over the phone, it’s important to set expectations.
Here are some important questions to ask to see if they are a good fit for your needs:
-Are they available every day of the week?
-Can they be available during the cleaning window? Typically 11am to 3 or 4pm depending on size of the home.
-Can they do short notice? If not, how much lead time do they need?
-Do they have a team so someone can cover if someone is sick or out of town? If it a single person, would they be willing to hire/train a friend to help them if you give them more business?
-Can you schedule with them by text/email? My software sends automated messages to my cleaners for scheduling, cancellations, and alterations to the schedule. You can also just forward booking notifications you receive to use for scheduling. It’s nice to save time and try to automate as much as possible.
-Can they invoice you to get paid? This makes it easy so that I don’t have to keep track of whether they had cleaned that day and whether or not they have been paid yet. The invoices help us keep track of that. I prefer not to get daily invoices. I tell them we can do weekly, biweekly or monthly payments. I also prefer to pay via credit card (points/miles) or paypal. I am not in the same location many of my properties so I have to be able to pay digitally, it’s also much easier to keep track of for taxes.
-You may want to ask what sort of training they do and what their policy is around deep cleaning for vacation rentals. My local Boulder team rotates deep cleaning rooms of the home depending on the week of the month so the home is not just surface cleaned. My team lead leaves this sheet laminated in the homes and make them sign with a dry erase pen next to what they did and send a photo along with photos of the home after each clean. She really cracks the whip and I love it! Here’s the sheet they use.
Whether they want to come to the home to give a quote or can do so over the phone:
-Make sure they understand you need a set price for every time. Sometimes it will be barely used and other times more dirty. They need an average price that works for them.
-This price needs to include laundry. I don’t care if they do it at the property, take it home or at a laundromat, but it is their responsibility and I don’t want items mixed with other homes or left running in the dryer. It needs to be folded and put away. There always needs to be enough towels left in the home for the amount of maximum guests. If there is an air mattress or pull out couch, there needs to be bedding there for that just in case. (*I recommend my clients have 3 sets of sheets per bed and towels for the home, just in case the cleaners get backed up on laundry.)
-Fair pricing is $20-30/hr, 1 bedroom is 1hr-90mins, 2 bedroom: 90mins-2hrs, 3 bedroom: 2hrs-2.5hrs. 4 bedroom: 2.5hrs-3hrs. Etc. You may find $35/hr with a cleaning company but anything beyond that is crazy town, move on.
Depending on where you hire the person from, they may require more or less training.
A good half of the properties that I manage are not located in the town where I live, so many people like to ask how you can hire and trust cleaners from afar? First, when I am hiring, I lay a hard line of 3 complaints and you’re out. The great thing about running an Airbnb or Vacation Rental is that your guests will tell you when a clean in unsatisfactory.
If I have more than one property in an area, I like to have a head person in charge, whether it is a contact at the cleaning company or someone I have hired off craigslist who has proved their dependability and skill, and has agreed to hire and train the newcomers. I work with this person to decide how we want to track the cleans.
Here are some options.
-Have checklists. I have seen some places have a checklist in a binder that is kept in each home that cleaners can reference. I use an app called Properly for some properties. It has digital checklists, refers cleaners in the area, and can store pictures, but here is a monthly fee for the service.
-Require photos. We require some photos in Properly and my Boulder head cleaner requires photos of every room for every clean. She uses Slack to track that. I think it is incredibly useful to have photos to reference if there is ever an issue with a guest. I’ve unfortunately run into guests who try to create issues to get comped stays.
Sure your cleaner will make the bed, wipe the counters, and scrub the toilet each time, but what about cleaning the windows, wiping the fan blades, and dusting the floor boards? It’s important to come up with some way to track this.
You can have deep cleaning checklists, thorough regular checklists, or brainstorm other methods with your team. I’d be happy to hear how you guys do it in the comments below as this a common question people grapple with.
Another thing that helps in this department, is having different cleaners service your property. If it is the same person every time, they may get in a groove and always do it the same way, another person will deep clean different areas which can be really helpful.
Prepping the Home
*Most importantly your cleaners must understand that the home is to always be left “Guest Ready”, even if they think a handyman is coming or they might come back later. Leaving a place unfinished can cause problems. *
Make sure a part of your checklists or training explains how you want the home to be left. Do you leave towels on the bed? Do you like them folded a certain way? Chocolate on the pillow? Wine and glasses out? House manual on the coffee table? All these instructions are important to detail specifically, leaving items for the cleaner to figure out will leave more room for error.
Restocking the home
For most of the properties, I have the cleaner notify me when we are low on items and I have them ordered from Target.com and mailed to the home. Make sure they let you know when there are 4 rolls of toilet paper left, not one.
Here is the list that I have them check every time.
-Shampoo, Conditioner, BodyWash (every shower)
-Hand Soap (every sink)
-DIshwasher soap (if applicable)
-All Purpose Cleaner
-Wine (optional, we set one out everytime)
Do you have any cleaning, hiring, training tips to share? Leave them in the comments below.
Rent Your Car
Get Free Airline Tickets
access to a car or be in a walkable location is great. A 2-week stay or longer is great.
Use Craigslist or Facebook to find those in need of a sitter.
www.HouseSittersAmerica.com is hit or miss.
www.trustedhousesitters.com is a good one.
Stay Connected to Your Rentals Back Home
From Zeona’s website: https://www.zeonamcintyre.com/blog/2017/7/19/how-do-i-travel-like-you-airbnb-travel-hack-pet-sit-oh-my
“My secret travel weapon is Google FI. Google has an incredible, relatively new, phone service offering that can’t be beat. For $20 you get unlimited call/text, and Data worldwide is only an additional $10/gig. I’ve had the service about 2.5 years and still haven’t found a country that they don’t cover. From the jungles of Costa Rica to the rainforests in Jamaica, I’ve been right there to answer guest questions, send a quick text off to employees, and feed my instagram babies with new content. All for between $35-45/mo.”
Get Your Finances in Order
Use the 4% rule to determine projected passive income. Save 25 times your yearly expenses.