Blog

Blog
Top Five Reasons to use Professional Short Term Rental Property Management

Top Five Reasons to use Professional Short Term Rental Property Management

Featured


The financial benefit has become clear to some investors that short-term rental (STR) properties can offer a more lucrative real estate approach then long-term renting to tenants. But STR’s are not for every investor! In fact, getting your first property purchased, updated, staged and listed to welcome your first guest can usurp a lot of valuable time and has many possible obstacles. This certainly is not a passive business model either. Instead, running an Airbnb rental requires daily availability for check-ins and communication with guests for inquiries and bookings, being consistently “on alert” for emergencies and damage control, as well as routine weekly visits for trash day and re-stocking. So, before considering purchasing or converting a home unit into a fabulous short-term property, one should strongly consider hiring a specialty property management team.

To help you alleviate stress while you await your first booking income checks, we’ve listed our top 5 reasons for why we think you’d want to hire a professional property management team to host or co-host on your behalf.

1. The Property Formula
Finding the “sweet spot” between price, property style, location and your return on investment can be supremely challenging and is not guaranteed for any house.  That’s why a professional STR property manager ought to be able to provide you some upfront answers and estimates to these STR questions. Since many property managers are also real estate brokers (as required by law in many states now) they should have added expertise for how and why your short-term rentals will or won’t perform, which neighborhoods are better than others and what repairs and staging will do for your bottom line. Remember that your asset must fall within the right price bracket or you risk losing much of your ROI too a costly monthly mortgage, repairs or utility fees. A bigger home isn’t necessarily better either, even if it falls in your budget since you must consider the cost of repairs, furnishing, décor and guest needs.

2. Higher Profits & More Free Time
With listings most likely continuously being added near your STR, competition stiffens. Having a property manager will keep you afloat with latest trends, events, and updates, while they also tend to the properties regular needs.  Inventory, cleanings, repairs and spontaneous guest requests can quickly add up to a considerable time investment that a professional team is skilled to accommodate on a daily basis.  Ask how your property management team handles emergencies, and what systems they already have in place, such as automated systems for communication, check-ins and who will be taking out the trash, shovel after it snows and cleaning the unit.  A Property Management team should be equipped to tend to the guest and property’s needs, which in return keeps reviews high and attracts in more bookings!

3. Maintenance and Repair
It is not convenient to have to drive an hour across town to check on reported issues or read every review to see guest suggestions. A professional team should have a good network of vendors if or when things go wrong like frozen pipes, glass in the garbage disposal, mice, eletricity goes out, the list goes on. Some property managers will get estimates for your property and oversee maintenance projects.

4. Staying up to date (Taxes & Legislation)
A professional should also be able to help you keep up with short-term rental legislation for your area and direct you to the right way to stay legit. There are numerous laws to abide by including local permitting, state and federal taxes to be aware of.

5. Pricing
You could be leaving money on the table if you aren’t pricing your rental correctly and since every home is unique it can be challenging to price your home accordingly.  Additionally, it can be extreemly time-consuming to regularly update the pricing of your rental by season, holiday or events in town. A professional will be able to price your STR and better balance occupancy rates with adjusted prices.

For information about our Rentalpreneur coaching or Real Estate services /STR property management services in Indianapolis or nationally, please contact us at info[at] rentalpreneur.com

by Lexa Foy & Rachel Prince

 

Top 10 Airbnb Pricing Tips for Major Events (like Indy 500)

Top 10 Airbnb Pricing Tips for Major Events (like Indy 500)

Featured


When can you make top dollar renting your home on Airbnb? Certainly, it’s when you live near a venue that can hold 400,000 people, like the Indianapolis Motor Speedway venue with one of the largest seating capacities in the world.

Every Memorial day weekend for the last 100 years, motorsports fans have flocked to Indianapolis to attend the Indy 500 top American Championship motor races at the Motor Speedway. People camp and bring their RVs for weeks at a time. Hotels and motels get booked up months in advance. With 175% more people than average looking for a place to crash this one weekend, this still leaves a huge housing shortage. Fortunately, Airbnb and other short-term renting / homes-sharing platforms have picked the slack.

For homeowners that live in a less desirable area for most of the year, but near a seasonal venue like the Motor Speedway, they can stand to make a small fortune in a short amount of time if they play their cards right. Here are 10 top things to consider on Airbnb when pricing for major events like this one:

  1. Higher demand means higher pricing so the closer you are to the area of attraction, in this case – the Track, the more value it adds to your rate.
  2. Be cautious when using Airbnb’s “Smart Pricing Tool”. This tool hasn’t always been very reliable.  You think it would recognize local events but it doesn’t. While automated Smart pricing may reduce time devoted to managing your calendar, the algorithms do not always accurately price for these major local events. You may need to go in manually to adjust the rates.
  3. Search around on Airbnb for other similar rentals to gage how much you could charge for yours. Or message hosts that already have bookings and inquire with them how much you should charge.
  4. Consider NOT using Instant book for this event. This way you can negotiate pricing for more additional guests, terms and better screen your guests.
  5. With many traveling in groups, Airbnb seems to be the most convenient option when keeping everyone together, without the headache of having multiple hotel rooms. Charging extra per guest is another benefit and way to add a lil more cash to your location for the weekend.
  6. Some people will pay more, last minute. Consider keeping your listing off-line until the last minute (1-2 weeks or days pre-event.)
  7. Consider adding a listing for camping in your yard or RV parking in your driveway.
  8. Add in a la carte services like an Airport pick up or shuttles to the track.
  9. Make sure you log into your account regularly. Airbnb awards active hosts with better visibility for your listing.
  10. Tell your friends. Sometimes they will have friends and family coming in who will rent out your place instead of strangers.

If you are interested in owning a short-term rental Airbnb home here in Indy get a hold of me!  email me at: info @ rentalpreneur.com or hostsofindy@gmail.com

HOSTS OF INDY – short term rental
INVESTMENTS | MANAGEMENT

Rachel Prince, REALTOR

Tucker
Written by Rachel Prince & Alexa Foy

3 Airbnb Essentials for Home Owners in Indianapolis [or anywhere]

3 Airbnb Essentials for Home Owners in Indianapolis [or anywhere]

Featured


By Lexa Foy

During a month-long trip to Colombia, South America, I had my first run-in with an Airbnb. All the hotels in the area were booked so our only option was to set up our profile and dive in. I was one of those people who scoffed at staying in someone else’s home, especially with the host there. It seemed awkard and unfamiliar.

Despite my initial thoughts, I quickly started to see that my trip to Colombia would not nearly have been as enjoyable without our Airbnb stays.  Not only did we get an inside look at the culture, the hosts were super gracious and helpful in giving us the local’s input which enhanced our stay two-fold.

