How I Make A Fortune On Airbnb Owning No Property | DONT BUY A HOME FOR AIRBNB IN 2019
Articles,  Blog

How I Make A Fortune On Airbnb Owning No Property | DONT BUY A HOME FOR AIRBNB IN 2019


welcome back Airbnb family today we’re
gonna talk about a discussion that has been passed around in my social circle a
lately which is whether it’s better to go for equity or cash flow when buying
your first Airbnb home now I have a very strong opinion on this and I’m sure
plenty of you do on either side of the fence but mine is gonna mess with you
here my opinion.. Don’t buy a home! don’t buy a single property if you want to be
an Airbnb host and there’s a very good reason for this we’re gonna jump right
into it it’s a very simple math problem if you want to have multiple Airbnb
properties and be successful as a business don’t buy your home so here we
go let’s say you are buying your first investment property you need 20% down
because it’s a non FHA you’re not gonna live there you’re gonna run out the
entire place on Airbnb which means since you’re not living there it’s an
investment property 20% down so let’s say you buy a $250,000 home with two
bedrooms and your 50,000 down you also need to upgrade it possibly and furnish
it so you’re looking at potentially $70,000 a month before you’re live on
air BnB now that two-bedroom property will profit you maybe $5,000 and that is
including your equity because you’ll have to pay property taxes utilities pay
for your cleaner etc and in this example the other person’s gonna pay for their
cleaners too so let’s keep it even so you’re gonna make maybe sixty two to
sixty five hundred dollars a month on your two-bedroom and your profit after
all the costs will be five thousand dollars including your equity and so
seventy thousand and five thousand dollars a month out okay that’s the
homeowner side now I rent my property i furnish them and then I short-term
rent them now let me tell you what I do with my seventy thousand dollars in this
situation I get ten properties right it cost me about seven thousand dollars per
that includes my cost of getting my first lease the furniture everything
okay so at ten properties my rents are probably about fifteen
hundred dollars in average with my utility costs sixteen fifty I don’t have
to pay property taxes everything’s worked into the of course into the rent
and I don’t have to worry about insuring my my appliances the landlord has to fix
the plan if they break things like that so 1650
and costs plus my cleaner costs I make about three thousand dollars a month of
my property so let’s say just you know conservatively I make nine hundred
dollars per unit so ten units that’s nine thousand dollars a month where
homeowner with their seventy thousand dollars is now making five thousand per
month so you can see I’m already ahead by four grand a month but it doesn’t
even end there so the cool thing about doing rentals is you can grow in smaller
increments the moment I have another seven grand I can put another property
and have eleven right so first month I make nine grand I can put seven thousand
towards another property I make another grand my second month I can put another
property down my third month I make another nine grand I can get almost two
more properties my third month so by month and a month three I’m looking at
about fourteen properties which is outstanding the person who owns a home
they need to actually make profit for fourteen months before they have seventy
thousand dollars again before they can get their second property now some of
you homeowners are gonna say well I gain valuation of my property because it’s
going to appreciate in value by like three percent on average a year well
let’s factor that in so let’s say that your $250,000 home makes 3% a year
you’re looking at about seven thousand dollars a year in appreciation so let’s
break that up to like six hundred and fifty dollars a month and appreciation
so you’re making five thousand now let’s add the 650 so you’re making fifty six
fifty per month including your appreciation I’m still making nine I’m
still weaponeer there but let’s talk about housing bubbles right you could
lose money on your property this could actually happen also you could buy a
home in a terrible part of town that’s not good for air B&B which means you own
it you’re gonna have to sell it or turn it into a regular rental property which
is not why we’re here we’re here to make more money than that if I get a property
where I lose money which I’ve done before I just cut the lease right I’ll
even buy it out early if I really want to get out of it fast so at worst case
scenario I’m stuck with a property for a year but it makes me more agile I’m in
I’m out I find the right neighborhoods and I make all my money that way and I
do this completely legally we’re gonna actually cover this in a very recent
like very near future video I’m gonna actually show you the legal process that
I take to pick up all of my leases and homeowners or
property management companies they can’t do anything about it they are stuck with
me at least to the end of the lease so we’re gonna talk about that later and
this is going to be the secret to making your fortune on Airbnb but to keep on
topic here don’t buy your property it’s sluggish it’s slow you need way too much
money to get in initially now you’re money stuck in your property if you have
to turn it into a regular rental which is no fun it’s just not nearly as
profitable and it’s a little harder to manage too because you’re stuck
replacing your own appliances so I don’t if it’s no breaks I’m like hey
maintenance come in fix my stove thank you goodbye and it’s a lot easier for me
to track my expenses too because everything’s kind of rolled into my
lease agreements so if you have any other questions kind of on this topic or
maybe even like just some fast facts on like how to host certain ways if you
have certain problems that you’ve had with guests or you know with your
listings feel free to leave me a comment below I’ll be happy to help you out you
just let me know what you need leave the comment now like this video share it
with your friends and of course if you want more content like this you
subscribe more is coming and I promise you very soon I’m gonna teach you the
legal way that I picked up my 20 properties without owning a single one
so thank you for watching air B&B automated I will see you on the other
side car

88 Comments

  • Stephen Cullen

    I doubt if many landlords in the UK would allow this, and I have no doubt mortgage lenders to those landlords certainly wouldn't!

