Hey guys, I’m Brooks and I’m Mandee. So we’re husband and wife entrepreneurs and we believe that life and business are a
giant adventure and we want to live it with you guys.
So let’s get to it
hey guys welcome back in this episode mainly now are going to talk a little bit about Airbnb. It’s not even just Airbnb of just a short term rental business in general. Um, so we’ve had we have a home that’s in downtown Nashville that we have rented via Airbnb and also vrbo, which is another short term rental platform for Is it is it three years, four years? Maybe Do you know? I know you’re here my time my time person.
At this point, I believe it’s over five years for consumer viewer, Airbnb being while you were living They’re before we got married. So
true. Yeah, we’ve talked about that, too. That’s not the way I suggest everyone being in property. I don’t either, but we’re trying to make some cash. It’s like really cool. But then but then after that, didn’t we? We had a, we had a renter, they actually leased about a year and then went back to Airbnb. Yes. Okay. All right. So, okay. Um, so for a number of years now, yeah, we’ve been renting this property mainly via via Airbnb, but as a short term rental property. It’s in downtown mobile. And that’s the reason why we wanted to do it. And, you know, so recently, we kind of just kind of examine the opportunity, and we’re already in real estate we both have, we have brokers licenses, well, many years that he just went inactive. So as we have a license, we’re married this it’s kind of like one in the same. You don’t necessarily both need licenses. So we’re active in the real estate world. We’re always kind of looking for investments. And so we said, you know, we’re talking about getting rentals long. term as part of, you know, kind of a retirement plan. And so we we kind of said, Hey, like, we know how this operates, we’re comfortable with with the platform, right? We’re, we’ve had really good experiences with people at our home and taking care of it.
Do you want to explain a little bit what short term means?
Yeah, yeah, no, that’s a great point. Yeah. So we probably should say, you know, Airbnb is now been around for I think, 11 or 12 years. So it’s a really, really stable platform. So the bulk of people have probably heard about it, but yeah, short term can be anywhere. It could be a night. We had a minimum of a two night stay at our property, so people would rent from them for at least two nights. And then we would have we had sometimes where people stayed more than a month actually, you know, if they’re here for for work or corporate job, you know, they need it for a month. So we’ve had a few a little bit longer than a month and mostly, you know, the longest is typically around 30 days, sometimes it’s a week, but the typical stays, I would say like two to three nights. nights are probably three nights for like an average stay. Um, but yeah, so in essence, what you’re doing is just a person that needs a place for short term for for vacation, work, travel, whatever reason that they’re coming to our, to our city. And so that’s kind of what that is. And I would, I would go ahead and say that I prefer that method of renting, then a long term, I don’t know why I just do it’s like, for me, the advantages are that it’s, there’s, I feel like there’s less wear and tear on your property because, you know, maybe we rent the property out 15 nights a month or 20 nights a month. And people are kind of having their kind of stay in there. Right. Like during the I mean, during the day they’re out doing whatever business that they’re doing or whatever event that they’re, you know, doing and then at night, they’re just kind of crashing your property. They’re not. They’re not like living and hanging out at your property all day long. And so the way I see it is that like stuff doesn’t get really hard wear and tear. On the property. And so that’s probably my main reason also, the second reason is just that you can make more revenue on a short term basis. I mean, just kind of look at what a hotel costs per night and you know, kind of gauge in there that that’s what you’re renting your home for. So you can make more money on a monthly basis. And obviously, the utilities you’re providing a fully furnished place. So there are higher expenses as well. But you know, overall, we’ve looked at it and kind of run our numbers and we really like the returns. We like how the system operates, and we’re just comfortable with it. And so we’re looking to expand that. So right now, we’re literally in the middle of
Sunday afternoon, we went looked at a number of properties.
The interesting thing is that we’re looking for both places that are for sale, but also places that are for lease so there’s a strategy that people call rental arbitrage.
Did you have You ever heard that term before? I
thought you had made it up? Yeah, I can explain that one a little bit.