After returning from Colombia, I became slightly obsessed with Airbnb and wanted to learn more about this real estate niche.  I enrolled in real estate school, scoured the internet, listened to specialized Bigger

Pockets podcasts that discussed this topic and best of all, came across a local Airbnb Real Estate Expert at the forefront of the movement, Rachel Prince- Rentalpreneur located right here in, Indianapolis.

Rachel immediately took me under her wing. Here are the top three things I learned after undergoing my first home set-up with her and her team:

  The Details Count:

Most guests who did not instantly book, sent an inquiry about how close a home was to a particular venue or had a specific question about inside the home, prior to booking. Having a list of recommendations already put together or being able to reply with details (about coffee pots, privacy, parking, type of bed) or assess distances to nearby locations was often an essential piece to converting many of these inquiries into bookings. Overall just being responsive and providing some details or simple recommendations when asked (like eateries or hotspots) helped to increase the guest experience, booking rate and ended-up reflecting favorably for us come review time.

  Stand out:

Give your listing or rooms a theme, and make them stand out. Get creative with the title, photos, decoration style and art. Whether a rustic reclaimed look or modern with a classic touch, guests look for the creative and unique touches when booking. What about the space will stand out from the hundreds of other options? I personally booked a home in Columbia because of the artsy décor and spicy color scheme which was completely different from the hues of brown warm colors I am accustomed to. When decorating this first bright Airbnb home in a downtown Indy neighborhood, I tried to find some unique touches and colorful wall art that would stand out against the periwinkle grey-colored walls. I realized the more personality and character a room or home has, the more alluring and cozy it will seem to the guests. I say, source a vision and a color palette and go for it! We added these Zinus platform beds with foam latex Lucid beds (pictured above) and our guests cant get enough of them! A well-decorated house that is clean and minimal will set you apart and make your guest experience end up with a unique with a five-star rating.

 Automation:

Keeping the home automated will makes the host and guest life easier. No more lost keys, lockouts or staying up late for guest flights to arrive. Smart door locks will automatically lock behind the guest on the way in and out, assuring the house is secure for the day or night. Smart thermostats allow the host to control the temperature of your home as it sits vacant or warming it up before the guest arrives, especially on those cold Indy nights.  These automation tools truly make the life of an Airbnb host much easier, are more cost-effective and allow the Host more control over their time by saving trips to the home.

With these 3 major aspects in place, it appeared as though most everything was already anticipated for the first guests way ahead of time and we could easily begin accepting bookings, with the ability to make minor adjustments or tweaks as needed..

For information about our Rentalpreneur coaching or Real Estate services in Indianapolis or nationally, please contact us at info[at] rentalpreneur.com

https://soundcloud.com/rentalpreneur/house-hacking-podcast-11-the-best-automation-airbnb-communication-tool

Airbnb Short-Term Rentals Booming in Indianapolis

Airbnb Short-Term Rentals Booming in Indianapolis

Featured


You could say we are going through a sort of mini short-term rental boom here in Indy.

Indianapolis Real Estate Broker, Rachel Prince

Recent Indianapolis Airbnb successes are not a huge surprise to me, however, since Indy has been flagged as one of the top 10 national emerging cities by Forbes and among real estate investors like, Than Merrill and Fortune Builders. In 2017 we saw SalesForce opened up their headquarters in downtown Indianapolis, only one of many tech and pharma industries that continue to help boost jobs and business travel here. Not to mention, Indianapolis has a unique cultural presence and strong support for local events, such as First Friday, Canal concerts and neighborhood street fairs. We are seeing a jammed packed downtown convention center with an influx of up to 50,000 in attendance in any given weekend for Indy 500 pre-events, national college sports championships like Big 10, as well as, Future Farmers of America. We are also seeing tremendous small business growth, especially in surrounding downtown communities like Fountain Square, Mass Ave. and Fletcher Place. Handcrafted breweries, distilleries, eateries, boutiques and small shops are defining Indy’s cultural revival, making them the preferred local hotspots for Airbnb travelers. .

Indianapolis Real Estate Broker, Rachel Prince

So the question is should an investor invest in an Airbnb home here in Indy?

With short-term rental legislation up in the air here, I’d say that your best best is to as always, invest in a property that makes sense for the long haul…then consider riding the Airbnb wave for a while. As I always say, if all else fails, you can always long-term rent it out. But with no shortage of business travelers or people driving through Indy’s strategic highway hub, I’d say Indy makes for the perfect short-term rental investment home.

I realize Airbnb homes may not be a fit for every neighborhood, but in the up and coming neighborhoods experiencing a revival & re-gentricfication here in downtown Indy, it makes perfect sense!  I like what an Airbnb home represents. These home make the Indy neighborhoods like Bates Hendricks safer. Plus an Airbnb investor or homeowner ( or at least the ones I’ve seen online and/or worked with) take greater care of their home, increasing the quality of the home interior and exterior, which ultimately help increase the overall value of homes in the neighborhood and also drives some local business by referring guests out to local hotspots.

The Indy market is quickly shifting to a seller’s market in many areas and prices are on the rise but I can usually still find my real estate clients a good deal. All in all I think that buying a home and renting it out on Airbnb here make perfect sense.  It’s a small but potent bustling city that is experiencing its teen millennium revival. There is a serious cashflow ROI to be made on quality Airbnb homes.

If you are interested in owning a short-term rental Airbnb home here in Indy get a hold of me!  email me at: info @ rentalpreneur.com

Rachel Prince, REALTOR

Tucker

Top 10 Vacation Rental Blogs

Featured


REPOST from VAYOO.COM
http://www.vayoo.com/blog/top-ten-vacation-rental-blogs

One of the big mistakes that vacation rental managers and owners make is to stay in their own bubble. Fortunately, it doesn’t have to take much to stay informed. In fact, it just takes a few blog subscriptions. We’ve compiled the “Top 10 Vacation Rental Blogs ” for you.

1. Get Paid For Your Pad – Jasper Ribbers

Get Paid For Your Pad by Jasper Ribbers is one of the top vacation rental blogs where you can easily learn how to become an Airbnb Hosting Master in order to improve your guest experience and increase your income. All you have to do is to take the Airbnb listing test and discover the flaws in your listing. Looking for the best and reliable vacation blog? www.getpaidforyourpad.com is highly recommended!

2. Optimize My Airbnb – Dаnnіеl Ruѕtеn

This blog is own by Danniel Rusten. He is an Airbnb Superhost (5% of all hosts). He has been a host since 2013 and completed 200+ reservations. His blog focus on getting your Airbnb listing to the top search. It’s called Airbnb SEO (Seach Engine Optimization). Depending on the package you purchase, he gives you Airbnb specific suggestions for your listing (Basic), creates a custom report based on your listing with specific suggestions (Advance), or reworks 100% of your listing and send you a custom report with additional info (Superhost). Additionally, you will find hosting tips in all the reports as this is a big factor in your search rank (i.e reviews).

