Short-Term Rentals on a Budget with John & Wynde Williams

October 20, 2021 melissa Real Estate Comments Off on Short-Term Rentals on a Budget with John & Wynde Williams

Short-Term Rentals on a Budget with John & Wynde Williams

Last week, we ended on a bit of a cliffhanger, when John and Wynde Williams suddenly realized that they could do the basement Airbnb rental on their fix-and-flip disaster. Today, we’re going to pull you out of that cliff.

For those of you who have no idea who these two are, John and Wynde are short-term rental specialists. In this article, we’re going to get into what happened after turning their long-term rental into a short-term one and how you could get started without actually owning a property. See? You don’t really need to have a new property just to get started. Sometimes, hospitality can be your business, and not necessarily “real estate”.

The points below are from the fifteenth episode of the Real Estate JAM, where John and Wynde talk about their first dip into real estate, figuring out how Airbnb worked, their model of focusing on the customer, the management side of short-term rentals, and COVID’s impact on the business. Hop on the short-term rental train before it leaves! Tune in on the full episode on YouTube, Spotify, or Apple Podcasts.


 

Renting More Basements

John and Wynde looked at the difference between their two rentals. They WERE getting a nice paycheck from the fix-and-flip that turned into a rental. After property management, they were getting $870 a month, which is great for a single-family home. But, not-so-great if you consider that they spent over $110,000 on that unit! What about the Airbnb rental for their basement? When they did the numbers, it was $1200 a month with only $2000 spent on making it better!

This was the “Aha” moment they had. More short-term rental money was the move! But the next problem was, “How do we get more basements?” Do you have to buy more property? Yes, but also no.

Instead of buying properties. You can rent literal basements and use those instead!

 

An Affordable Gateway to the Short-Term Rental Industry

Many people think that you’ve got to have a ton of capital to get into short-term rentals. But not necessarily. Private money, bank loans, or other sources of massive funds are awesome, but you won’t NEED them for Airbnb.

Take this comparison as an example. If you’re buying a property (let’s say one that’s valued at $100,000), you might have to put $20,000 down on it, then spend some more just to furnish the property. When you lease a property, the only capital you’ll need is a security deposit and first month’s rent, which may more or less be $12,000. Though it IS better to own a property (tax benefits, appreciation, etc.) and that the cash flow is MUCH MORE, not all people can get one. That’s why this solution exists.

If you’re aiming to get into the real estate space, this method can serve as an excellent gateway to it. You can put some of the earnings aside until you can afford that downpayment from earlier.

 

Why Would People Let You Rent Their Basements?

At this point, it should be obvious that it’s not only basements that you can rent, but entire houses too. There are landlords in the long-term rental scene that aren’t so excited about Airbnb and its “colleagues”, but that’s where you come in. Vacancy is a real thing in the entire renting industry. These landlords or homeowners want steady income and quality tenants that aren’t going to mess up the property. These two things are what you can provide them.

Whether or not the landlords or homeowners you talk to hate short-term rentals, you are a solution for their problems. You can take advantage of that by being their “tenant” (which generates them income), and listing their unit on Airbnb or similar platforms (which provides quality tenants)! It’s in their best interests to let you do it, and it’s also in your best interests to do your best to find those bookings and earn money.

How do you convince these landlords and homeowners? That’s something for next week!

But, if you’re too curious to wait, you can listen to the full episode on YouTube, Spotify, or Apple Podcasts.

 

Outline of the Episode:

  • [01:34] Getting into real estate, becoming “accidental landlords”.
  • [03:31] Discovering Airbnb. The second guest stayed for three months! How much did they get for the first few months?
  • [08:49] John and Wynde’s model for the business. It all starts with the customer!
  • [12:06] You can do short-term rentals WITHOUT owning the property! You can “own more basements”.
  • [16:53] The proper mindset to equip when talking to a landlord. What do you do when you get rejected? What if they’re hesitant about Airbnb?
  • [23:22] The management side of doing short-term rentals.
  • [29:36] The shift of focus to a local and regional market versus an international one (due to COVID). You influence and network are going to be crucial here!
  • [31:29] The impact of COVID to reservations and how they came back around. Even if people “ban” short-term rentals, people are still going to need a place to stay.

 

Resources:

 

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