Brooks, what are you scheming now? So okay, so I didn’t make this up. It’s nothing like nothing sketchy, nothing weird. Basically, what you’re doing is you’re just you’re finding a home that’s for lease. And you are, you know, you’re asking the landlord or the owner. You’re asking them hey, like, would you allow us to lease the property and then sublease it like, you know, as a short term rental as a corporate rental? And I think some people maybe you’re kind of like sketchy, maybe about it or whatever. Like, maybe they don’t tell a landlord what they’re doing, which I think is really dumb. I mean, it’s just literally my first question to every any property I see that looks interesting. I’m just like, Hey, would you have interest in this? If they say no, then great move on. If they say yeah, we’d be open to that then Okay, great, then maybe not go step two, and we go have a look at the property. And we have one right now that we potentially are going to sign a lease on and you know, already like looking at furniture and all this And so for a, like a two bedroom place, it’s probably one call sound a what $8,000 give or take to fully fully deck it out and when we say fully decked out yet fully decked out, right, it’s it’s all your furniture but it’s also everything everything living right, so all pots and pans and cups and plates and stuff,
everything that you would need the kind of the comforts of home if you were to cook a meal or do laundry, those kinds of things.
Exactly. And so that one’s a two bedroom that we’re looking at, and we think one bedrooms, maybe we can get away with maybe like 6000 give or take, I mean, and that’s kind of that’s kind of the whole that’s kind of the whole kit, it’s like buying all this stuff, I’ll say like, you know, having it set up getting photographs of the place, which is you know, we’ve we’ve kind of found a great local real estate photographer. It’s about $100 for that we think that’s Paramount if you’re going to get into this type of business. And so anyways, that’s kind of price points for those and so that’s sir rental arbitrage. is just it’s it’s that finding, finding a lease that you know, you’re on the hook for the lease, right? Like we’re willing to sign we’re willing to take a risk and sign a lease for up to 12 months. Right? So means if it doesn’t go well, and we’re not renting for what we thought we would or if it’s not, I don’t know, it just something doesn’t work out like we we are legally obligated to pay that lease. I mean, maybe if something went really bad, maybe we could potentially offer to get out at least early or something and have some kind of buyout but worst case scenario, like we’re, we’re prepared to pay the 12 months of that lease, you know, deposit up front and, and do that, but we’re also looking at properties to purchase to do the same thing. And, you know, we’re looking in our downtown area as well as our Midtown area. Just because of research that we’ve done. Just kind of shows that Okay, that’s definitely our best day. Which which totally makes sense because it’s close to the action downtown where people might come in for conventions or need to do business. And so so we’re looking at that. And
it’s interesting because we’re, we have kind of, we’re creating this filter of how we’re looking at properties. And so what we’re saying is if we’re potentially going to buy a property to Airbnb, we want it to work in one of three ways. Like we want it to potentially work as a flip, where we would buy, renovate and sell the property. It also needs to work as a long term cash flowing rental, and then it also needs to work as an Airbnb short term rental. The reason? I think why we want it to work for all three is if one aspect doesn’t work out, you have the ability to use one of the other two strategies, right? Yes. So, you know, it’s not as easy to have one word for all three. But I can say that as long as you’re, you’re starting in the area that you’re looking in, like, wherever that is in your city or whatever, as long as you’re starting in that area. If it fits for a, in my opinion, if it fits for a flip deal, a renovation sale, then I think by default, it typically will work as a long term rental, as well as an Airbnb property. I could be wrong, there’s obviously not going to all circumstances probably not going to work out like that. But if the numbers work for the renovation flip, then it most likely is going to work for the other two as well. So what are your What are your thoughts with what I know? I’m always wanting crazy ideas. Or they seem kind of crazy, right? Like Kind of Adventurous like, hey, let’s check this out. Yeah. So when I presented this to you like what was your honest opinion,
when you first presented it to me, you presented it Me in the form of, hey, let’s buy an RV and put it in the yard and have people come in and out run it through Airbnb and those kinds of things. And I was like, absolutely not. This is our house. This is our yard. This is our, you know. And then I don’t know, I started thinking about it. And I was like, wow, this really could be a great income generator, and then we get an RV out of it. And so the conversation started there. And then he started bringing up the rental arbitrage thing. I was like, Oh, great, we gotta we gotta watch what you’re watching or listening to on podcast, but which is, I think where you found the idea, possibly YouTube podcast. Yeah, yeah. But now the more and more I thought about it, I was like, hey, this could actually be a legitimate side hustle for us and included with everything else that we do. So you know, I’m sold.