3. Rentalpreneur – Rасhеl Prіnсе

This VR blog belongs to Rachel Prince. Rachel is a licensed real estate broker and graduated from the number 1 rated liberal arts school in America, Bowdoin College, where she received a B.A. double major in International Relations and Spanish. She currently works with interested home buyers, sellers and investors from all over the world on real estate transactions and high yield real estate consulting. This blog is the fastest way to see returns on your real estate, retire early, double your net worth and become CASH FLOW POSITIVE!!! Therefore, Rentalpreneur is highly recommended.

4. Vacation Rental Secrets – Antonio Bortolotti

The website www.vacationrentalsecrets.com by Antonio Bortollini has helped many turn their vacation rental property into a profitable business. Antonio is an excellent public speaker, trainer and event organizer. Besides the subject matter of vacation rentals that he masters extremely well, Antonio has a solid work ethic, and he gets things done quickly sticking to the deadlines formerly agreed. We do recommend Antoni’s work or products if you want to stand out from the crowd and you want to stretch your profits further.

5. Need More Rentals – Damian Sheridan

Needmorerentals.com by Damian Sheridan is a great resource for vacation rental owners looking for some professional insight. It provides first-hand stories from other owners in the business, DIY home improvements tips and talks about how to be a successful property manager. Have a question about renting your home? Feel free to contact Damian Sheridan and you will be glad you did.

6. Rental Tonic – Louise Brace

The rentaltonic.com is own by Louise Brace. The blog is a fast-paced, ever changing beast! The blog aim and objective is to keep you up to date with the latest tips, tricks, and marketing insights to help you fill that calendar in no time! Louise Brace is passionate about helping holiday home owners and managers to achieve full calendars & happy guest!

7. Laptop Landlord – Tуlеr Knudtson

The Laptoplandlord belongs to Tyler Knudtson. As one of the tip vacation rental blogs, Airbnb hosts do one thing better than their less-successful counterparts. But it’s much simpler than you might think.

Rather than try to figure out everything on their own through trial and (lots of) error, successful hosts find the best Airbnb tips for hosts and put them into practice themselves. They essentially cheat off of the notes of those already at the head of the class. This makes them the best among the rest.

8. Airbnb Secrets – Dany Papineau

Airbnbsecrets.com is own by Danny Papineau and is one of the most valuable Airbnb information websites on the entire Internet!

Dany Papineau shares a lot of Airbnb tips via his blog, and you can as well subscribe to his email list to receive free up-to-date information that will help you succeed as an Airbnb Host. We hope you find as much value in AirbnbSecrets as others have!

9. Rentalpreneurs – Thibault Masson

The Rentalpreneurs.com is one of the best vacation rental blogs and it is own by Thibault Masson. He created Rentalpreneurs.com in order for him to be able to keep track of the marketing research and experiments he was performing on his own vacation rental properties. The site was like his own private library of Airbnb tricks and other VR marketing tactics.

10. Learn Airbnb – Jim Breese and Symon He

Jim Breese and Symon He are the founders of Learnairbnb.com. They are certainly experts in the vacation rental space. The blog section for owners covers everything from pet-proofing your vacation rental to suing social media to drive website traffic.

Rachel’s Interview from Start-Up Property

Featured


REPOST FROM: https://www.startupproperty.co/blog/real-estate-disruptors-rentalpreneur

REAL ESTATE DISRUPTORS: Rentalpreneur
A disruptive real estate investor creatively disrupting the AirBnb scene

 

 

 

 Rachel Prince is the Rentalpreneur, and she tells her story of how she went from bedridden and broke to cash-flowing with no rent using AirBnB.

This week on the blog we talk to Rachel Prince, a Real Estate broker and Rentalpreneur. Using the Air Bnb model, Rachel helps people solve their short-term rental problems. Let’s get to know her a bit more, shall we?First and Foremost, please introduce yourself:

Hi, my name is Rachel Prince, owner and creator of Rentalpreneur

When did you start investing in real estate?

October 2005

How big is your team? Or are you a one-man band?

1-girl show

What part of town do you invest in? 🌎

Indianapolis, IN

What’s your investment strategy?

Short-Term Rentals

So, Rachel, how did you get into real estate?

It started back in 2008. I sold my condo and made a $40,000 profit. I knew I had a good eye for properties, but at the time I squandered all the money on foolish things! Which I now regret.

What is your current investment strategy and what are you currently working on?
My niche is definitely short-term rentals. I help my clients identify and convert their properties into short-term rentals on platforms like Airbnb. I also help them find and invest in new properties. Right now, I’m working on two out of three conversions for a client in Durham, North Carolina.

I recently moved to Indianapolis, Indiana and bought a property which is cash flowing very well. I really want to develop this Indianapolis market. So, I’m still building connections. I’ve put together some deals here and I’m trying to find the right investors to partner with.

What made you gravitate towards the Airbnb model and short-term rental concept?
Shortly after I sold my condo, I moved to Arizona and spent a year at a meditation yoga retreat. In 2011, I began making a documentary film about professional athletes who had setbacks but wanted to get back into the game.

Ironically, I got sick with rheumatoid arthritis while I was making the documentary. I couldn’t work because I was completely immobilized. Things got so bad that I had to apply for food stamps. I started hosting guests through Airbnb in my spare bedroom to bring in some income. It was a really tough time but this Airbnb thing turned my life around. I was able to earn $26,000 my first year, which paid for my holistic health care and got me out of debt.

So, within 2 years I literally went from being bedridden and struggling to pay rent to a 100% complete recovery and a successful career. From that point on, I was hooked on Airbnb real estate investments.
That’s amazing! What motivated you the most during that time?
I think everyone has different levels of tenacity and perseverance in their lives. For me personally, what motivated me was that I didn’t want to be in pain. I thought, here I am with a setback trying to get back in the game, just like the athletes in my documentary.

How did you come up with the Rentalpreneur concept?

I needed a platform, so I chose Airbnb real estate investments as that platform. From there I developed online courses for real estate investors who were interested in long-term appreciation and short-term cash flow. In other words, the “rentalpreneur.”

I began teaching on property conversions using the Airbnb model. Rentalpreneur teaches investors how to cash flow as opposed to here’s what you don’t have and here’s what you need.

Who fits into this Rentalpreneur investor category? And what do you look for in a potential Airbnb property?

The people that I work with are real estate investors trying to make their way in the world with maybe less than a dozen properties to start with. I like to work with people who are involved in the day to day process of owning an Airbnb property.

I have a system in my brain of what I look for in potential properties and I also teach that in my online course. However, when it comes down to it, I’m naturally just a really good shopper! I know what I like and I know what’s good. So, I’m able to find good deals, just like I did back in 2005 when I sold my condo. I’m able to score some prospects based only on a gut feeling, and then plug in the numbers to show my investors.
What was the biggest challenge you’ve had to overcome?
My health issues have been the biggest obstacles I have faced because when I didn’t feel well I just wanted to give up life altogether. Fortunately, I am really persistent and never gave up on myself. I always have Faith and believe we are meant to have fun in this life. I feel like the fun is just beginning!!

