airbnb investing Archives - Financial Independence Through Investing

Posted on May 25, 2020May 25, 2020 by TheYoungRetireeBy33 — Leave a comment

March Airbnb Financial Update – Ol’ Faithful

Time for a long overdue set of Financial Updates for each of my properties! I have been investing in short term rental properties for the past almost year now (along with house hacking) and I have tried to document my journey on my Instagram account. It has been a wild time with everything going on, but it is finally time to put all the numbers out there for everyone and anyone who cares to follow.

If you want to check out the update from February, click the link here.

Ol’ Faithful Financial March Update

Now time to dig into the numbers to see how March went for Ol’ Faithful. If you aren’t already familiar with Ol’ Faithful, checkout this link to read more about the property. March was an interesting month to say the least. A lot of information was just beginning to come out about the current pandemic we are in and how it would begin impacting travel was very intriguing.

Disney announced they would be closing on March 15th, 2020. This meant in the middle of the month, all of my guests would no longer be able to come to the area for the parks. The target audience for my short term rental business is people who are coming to the area for Disney. The month of March was impacted significantly. I had three guests cancel towards the end of the month and then I ended up dropping my prices by over 50%. That is when I had a fun guest book. If you don’t remember the whole cops being called to my Airbnb, you can read everything that happened at this link!

Anyways, here are the final numbers for March:

Income Stats

Overall, the income was pretty solid in March. This was mainly driven on a high occupancy for the month at 84%. I was able to get 26 of the 31 nights of March, but as you can see, the average nightly rate ($106) was much lower than previous months.

The main driver behind the lower average nightly rates was the decrease in prices I made due to COVID. It has been an interesting time for the hospitality industry. Especially in Orlando where the majority of our economy is driven based off the amusement parks. Once Disney announced they were closing on March 15th, that was a big hit to our industry as a whole. At the time of writing this post, Disney has yet to set out a path forward to reopen. Only time will tell.

Expense Stats

No crazy expenses to report out on this months total breakdown. There are two things I have added to the overall expense column. Taxes and Cap Ex account.

Taxes

The county takes 6% tax of your total gross income where I operate. Pretty simple calculation, but need to make sure you add it for properly calculating out your expenses.

Capital Expenditures

For now, I am putting this off to the side to handle any capital expenses that could come up throughout each month. The other month I was hit with a big $2.3k bill for replacing the pool pump. This capital expenditures account will essentially accrue and I will “pull” from it as expenses like that come up. This will help level load some of the capital expenses from understanding cash flow versus one month taking a big hit and then other months cash flow looking normal.

In future months, it will be more clear as to how exactly this will work.

Overall Cash Flow

Overall, the numbers for the month of March were okay for my property. Nothing spectacular, but all things considered, I am extremely grateful for being able to cash flow. All things considered you have to be happy with an up month during the midst of Corona.

Cash flow for the month ended at $579. Typically March is the beginning of the high season in Orlando for the parks. You have a lot of the people who are coming for Spring Break with the family to enjoy some vacation. Further updates coming to see the full impact of COVID on my short term rental business at Ol’ Faithful. It gets ugly…just wait.

Posted on April 1, 2020 by TheYoungRetireeBy33 — Leave a comment

Cops Called To My Airbnb Property!!!

What a wild last guest I had at Ol’ Faithful! The cops were called to my Airbnb property and I would have never expected something like this to happen. Having the cops called to my Airbnb property was a great learning experience for me on how to handle the situation. The next time this happens, as I am sure it will happen again at some point, I will take the things I learned from this experience and I will become even better in how I handle it.

I can now say I have had to deal with the cops being at one of my properties. All in all, I am glad my property wasn’t completely damaged and the guest wasn’t harmed (at least from what she is telling me).

For those of you who weren’t checking my stories, here is what happened:

I had a guest who continued extending her stay, which I was fine with. I didn’t think anything was too off.
Two days before she checked out, she called me at 12:30 am. I was asleep and didn’t answer the call, but called back in the morning. No answer from the guest. I was a little confused. She finally called back and just wanted to let me know that the mirror in the master fell because of something and that she would pay for a replacement. Ok, cool no worries.
An hour later she calls from her Apple Watch telling me I need to call the cops. Someone slashed her tires and then her ex boyfriend found out where she was and forced his way in my home. Yeah…this is where it starts getting crazy.
I tell her to go to the front desk at the clubhouse and call the cops. First, I didn’t know what to do because I had never experienced this before; and, I am not there so I have no idea what is actually going on.
She goes to the front to call the cops. I try calling her back shortly thereafter and get no response.
I then call the front desk to see if they knew what was going on. The lady mentioned to me that the cops arrived at my place and they seem to be handling the situation.
I continue to try to get a hold of the guest with no luck.
An hour later, I call the front desk back. The lady at the front desk let’s me know the cops left and everything seemed to be quiet and good now.