  • G P

    "Big boy" 🤣 I/we don't know what state or planet you live on, but this idea 💡 or plan of yours is a wet dream… Good luck subletting an apartment/home you don't own….
    please stop ✋ giving false ideas & hopes to ppl… It could really hurt them if "the shit hits the fan" when the apartment/appliances get damaged or break if not normal wear and tear …

  • Feras Twaim

    You forgot to account for the fact that for a homeowner putting 70,000 down, THEY WILL OWN A HOME. An asset, that can be sold when needed.

  • Gerrylynn Mako

    Expenses on Airbnb are different from long term. I do both in Hawaii on the island of Maui. Make money from both. There’s pros and cons to each.

  • Aaliyah Valentino

    Ok.. problem. What it something breaks and you have a slowpoke landlord. You would have to stop and cancel reservations.

  • Jeff Donald

    Too bad it's not possible here in Vancouver, BC with such strict regulations! You can only rent out your primary residence for short-term rentals and if you get caught, which is likely, you get fined $1000 a day. It's times like these I wish I lived in the states.

  • Building Buildercip

    I’ll have to check it out. I’m about to drop just under $20k on my 3bed 3 bath , but I’m going higher end.
    I’m not renting but I bought in cash. I appreciate your logic though.

  • Ahmed Elbially

    Hi Sean, I’m a big fan of you since I’ve seen this video more than a year ago. Almost watching all your videos and contents. Can you please make a video with a detailed breakdown of a realistic listings income you already have ? I live in Houston and looking at the $900 per month income is kinda unrealistic/hard to make with 60% average occupancy rate.

    Thanks for all the information. Keep it up !

  • bbyybda

    We are on the same boat. I made almost the same amount of revenue as you do per month when I had multiples properties at that time, in the same method you mentioned above. It’s a very very profitable business but also risky.

    But now we are facing a lot of problems with the condo rules who are starting to take actions as there are more Airbnb hosts in the building. How do you deal with the property management companies in regards to those rules?

  • Ryan Delaney

    Currently do not have any properties under my belt but I’m creating an LLC in Massachusetts and going all in on this idea. Would love to connect with anyone else just starting up or experienced.

  • The Gabriel Family

    I had a guest dispute once. They seemingly had a party. Messed up the carpets. Airbnb didn't think so. They didn't allow me to use the deposit that I required. How should I have dealt with that? The deposit was inaccessible. Then I found out that my heating bill was $700. I thought they had the windows open the entire time with the heat cranked up. I'm not sure how I should have dealt with that. Also, how to deal with theft and/or damage in general. Airbnb wasn't going to give me market price for the new items that I had just bought that were ruined.

  • john smith

    Also some people may realize he is breaking the lease cintract and refuse to leave forcing an eviction and the law regarding the eviction process from an illegal bnb is murky at best.

  • karma in your face heh

    Wait are you paying 7000$ per month or per year?? Cus if per month, you're only earning 900$ a month from one property that's a huge loss.

  • karma in your face heh

    And subleasing requires proper license. You can't sublease without the homeowners permission.. and if you are subleasing you'd have to pay for the damage

  • Offsure

    I'm a Military Veteran. You inspire me. Please let me know how I can partner with you and make some cash money. Maybe you can get two interested people to team up half and half financially on this rent business.

  • Geo Cyo

    This is such a great video! I had theorized that this would be a good idea several years ago but I couldn't figure out to put it into numbers and what potential pitfalls to take into account but yeah, this was great content!

  • High Frequency Radio

    Thank You for the video. Do not listen to these idiots who do not understand contract law. There is a reason why they are broke.

  • modjo3456

    What is your plan if there is a downturn in the economy and demand goes way down? How do you plan on keeping up with hundreds of leases if the cash flow dries up?

  • Boss Dogg

    Great information bud. I swear some of these people in the comment section are idiots. I own property that I rent out so the main objective is to keep tenants in those properties. Airbnb is awesome bc no matter what the landlord or property owner is getting their 💰. Unless it's in the lease, or state law restriction, Airbnb is fair game… Great videos.. 👍👍

  • Richard

    Do you pay a higher than normal rent to get the owner interested to let you lease the property? And you disclose that you are going to do air bnb?

  • Joyce Cooper

    What about liability insurance ? Can you get insurance to cover renters since you don't own the property?

  • Warren Coquilla

    How to deal with owners or agent if you do this thing? Should i tell them my plan to do with the property? Thanks heaps

  • Rafiu Oluwasina Ganiyu

    Hello, I really enjoyed this video. I would like to know if a non – resident can get into airbnb business/investment.

  • Dominic Manaligod

    Sean thank you for the insight you gave during our local REIA meeting last thursday night. Is there a specific order I need to view your videos? Thanks.

  • Jeffery Hinchey

    You are leveraging fully which makes sense, this is a leverage world, in for a penny, get in for a pound.