Goals & Advice

What has been your accomplishments since starting Rentalpreneur?

I love teaching and coaching investors about converting properties into the Airbnb model through my online course. There is some hand holding, but mostly coaching, mentoring and guidance. The investors who take the course find clarity on how they want to invest. I teach that you can have it all and you can also invest in Airbnb properties.

What are your future goals for Rentalpreneur?

I think the Airbnb concept extends well beyond short-term rentals. There is a wandering, “let’s have fun” culture or lifestyle attached to it. I want to continue to develop and personalize my coaching programs that keep up with the Airbnb evolution.

Has anything been particularly helpful or advantageous in your investing experience?
It has been extremely helpful continuing to learn from other experts and be around like-minded investors. This has been critical for my continued growth and that of my clients. I have found I do not need to know everything about investing yet, but when I take the time to learn a specific subject well, I can readily solve core problems for my clients while also having the resources to refer out. Plus I am super passionate about Airbnb real estate investing, so that helps.
What is your number ☝🏼 piece of advice you would give to a first-time real estate investor?
DO NOT SELL UNLESS YOU TOTALLY HAVE TO! Whatever you do, keep your property. Have someone manage it for you if you must, but let it cash flow for you. Keep the income coming in so that when you do retire, you know the property will continue to generate income and appreciate in value.

Where Can We Find You?

Rachel, thank you so much for taking the time to talk with us. Your testimony is exactly why we showcase these real estate investing stories! Where can we go to learn more about Rentalpreneur and your online courses?

My Pleasure!

You can find me on the web:

Rentalpreneur

You can find me on Instagram

And you can find me on Facebook

That’s all for this week! Thanks so much to Rachel for telling us her story this week!

Did you find this blog interesting or informative? Please, let us know by ‘liking’ and sharing this post! Interested in being featured? Send us an email at hello@startupproperty.co
Don’t forget to like and follow us, at StartupProperty on all of your favorite social media platforms!

Until next time, stay disruptive!
-Startup Property

DISCLOSURE:

This blog post is strictly an interview with Rachel Prince the Rentalpreneur, and we have no professional affiliate with them. While we encourage our readers to learn from fellow members in our community, please know that Startup Property is not responsible for any personal or professional purchases or business transactions that happen between yourself and the interviewee of this blog post.

The Best Beds for Airbnb’s

The Best Beds for Airbnb’s

Featured

Wow! I'm really loving this LUCID bed and my guests do too! I am getting killer reviews just on this bed!!! (I include a screen shot of some of my reviews).

I had heard of beds like this...arriving right at your doorstep in a box from Amazon and then POOF they expand into a life size bed! Then I slept on one in Airbnb home for a month. I was sold! So, I ordered one for myself!

There are several thicknesses. They have a 10", 12" and I believe a 14". I have the 12".

This is a cool blend of memory foam + natural latex mattress built from different layers. Top layer (comfort + cooling) – this is a 1″ Bamboo Charcoal memory foam layer and a 2nd Layer (support) – this a 3″ memory foam layer that provides much of the support for sleepers.

Its firm, yet forgiving. Unlike Temperpedic (which I cannot sleep on very well) this mattress is plush and super comfortable. It allows you to feel completely supported throughout the night.

The LUCID  mattress is best suited for people of average body size. The memory foam layer may be too thin for some side-sleepers but is great for those who prefer to sleep on the side or on their back.

  • Firm yet pressure point free
  • Good for couples due to minimal motion-transfer
  • Lightweight
  • Great value & budget friendly
  • 25 year warranty
  • Not ideal for heavy people (check Lucid 16" Mattress)
  • Short trial period (30 days)
  • Not ideal for some side-sleepers (check Lucid 12" Mattress)
LUCID 10 Inch Gel Memory Foam Mattress - Dual-Layered - CertiPUR-US Certified - 25-Year Warranty - Queen
lucid airbnb bed
bed reviews
10 Steps to Buying a Home with Low Income

10 Steps to Buying a Home with Low Income

Featured


can you buy an airbnb home if you earn a low income?

Someone once asked me, can I buy a home if I only make $30,000/yr? The answer is YES YOU CAN! Heck, you could probably get a home loan if the home was only a few grand and you were earning only a few grand per year in income. The reality is that its not just ONE thing that will help you get a loan and buy a house. In fact you need to to have several things in alignment (like your credit, your taxes and your income and some savings). Also, most low income home loans are government insured through FHA (Federal Housing Administration) so if you follow FHA requirements, your lender can give you a better deal (such as low down payments, low closing costs and easy credit qualifying). The U.S. government is very supportive in helping it’s citizens invest in buying home because they have determined that the risk is favorable.

Here are 10 of the most critical pieces you will need to prepare and gather for your lender to get FHA loan assistance:

  1. LENDER: First, off vet a great Lender that you jive with! If they text and you text, great! If they don’t work Sundays and you’re cool with that, great! Start working with your lender to gather the essentials! They will be key and help guide you!
  2. TAX RETURNS: Gather 1–2 years of tax returns showing you make $30,000k. Keep in mind if you write off most or everything, you may not qualify for your loan. ALSO: if you are self-employed & once you start reporting income the IRS wishes for you to pay quarterly in advance. So you will need to save more money upfront to start paying at the beginning of that new tax year. If you are w2′d you will likely have a much easier time qualifing for a home loan since you have steady income. Also your taxes will come out with each paycheck so step 6 does not apply to you.
  3. DOWN PAYMENT:What do you have to put down as a down payment on your house. Are you bringing 1%, 5%, 20%. Again this is a lender question but you
  4. PRIMARY HOME. Determine if this will be your primary house. Most likely it will be if you are going to get an FHA loan. The good news is do you have at my house in two years you’re considered a first time buyer and you can qualify for a 1% down loan. Alas, at $30K you might also be considered low income and therefore be able to qualify for low income assistance program for you only have to bring a nominal amount to closing. It’s an awesome program, so check with your lender.
  5. SEASON MONEY: “Season” or store your down payment in a bank account for 30 days. Your lender can estimate the down payment you will need to afford in order to close on a house.
  6. CREDIT: Make sure your credit score is above 640. If it is not then you will need to spend sometime fixing your credit. I like Lexington Law Firm.
  7. PROSPECT: You may need to look in different cities and states. You can buy a home in Indianapolis for 1/3 the cost of Denver homes
  8. SAVE: Stop spending money asap and start saving! You will need every penny once you buy your house since you most likely have new miscellaneous expenses and taxes. Also remember to save 10-20% of every paycheck and PAY YOURSELF FIRST!!! Also, in order to close you will likely be required to have saved several months-worth of mortgage payments saved upfront, so be prepared in advance.
  9. LEVERAGE: Lenders are allowed to increase your home qualification amount in different areas. For example in Denver at your income of $30,000 you may be able to qualify for a $250,000 house. While in Indianapolis you probably will not. Again, ask your lender.
  10. CLOSING COSTS:  Generally you will need to bring additional funds to the closing table but often the FHA low income loans help with this. Again your lender will be able to help you with this.If you would like more information on real estate investing and or how to do Airbnb real estate investing where you can learn to offset your entire mortgage with Airbnb by renting a room in your home, you can certainly set up a free coaching call with me here: rentalpreneur.com/letsdothis

How to Go from Renter to Homeowner Using Airbnb

Featured


People who are “renters” are typically the ones who say to me, “Rachel, why would I want to buy a house?” At first I was completely bewildered at this statement thinking “how are they NOT already investing in real estate, instead they’re wasting money renting!”  But then I remembered that I used to share this mindset too!  