All right. All right. I like that. I’ve got that on recording here. So that’s good. I’m gonna I’ll be playing this back. Anna plan is back in like a year to like, Hey, remember when you said, You said you were sold? You know, it’s funny, I almost forgot about the RV. idea. And so like we’re actually we’re actually moving forward with that one. Like we cleared our yard out, which was literally an acre of a jungle that we’ve never known what to do with. We’ve never cleared it because we didn’t know we’re going to do right but now Now we kind of have a plan. We have a plan with that. And so we’re Yeah, kind of moving. Kind of moving forward there. We have some trees to cut and we have to talk to electrician, plumber and we’re going to make a spot for this track. Is it an RV? If it’s a travel trip, maybe it’s a travel trailer? I don’t really know which column to be on. I don’t know. Yeah, I think an RV is the one the drive
but so we’re going to get one that you pull behind so pull behind pull behind your truck, and we’ll see if it will it will know ours won’t be a fifth wheel because you have to have a special truck for that anyways. Yeah, um, but we’re really excited about it cuz we get to make it funky and make it our own right. Make it really cool probably like build a deck off. of it and have some cool lighting and
to feel like a, like a typical RV, whenever or whatever. Yeah, yeah, whenever we get a camper whenever we get done with
it, exactly, but this for it. So usually I listen to podcasts or watch YouTube or whatever and get some new business idea, you know, hundreds of ideas, but you can only you can only tackle a few at a time, right? But so I get lots of ideas. But when I listened to this, you know, my first thought was like, oh, man, this chemical idea. And I was like, wait a minute, we’ve literally been doing this for four years or five years or whatever, right? We’re literally already running this business, right? We’re already doing it. And it’s kind of it’s kind of excited me because it’s making me we while we make we are profitable at our house downtown, I feel like we could fine tune it and get better. Like we’re actually looking at making some improvements to the property to make it even better. And maybe our rates even go up maybe the comfort of the guests even goes up. And so I don’t know I’m kind of excited about you know, Drinking that and fine tuning and looking at that property even closer, and then having a good outline for, for future properties that we do. And plus, we always talk about, like, cool as entrepreneurs as business owners, like we don’t have, you know, what’s our retirement plan? right and so I think this is one of those potentially acquire some properties that we can rent on a short term basis and you know, so not only do we get the act of doing that and having fun and making income but you know, if we have mortgages on these properties, which we will if we get to have multiple properties, will be paying down those mortgages over time then eventually have assets you know, the homes that will be an essence all our long term, kind of part of our long term retirement strategy. Yeah, absolutely. Yeah, so that’s it’s a if you have not if you have not dived into Airbnb and checked it out, I would advise you to do it. Um, we actually have, we actually have a link not to like get you to entice you for that or but a link if you want to be a host You’re going to stay I think he gets a discount you get like 40 bucks off a stay or you get some money or whatever if you use a link that we have and so I’m happy to include that you know for you like where this ends up being in some in our show notes or whatever I’m happy to put that there for you. But if you have questions about Airbnb or how it works like connect with us I’m I’m an open book there I’m learning as I go even though we’ve been doing it for four years also feel like we’re brand new because rental arbitrage is new, different types of properties having more than one property so kind of like developing a team like we have a really good relationship with a cleaner that’s going to clean our properties as we go and will grow with her and that’s another thing just as one side note there is that the I think the biggest I think the biggest thing about the properties are about Airbnb is honestly that cleaning aspect
and has to be claimed. Yeah, squeaky clean and done. Right.
It’s like when you show it to a hotel. I mean, it’s exactly What it is it’s hotel service, right? So when you show it to a hotel room you walk in, you’re like, yes. You’re all excited. I mean, if you walked in and like the bed wasn’t made and like, clearly it wasn’t spotless, I mean, you would have a huge issue and so it’s the same thing with Airbnb. That’s exactly what guests expect. And that’s what you want to give them you want to give them the comfort welcome them to your place you know and it’s it’s there’s ways you can go above and beyond you can leave a snack in the fridge and you definitely have coffee you can pay you can leave some chocolates on the pillow or that you can do those type of things that just welcome people and kind of get in touch Yeah, yeah, exactly the added touch and go above and beyond but um, but we’ll make we’ll make another this won’t be the last episode, I assure you for talking about Airbnb. Like as we get further along in the process, we’ll do a follow up. We’ll do a follow up episode and then maybe we’ll have at that point, we’ll have who knows maybe we’ll have multiple properties are some can talk with and tell you tell you guys what we’ve learned. So what until then. reach out to us and we’ll connect with you next time. See you later.