  • Joe Scaparra

    Recently bought a duplex in Bryan TX  and I am thinking of making one side a short term rental. I have zero experience in doing this so I thought I would ask for advice from those that have some experience.

    The unit is totally rehabbed with new floors, paint, fixtures, lights, ceiling fans, granite countertops, new windows, bathtub and tile in shower. It is a 2 bedroom 1 bath and I have yet to furnish the place. It does have a washer dryer and all new kitchen appliances.  

    I won't manage it myself looking at a couple of companies that take care of all management, they charge between 10-20% of gross revenue. 

    Questions:

    Does anyone have any recommendations for property management for this short term rental?
    How should I configure bedrooms…..King, Queen, Full or Twin beds.
    On average what should I anticipate for occupancy rates?
    What are good daily rates for both event type dates….ie SEC Football Weekends, Parents Day, Graduation dates etc and just your run of the mill days?

    I plan on using this property sparingly myself. 
    I am sure I am leaving out some obvious questions so don't hesitate to add to this discussion.

  • Lorna Debbie

    I would absolutely love to HOST you and yours: @t Please visit and stay in a cozy peaceful space after the days activities.

  • Vin ef

    Hi, is starting an airbnb management better to do by yourself or partnership with other people? Is it possible to do the main work solo? Thank you

  • Ary Masters

    What is not accounted for here is the fact that with a rental, 100% of your monthly payment is never earned back, where as if you own the home, your deposit and a portion of your monthly payments is earned back whenever you sell the home + equity made after appreciation. Lastly, 20% is NOT required on most conventional loans. You are able to do as low as 3.5% on conventional loans. 20% is only necessary if you want to eliminate the mortgage insurance.

  • aksek hiddelll

    because you are a money grubbing piece of shite that is ruinning life for everyone else, you are a scumbag

  • Fox

    Ima trucker if I buy a duplex with VA loan which means it can’t be assumed under an LLC so basically rental income won’t be taxed or even known can I long term rent one side and Airbnb my side while I’m away??? Also my city Orlando Airbnb laws says I have to live on the other side of the duplex that I am short term renting ??? (Loophole??)

  • Leea Robinson

    Do you have the permission of the landlord to do that or do you just do it without asking.

    Sorry that's illegal 🚫 real estate agent

  • Tim Vandentoorn

    Who would allow another investor/tenant to sublease their property? This is a great idea in theory, but you should mentioning some level of due diligence, before blindly following this advice. While I sign and screen one tenant a year for my property, you move people in and out weekly and have a tremendous amount of overhead managing that. Additionally, if you report that your stove is not working as a tenant, I will be there in a day or two. If you EVER let a stove go on a Airbnb for two days before repair, your going hammered with negative reviews which is going to kill your business. Great ideas though…but there is more to it than the numbers you mentioned.

  • Maxwell Smart_086

    Sean – you gotta work on your outfit: 1. Only dead man wear square 2. A ties pocket square has to be in a different color than the tie (I know the cheap salesmen like to sell it to you in a pair…) 3. Men with style don´t use tie clips at all (that´s for clerks or jerks) 4. IF you don´t wear Versace – wild tie patterns are OUT 5. Shave – you look like a truck driver in a suit. Good luck – next try. 😉

  • k a

    I’m a landlord and if you spoke to me like that after possibly one of your hotel guest broke a stove I’d tell you to do one and fix it yourself.

  • Preston Davis

    I've heard recently that some areas are now requiring a permit to list short term rentals. Does anyone know if this applies in Atlanta?

  • Kane delars

    Thanks for the video, I list on Airbnb and on the app Musjroom, which is a great alternative for renting and booking rooms and lastminute couches. But lately im not satisfied with Airbnb customer service and the payouts in the Netherlands!

  • Adrian Niculescu

    Hey Airbnb automated, my name is Marius and need some help with an ideea of mine… Can you please give me an advice?

    Is it possible for me to contact the owners of some cottages and propose them a deal in which I promote their property on this rental platform in exchange for a percentage?
    Or something like that?
    Thank you for answer.

  • kmusic

    Hahaah.. this guy is such a bullshiter….All of the apartments and rentals do not allow airbnb or any type of subleasing…This would work if you are able to find landlords or companies that are clueless…..

  • Max Maximus

    As stated below, you are probably letting out on Air Bnb without Landlord knowledge or consent. In the UK most tenancy agreements have a condition that forbids sub-letting, so its a dangerous game you are playing, which might work in the short term, but you cannot build a sustainable long term business from this!!!

  • N SR

    Actually a pretty smart idea (sub leading properties to Airbnb)
    -no property tax
    -no maintenance (property manager)
    -less money down

  • A Immortals Legacy

    This may seem petty.. but you included the appreciation and not the money that is being paid toward the principal.

  • Jiajun Fan

    Doing business in a smart way is great, but it'd be fine if you could just keep your business model to yourself, now you are sharing it with everybody. Once they all do business in your way, more and more housings will go to short-term rental, less and less rental stock will be on market, harder for regular tenants to find places.

Leave a Reply

Your email address will not be published. Required fields are marked *