I had rented for much of my life but purchased a fancy condo in the heart of Denver in 2008, that I would sell only 2 years later. Part of the reason I sold was because I quit my job and started my own company. I quickly wondered how keeping this asset with my new ambitious self-employed status and income was going to benefit me. How was I going to afford mortgage payments with my fancy new start-up lifestyle and travel? I began to think of my home as a liability. I failed to see how owning this asset was going to fit in with my new life. Instead, I sold everything, moved to the mountains and relinquished all my possessions so that I could again be free. At least I thought so, until after another decade of renting and not building any sort of retirement nest egg, I suddenly woke up one day and thought to myself, “WTF am I doing? I have nothing!”

So, what changed? And better yet, how do other people go from never wanting to own to not wanting to ever rent again?

Well, first let me acknowledge the fact that at the time I bought my condo, making money renting out a room or entire home on Airbnb and short-term renting was not even on the radar. All I could do to rent out my place was try to find a long-term renter on craigslist and lose entire access to my 1 bedroom condo for at least 3-6 months. Nowadays it so easy to make money renting a guest room in your home for a night or two (or week) on Airbnb to offset some or all of your mortgage, and even produce enough extra income to save, travel.

Robert Kiyosaki sums up brilliantly, “The true path to wealth is investing in cash flowing assets” versus renting where you are essentially throwing your dollars away. Therefore, it makes sense not only to OWN your asset, but find creative ways to CASH FLOW off of it. This is the biggest way I tend to overcome any objection, by demonstrating how Airbnb is a reliable, tested and proven cash flowing system that anyone can implement. And if for any reason someone needed to stop using Airbnb, they could always get a roommate to help cover a mortgage. In some cities, rent is so high that homeowners are making more than enough to cover a mortgage with just a roommate or two. But in my case, I never wanted to have another roommate again, and Airbnb affords me and many others this privilege. With a roommate as our default if all else fails, millions of hosts are able to offset their mortgage payments and earn extra income in their own home.

In retrospect, the problems I foresaw being a homeowner over a decade ago (especially a single homeowner) are the same as the ones of the people I run into today. Therefore, before being able to “convince” any renter of the benefits of buying over renting in today’s market, I first just ask what is the reasoning behind the mindset. Perhaps once we understand why we feel like owning is more of a burden then blessing can we begin to shift our mindset from what we don’t want and start focusing on what we do. Common renter mindset barriers:

  1. May not be focused in a career yet and are still searching for a career
  2. May like to travel often or don’t want to feel tied down
  3. May have family members preventing them in some way
  4. May be currently renting in a lease or have a great deal on a lease
  5. May not know enough to buy
  6. May not set life goals
  7. May not understand the benefits of owning a home vs the liability
  8. May live more of a transactional lifestyle (more hand to mouth)
  9. May not have a lot of savings for a downpayment or extra expenses to afford a house
  10. May NOT know their credit score or think it would make them ineligible to buy
  11. May suffer(ed) a health issue or life crisis or bankruptcy
  12. May not be ready for the responsibility
  13. May not understand how to or be disciplined to save
  14. May not understand the real estate tax benefit or how the government rewards retirement savings plans
    and lastly,
  15. May not have been taught how to be invest in or leverage real estate estate

While these are all valid reasons NOT to buy real estate, I believe that these are generally mindsets that can be overcome with education, like most things in life.  While there is a lot of responsibility and risk that comes with home ownership, any of the great thinkers and motivational speakers will tell you, there is responsibility and risk in anything worthwhile.  But in my utmost opinion, the pros truly outweigh the cons. If you relate to one of these mindsets, then you are not alone! Sign up to be get my free Airbnb kit and you will get instant access to my free webinar to learn how to start overcoming these objections and discover quickly whether Airbnb is a solution for you!! Or if you wish for a free coaching call please schedule one with me here: https://rentalpreneur.drift.com/letstalk

In the likelihood you just own your home asset and live in it without cash flowing it by renting a part of it, than that is still a healthy investment strategy since you may have the benefit of appreciation over time. If you do not have cash to buy a home right away or do not qualify for a home loan, then the next best step would be to get on a 5 year plan towards buying a home. As the old Chinese proverb says, “the best time to plant a tree was 20 years ago and the next best time in now.”

Again, if you relate to one of these mindsets, then you are not alone! Sign up to be get my free Airbnb kit and start learning whether Airbnb is a solution for you!!

About the Author:

Rachel Prince is a licensed real estate broker living in Indianapolis, Indiana. Rachel works as an Associate Broker for F.C. Tucker & Company at the downtown Mass. Ave. office located in the heart of downtown Indianapolis. She helps her clients make smart Airbnb Home investment decisions. She can be reached for consults here.

Rachel Prince

Licensed Broker
F.C. Tucker Company
Indianapolis, IN 46204

Stay tuned for my next blog: Airbnb Property Management Hack
ThanMerill.com
Airbnb.com
RobertKiyosaki.com
SuzeOrman.com

Airbnb & Vacation Rentals Make A Poor Passive Income Model

Airbnb & Vacation Rentals Make A Poor Passive Income Model

Featured


Let’s face it! There is no get rich fast scheme within the Airbnb world.

Vacation Rental Property

Just the time it takes to find, buy and close on a real estate property takes enough time. But when we factor in the time it takes to set, up, run and manage a vacation & short-term rental, we must question whether or not it can truly ever become a passive income model.

In my opinion, the answer is not really.

Its probably why some of the big wig management companies are getting out of the biz and closing their doors to the properties whose numbers just don’t make sense financially when all is said and done.

When all is said and done, means that all expenses are taken out including:
property taxes
income taxes
business expenses (like toilet paper, furnishings and bed sheets, lawn mowing)
utilities (like, wifi, electricity, water)
mortgage
insurance
incidentals (deposits & the unexpected)

and the big one:

PROPERTY MANAGEMENT FEES which typically run around 20-40%.

Why so high you may ask? What is included in short-term rental management?
Its mostly customer service and communication! A whole lot of it… Its like a hotel or a 24/7 concierge service.