Okay, that is all well and good, but what happened?

Finally Getting A Hold Of The Guest

I finally got a hold of the guest after two hours. She told me her ex had slashed her tires and then forced his was in and tried hitting her and that is when she ran outside.

I immediately stopped her and said, “There are only two things I care about. First, were you physically harmed in any way and are you okay? Second, is the inside of my home damaged at all?”

She told me she was okay and when asked if she wanted to press charges against her ex that she didn’t want to. She mentioned everything inside was fine.

Time To ACtually See What Happened

That night she calls me back. I am just thinking, oh here we go again.

The guest tells me she is leaving and apologized for everything that happened. After she left, I immediately deleted her access code from the door. I didn’t want to have to deal with someone getting back in. I confirmed the door locked and felt somewhat good about the current situation.

The next morning, I decided to go to the property to check out how things were.

Here are a few pictures of how the property was:

Here were the main things that happened:

There was excess trash everywhere in the home. You could definitely tell she just bounced and didn’t want to clean anything up.
The sliding glass door leading to the pool wouldn’t shut all the way. I was able to open the door and the realized this was due to the thing on the wall being bent. I reached out to my handyman and he said that is what happens when someone is trying to break in and open the door. So this lead me to assume her ex definitely did try to get in the back door and luckily she had it locked. My handyman is going out there today to fix this. I am assuming it will cost around $80 to fix.
Towels were left all over the home. Beds weren’t destroyed, but it was a mess. I knew I was going to get charged extra by my cleaners, which was fine by me. I would charge back to the guest.

Key Takeaways:

It is not if something is going to happen, but when. This is the same whether you are running a short term rental or long term. Long term, you just won’t know unless you do regular inspections of the property.
Don’t let something like this get to you. I controlled the situation to the best of my ability and understanding of how to control it.
I charged the guest $180 for the extra cleaning, breaking a mirror in the master and my handyman fixing the door. She immediately paid and didn’t ask questions. She apologized again and I wished her the best and that she stayed safe.

Don’t forget @TheYoungRetireeBy33’s 3 Core Principles:

1 – Your money should make money for you ⠀⠀⠀⠀⠀⠀⠀⠀⠀
2 – Start early to realize the power of compound interest⠀⠀⠀⠀⠀⠀⠀⠀⠀
3 – Eliminate your largest expense by house hacking

Posted on March 30, 2020 by TheYoungRetireeBy33 — Leave a comment

What Airbnb Is Doing For Hosts – 4 Actions Airbnb Is Taking To Support Hosts

This evening, the CEO of Airbnb had a live meeting to discuss the 4 actions airbnb is taking to support hosts. There has been a lot of backlash from hosts who are in a very rough spot since the pandemic, and many hosts are going to struggle to pay their mortgage or rent.

With that, the Airbnb CEO finally decided to step up and talk to hosts. For many like myself, it was about time to hear something from Airbnb. The only thing hosts like myself have heard was that all guests who booked would be receiving a 100% refund for the extenuating circumstances policy. I am 100% for people’s safety, and don’t want people traveling if it isn’t the right thing for them, but it has been tough for everyone.

No matter if you were in short term or long term rentals, it has been a tough time.

Here are the four things the Airbnb CEO has pledged to do

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Here are the four actions the CEO promised they would do. Some of the more granular details are yet to be seen, so how everything will work is still up in the air. ⠀

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First, Airbnb will payout hosts $250,000,000 based off 25% of the cancelation policy the host had in place for any bookings that canceled due to COVID-19 made prior to 3/14. This means, if your cancelation policy states you provide a 50% refund, then that means you would ultimately be paid out 12.5% of what you were expecting to payout. ⠀⠀⠀⠀⠀⠀⠀⠀⠀
Second, they will offer a $10M superhose relief fund. This is by far the most vague of any of the things they are taking action on. How they will be determining who will receive money and how much was not discussed at all. I am assuming more information will come out at some point in the near future. ⠀⠀

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Third, they will be reaching out to people who have recently stayed at Airbnb’s and ask them if they would like to donate anything to their hosts. I think this is a nice gesture, but not really something many people can afford forking out money for at this point. ⠀⠀⠀⠀⠀⠀⠀⠀⠀
Lastly, they said all Airbnb owners will qualify for the small business loans from the stimulus package. Not 100% sure how this would work and who all it would benefit, so need to do more research on this one.

There are still many unknowns, but it was nice to at least hear something from the CEO of Airbnb. Only time will tell to see what actually happens and how much relief hosts will be getting.