We hosts must:
Accept Booking Inquiries
Manage Mulitple Bookings
Price Adjustments & Special offers
Customers at all hours of the day.
Check-ins & Check outs
Giving and Asking for Reviews
Managing Cancellations
Automation Tools
and more…

Bottom line? The amount of time required to outsource property management takes a huge hit on profits.

There are only a handful of short-term rental automation tools to automate and scale your business out there on the web. So I think that the reality is pretty obvious that is is business for the mom and pops and solo entrepreneurs, which is actually pretty cool. It means that the hedge funds, wall street and the big wigs don’t have an interest in dominating this industry. I have heard some investors with millions to invest are putting together a fund for a management company to handle it, but these are few. The rest are smaller entrepreneurs and independent companies riding the short-term rental wave as far as they can or until it becomes more regulated. After all, who wants to be in the hotel/motel industry? I suppose this is a grey area for those that really don’t mind running hotels… But for most of us, we are satisfied with some creative solutions to build our real estate pipeline as mini-hoteliers.

Until then, I see this as an industry that is designed for the people, by the people.

That’s why I like to call this the short-term rental revolution TM.

******
Are you an Investor, Landlord, Host, or Home Buyer looking for a solution to your real estate property? If so, Consider joining my Airbnb House Hacking Tribe FREE. Find out my Airbnb House Hacks HERE.

About the Author:

Rachel Prince is a licensed real estate broker living in Indianapolis, Indiana. Rachel works as an Associate Broker for F.C. Tucker & Company at the downtown Mass. Ave. office located in the heart of downtown Indianapolis. She helps her clients make smart Airbnb Home investment decisions. She can be reached for consults here.

Rachel Prince

Licensed Broker
F.C. Tucker Company
Indianapolis, IN 46204

Stay tuned for my next blog: Airbnb Property Management Hack
ThanMerill.com
Airbnb.com
R
obertKiyosaki.com
SuzeOrman.com

6 Secrets to Airbnb Mastery for Your Real Estate Property

6 Secrets to Airbnb Mastery for Your Real Estate Property

Featured


GET INTO THE MINDSET: You’ll need to start thinking and acting like a successful and profitable Rentalpreneur. As in any success story…success takes time to build and nurture… and when we are talking about building a real estate empire or saving one for that matter, the one thing we do know for sure, is that real estate takes time. So, for most of us, we will need to project out a little bit more time to achieve our goals. That doesn’t mean we cannot see the fruits of our labor coming back at us quickly. It just means to say that we can be realistic about the pace of reality. Movies give us a distorted sped up version of reality. In real life, things take a slower pace until we gain momentum.

CONNECT WITH OTHER MINDS: You’ll need supportive like-minded people around you doing what you are doing as well as a team of vetted third-party experts at hand for hire, to assist with home improvements, Airbnb automation and listing management.

MAP IT OUT: Start with a solid blueprint and be prepared to create a solid game plan and goals. The brain can comprehend small tasks very well (like go get gas, or go to bank) so consider having small goals that lead up to your big ones.

MARKET: Know the market you are investing and how to analyze your Airbnb deals and ROI’s. Scrutinize your prospective market. Check out google, yelp, craigslist, hotpad and Realtor.com to understand the area you are scouting.

MORE IS MORE: Take advantage of proven strategies, tools and systems that real estate investors use to create Airbnb Investing success. We aren’t re-creating the wheel here, not even with Airbnb. We are just using systems that have been proven and tested to come through for us in the end, so stick with these and go from there. Once the foundation is in place, then seek more.

GET READY TO MAKE MOOLA: You will start cash flowing soon, so make smart decisions when investing and re-investing your Airbnb dollars. Set up a separate bank account so that you remember to pay yourself first and deposit those funds into this account immediately. This is typically 20-30%. 10% towards your income, 10% for your savings, 10% for charity. Remember to allocate a tax fund as well. When you start making money as a self employed entrepreneur, the government will want to see your taxes head of time quarterly because they anticipate you doing the same amount next year and they wanna make sure you PAY. Its really a good idea, however it may set you back and feel really uncomfortable the first year.

Are you an Investor, Landlord, Host, or Home Buyer looking for a solution to your real estate property? If so, Consider joining my Airbnb House Hacking Tribe FREE. Find out my Airbnb House Hacks HERE.

Do you have an Airbnb Hack that you have used? Tell us about it!!  Email: info @ rentalpreneur . com

About the Author:

Rachel Prince is a licensed real estate broker living in Indianapolis, Indiana. Rachel works as an Associate Broker for F.C. Tucker & Company at the downtown Mass. Ave. office located in the heart of downtown Indianapolis. She helps her clients make smart Airbnb Home investment decisions. She can be reached for consults here.

Rachel Prince

Licensed Broker
F.C. Tucker Company
Indianapolis, IN 46204

Resources:
Airbnb: Airbnb.com
Fortune Builders: Fortunebuilders.com
Than Merill: Thanmerrill.com

 

5 Mistakes That Landlords Make Converting Rentals to Airbnb

5 Mistakes That Landlords Make Converting Rentals to Airbnb

Featured


Indianapolis Real Estate Broker, Rachel Prince

More often then none, I get the call that a client wants to convert their property into an Airbnb home. I first have to ask them what their motives are. After all, Airbnb is not a passive income industry and relies heavily on quality & responsive customer service and hospitality.

Many of these are landlords are renting out the rooms by the week or month. They usually own a slew of properties and some of the homes have even gone into disarray.

The conversion process from landlord to short-term rental host can be quite tricky and not what one is accustomed to. So, if you are a seasoned investor looking to convert a few of your rental properties or deciding whether its worth it to put thousands of dollars to renovate one of them, it would be a good idea to keep the following in mind:

1. RENTING ROOMS ON AIRBNB CAN BE TRICKY
Many landlords make the mistake of thinking that Airbnb is as easy as being a landlord. The reality is that being a landlord is much more passive then the duties of an Airbnb Host.  I often have to remind them that not only do you need to be aware of quick turnover times, you have to offer impeccable service and be available non-stop since Airbnb does not reward lazy hosts. The turnover rate (time from which guests checks-in and out to the next guest) can be daily which requires you to be on call most of the time. The quicker response time an Airbnb host has, the better search visibility a host gets. There is some good news however and that is that there will be NO MORE LEASE WRITING and no more 30 day, 6 month or 1 yr contract-writing. All terms and guidelines are required to be accepted upon signing up for Airbnb for both the host and the guest.

2. YOU CAN’T HALF-ASS AN AIRBNB HOME
If you’re really considering this, then you need to know that you must use your full ass to list on Airbnb and never half your ass. The biggest mistake of landlords is to think that your mistakes won’t be discovered. On the contrary, everyone is watching. If you make a mistake, say leave a hair, run out of toilet paper, forget to empty the trash, a guest could notice and interpret that as you not caring for your rental. When a guest leaves a review it is considered “their opinion”, so Airbnb does not make it easy to remove these. Remember, an Airbnb home is like a boutique hotel and 5 star-service is generally expected, if you want to nail 5 stars every time and get great reviews (which equal more visibility and higher nightly rate and more bookings for your rental).

3. YOU CAN’T BE CHEAP ON RENOVATIONS
Never go the cheap route. Many landlords make the mistake of defaulting to what they are used to, cheaper products that can be replaced more frequently. But instead of thinking in this way, its best to think of giving your property a more expensive appeal. In the end this strategy may cost you a few more up front, but will allow you to be able to ask for slightly higher nightly rates. Instead of renovating cheaply with formica, get granite. Instead of carpet or vinyl, invest in wood or laminate that will last longer.

4. NO, YOU CAN’T LEAVE YOUR EXTRA CARS IN THE DRIVEWAY
Your entire property should be available for the guests and look like it is too. It a mistake for a landlord to think that he/she can leave their possessions all over the property. You really need to clean out the garage, clean up the porch and backyard. Also clean out the drawers and get rid of extra junk. Most Airbnb guests love the hotel feel, but with the amenities that you are offering in your home such as a the kitchen, living room, entertaining area, porch and grill space in the backyard. A sparse, minimal home is always a good idea for an Airbnb home. If you are thinking of leaving an office on-site, think again. The time & energy you will waste asking your guests for permission to stop by for something you need in your office will just not be worth it the end. Additionally, you risk interfering with a guest’s privacy and again this could lead to a poor review.

5. YOU CAN’T LEAVE YOUR PHONE FOR A MINUTE
Nope! Not possible. You won’t be able to leave your phone for very long. In fact, if you run an Airbnb home you will need to be able to answer your phone, or a text, at most hours of the day and night, 7 days a week. Many landlords make the mistake of offering business hours to tenants,  but unless you automate this one piece for your Airbnb listing with a manager or an online service, you will need to be able to communicate quickly with guests.

Are you an Investor or Home Buyer looking for a solution to your real estate property? If so, Join my Airbnb House Hackers club FREE. Find out my Airbnb House Hacks HERE.

Do you have an Airbnb Hack that you have used? Tell us about it!!  Email: info @ rentalpreneur . com

About the Author:

Rachel Prince is a licensed real estate broker living in Indianapolis, Indiana. Rachel works as an Associate Broker for F.C. Tucker & Company at the downtown Mass. Ave. office located in the heart of downtown Indianapolis. She helps her clients make smart Airbnb Home investment decisions. She can be reached for consults here.

Rachel Prince

Licensed Broker
F.C. Tucker Company
Indianapolis, IN 46204

Making Money with Airbnb Investment Homes

Making Money with Airbnb Investment Homes

Featured


 

Indianapolis Real Estate Broker, Rachel Prince

Airbnb is a killer investment strategy for some of you out there. It can really beef up some of those under-performing real estate assets.

Whether you are a seasoned investor looking to convert a few centrally located rental properties, or you own a 2nd home that may never see returns, Airbnb is a great solution for many.

The earning power of an Airbnb home is incredible and can likely offset the entire amount of your mortgage, not just for a month or two, but for an entire year and then some! Here are the 3 most common ways my clients see bigger ROI’s on their investment properties:

1. ROOM RENTALS:
Many landlords that I come across are sick and tired of having their properties ruined by irresponsible tenants. Instead of renting out rooms to tenants who have less of an interest in protecting your asset, consider the ideal Airbnb guest who is held accountable for their stay. Each Airbnb guest is reviewed by you, the host, and vice versa after their stay. These reviews are available to the public via the Airbnb.com app & website. Uses reviews go both ways to create a convenient and safe checks and balances system for both parties. Essentially, reviews encourage both parties to uphold a standard of excellence.

2. ENTIRE HOME:
Airbnb makes for one of the most ingenious ways to earn extra money on an asset and essentially offset an entire mortgage for each individual property rented. Often times Airbnb  properties are seeing double, if not triple or quadruple returns. Generating Airbnb income is considered active income versus passive. It will require you to put in some hours to keep it going but in many cases its totally worth it. Airbnb requires your guests put down a minimal deposit as a safe guard for any minor damages and also provides an extra 1 million in automatic liability insurance for hosts.

3. PRIMARY HOMES:
What could be better then earning extra income off an idle asset?! I still cannot find anything that beats it! Many homeowners have an extra room, a walk-out basement or carriage house that could be short-term rented for a small fortune on Airbnb.  The income can be used in so many wonderful ways like paying off annoying debt, student loans or credit cards.  It can also be used to fund a retirement plan tax differed! Empty nesters and baby boomers can re-ignite their zest for life by starting a fun side home rental business. As I tell my clients, anyone can do this if they like people and don’t mind putting in the time and care to host guests and turn strangers into friends.

Are you an Investor, Landlord, Host, or Home Buyer looking for a solution to your real estate property? If so, Consider joining my Airbnb House Hacking Tribe FREE. Find out my Airbnb House Hacks HERE.

About the Author:

Rachel Prince is a licensed real estate broker living in Indianapolis, Indiana. Rachel works as an Associate Broker for F.C. Tucker & Company at the downtown Mass. Ave. office located in the heart of downtown Indianapolis. She helps her clients make smart Airbnb Home investment decisions. She can be reached for consults here.

Rachel Prince

Licensed Broker
F.C. Tucker Company
Indianapolis, IN 46204

Travel Free on Airbnb! [Traveling is Healthy]

Travel Free on Airbnb! [Traveling is Healthy]

Featured


Airbnb guests are a great excuse to go take a free vacay!!!

Last week I booked some Airbnb guests at the Indy Zen Den and used the time to go visit some friends in Chicago.

I hadn’t been back to Chi-town in years! It’s only a 3 hour drive from Indianapolis so I figured, why not?!

Along the way, I just had to soak up a piece of history, so I stopped in Lafayette, IN where the original Purdue University-Hoosiers come from.  Cute houses and spring flowers lined the streets, along with the cutest main street and state capitol.

I booked an incredible Airbnb apartment in the heart of Chicago’s Gold Coast with some referral credit that I had from Airbnb. (learn what this is) I went restaurant hopping in the rain with a friend and ended up here at the famous Carmines off State Street. The next morning I took a walk down the street to the famous Drake Hotel and ate breakfast there.

The next day, my friend drove us up Lake Shore Drive to Lake Forest where we went on our own architectural gem adventure as per an article we saw in Architectural Digest:
1. Market Square and first ever outdoor planned mall designed by Howard Van Doren Shaw
2. Lunch at the Deer Path Inn (where I ate most delicious handmade ravioli I’ve ever had)
3. David Adler’s mansion
4. Lake Forest Library with giant oak doorways and a domed rotunda

The day after that, I was leaving what I call Sun-Shy-town and happened to chuckle as I caught these photos of the sun finally emerging just when I drove out of Chicago which borders Indiana.

All in all it was a refreshing weekend getaway. Traveling is healthy!

Are you an Investor, Landlord, Host, or Home Buyer looking for a solution to your real estate property? If so, Consider joining my Airbnb House Hacking Tribe FREE. Find out my Airbnb House Hacks HERE.

In Appreciation,

Rachel

http://rentalpreneur.com

My friends over at Positive Health Wellness wrote this great blog with 8 top reasons why it’s healthy to travel. Check it out here:
https://www.positivehealthwellness.com/fitness/8-reasons-traveling-good-health/

Airbnb Hosting: Tips To Get 5 Star Reviews

Airbnb Hosting: Tips To Get 5 Star Reviews

Featured


AIRBNB HOUSE HACKS!

Are you an Investor, Landlord, Airbnb Host, or Home Buyer looking for a solution to your real estate property? If so, Consider joining my Airbnb House Hacking Tribe FREE. Find out my Airbnb House Hacks HERE.

Learn what it takes to get 5 STAR REVIEWS every time!! Airbnb hosting tips from Rachel on this incredible 5 Star Santa Fe Home.

Cheers to Airbnb!
Join the Short-Term Rental Revolution!
—————————————-­­­­­­­­—————————-
► SUBSCRIBE to Rentalpreneur
http://youtube.com/RachelPrinceRental…
—————————————-­­­­­­­­—————————-
TODAY’S FEATURED LISTING:
► https://www.airbnb.com/rooms/3808281
► WATCH LAST: AIRBNB OPEN: https://youtu.be/eA4KdDu0vKs

►Host Income Calculator: http://rentalpreneur.com/airbnb-home
—————————————-­­­­­­­­—————————-
Claim $35 in Travel Credit on Airbnb for your FIRST TRIP
►USE THIS LINK: http://www.airbnb.com/c/rprince1
Claim $50-$200 CASH on Airbnb for HOSTING
►USE THIS LINK: http://www.airbnb.com/r/rprince1
—————————————­­­­­­­­—————————-
WATCH MY FULL FREE WEBINAR ON HOW TO BE A HOST ON AIRBNB & HOW TO TURN YOUR HOME INTO AN INCOME MACHINE
►WEBSITE: http://rentalpreneur.com
OPTIMIZE YOUR LISTING WITH MY PERSONAL REVIEW
►WEBSITE: http://rentalpreneur.com/optimize
—————————————-­­­­­­­­—————————-
Follow us on social media:
► Twitter • http://twitter.com/Rentalpreneur
► Facebook • http://facebook.com/Rentalpreneur
► Instagram • http://instagram.com/Rentalpreneur
► BLOG • http://rentalpreneur.net (BLOG)
—————————————-­­­­­­­­—————————-

MY BOOK: “5 STAR MENTALITY
Guide to a Successful and Profitable Home Rental Business
►Amazon Kindle • https://amzn.com/B01K5CJ7UG
►Book Video • https://youtu.be/Qx8WRfwasyw

►Music • bensound.com
►Please consult an expert (tax or lawyer) before any real estate purchase. Rachel Prince is not a lawyer or tax accountant.
Category
Howto & Style
License
Creative Commons Attribution license (reuse allowed)

4 Ways Make Money on Someone Else’s Airbnb Investment

4 Ways Make Money on Someone Else’s Airbnb Investment

Featured


4 Ways Make Money on Someone Else’s Airbnb Investment
by Rachel Prince, Airbnb Real Estate Investing Educator

There is a lid for every pot. Just like each investor, whether a private investor, a friend or family member, or a private money lender, will have specific requirements for how they want you to put their money to work and pay them back. Furthermore, its up to you to understand how to structure your deals so that you get what you want out of it too. I believe being able to articulate a clear vision for how well you can leverage an investors cash on their behalf, is one of the first steps to attracting in a strong investor pool. Knowing what you will and will not settle for, plus what reasonable industry standards are, versus what is simply greedy, will push out those who are not serious or those who you don’t want to work with in the first place. Here are the 4 main basic areas that can help you structure your payments on deals.

1. Success Fee/Acquisition Fee: “SECURE & LOCK-UP”
Your “Success Fee,” is the fee for your time and effort to put together deals, after success and paid at closing. Your duties can also include researching properties, setting up LLC’s and/or Land Trusts, and locking up deals / getting them under contract and being the point person to acquire the asset(s). As with some investors, you may need to find the property first, show them the proforma each time and in some cases, get the home under contract. Always negotiate your Success Fee before you lock it up with them. You will generally be paid out at the closing day of the property. You may also be able to secure an upfront “Acquisition Fee”, whereby you are paid something upfront by the fund or investor to lock-in your services and pay for your role to set-up and manage the und/asset.

2. Real Estate Commission: “MAXIMIZE YOUR SALARY”
If you want to specialize in a certain area or city, it may be worth your while to get your real estate license. Not only will learning how to Broker deals assist you with your investment knowledge and proficiency, it will improve your ability to quickly lock up deals and also earn the transaction commission. Additionally, if you are a broker you will be able to secure a referral fees as per NAR, the National Association of Real Estate Brokers. Referral fees vary and are generally 25% of the buyers commission although this fee may be structured and negotiated with the other broker before the purchase contract is signed. Also, if you are turning around and flipping the house immediately or selling the house down the road, you can also have it in your agreement to list the home and get paid the broker’s seller’s commission.

3. Management Role:  “AIRBNB INCOME or LONG TERM”
Your position managing the properties whether Airbnb or Long term renters, is vital to the continued success of the investment. You can include a 20-30% property management fee short-term rentals. You can also include an optional set-up fee to furnish, set-up listing, etc.

4. Partner Return Rates – “NEGOTIATE WITH FAIRNESS NOT GREED”
The Partner Return Rates or IRR takes into consideration total cash, and total equity at the close of the fund. The cycle of the fund can vary on a real estate deal from months for “flips” and years for “buy and holds”. Depending on your investor portfolio set-up your return or payout comes typically after the investor is paid out aka, Preferred Rate of Return or Hurdle Rate. This can be anywhere from 10-14%. The investor may also have an annual return or payout for cash flow distributions during the term of the fund.

Example:
1. Preferred Rate: = 12%
2. Projected IRR = 18%
3. Partner Split 75/25

Waterfall example:

1. Investor gets 100% capital back.
2. Investor gets Preferred of 12% capital back
3. Investor gets Preferred 12% Annual Return of Remaining Profit
4. Investor Gets 75% (This extra split on profit is how we got the initial 18% IRR. Sponsor (YOU) get 25%

Are you an Investor, Landlord, Host, or Home Buyer looking for a solution to your real estate property? If so, Consider joining my Airbnb House Hacking Tribe FREE. Find out my Airbnb House Hacks HERE.

Rachel Prince Airbnb Real Estate Investing CONTACT
Contributing Writer: Andy Thoms, Investment Expert http://EmeraldQuarters.com