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My Friends All Laughed At Me When I Told Them This Strategy…But Then I Showed Them The Check

by Jimmy Moncrief on April 2, 2014 · 21 comments

  
Unique Strategies

Have you ever told a friend, spouse, or work colleague a business idea and they laughed hysterically at you?

If so, join my club!

I basically have at least 2 business ideas a day.  I used to tell my wife all of them to get her insight.  Well…..after 12 years of marriage she was exhausted with all of my ideas.  Some worked great (and paid for some real estate and nice vacations) others….not so much.

Here’s an example of one of those nice vacations…

Brittany + Jimmy | A Bavarian Adventure from Limestone Films on Vimeo.

If you are reading this blog there is a high probability you are an entrepreneur and have this problem as well.

So my wife gave me a rule that has been very helpful in keeping our marriage together.

This rule applies to all “business ideas” I have.

Here is the rule: I can’t tell my wife the business idea, until it starts generating revenue. 

It’s a great rule, because no matter how awesome the idea is, it takes work on my part for the idea to start generating revenue.

Anyway, I wanted to share a unique story that just happened with one of my “ideas” that everybody laughed at, until I told them how much money I was going to make.

For a backstory, I used to underwrite and finance hotels.  Interestingly enough, several years ago, Chattanooga, TN had the number one hotel market in the country with an average occupancy greater than 110%!

I’m also a triathlete and competed in an Ironman several years ago.

Ok, Jimmy how is this related?

Well, Ironman announced they were coming to Chattanooga about 6 months ago.  The race sold out in 9 seconds.  I knew with around 5,000 extra people in Chattanooga, in our very busy fall-travel season there was no way everyone was going to get a hotel room.

The Idea: Rent my House Out For The Week.

We are very fortunate to live only about half a mile from the river.  Additionally, the race passes by our house twice.

Now I had to decide exactly how I was going to rent my house out..

There are several ways to rent your house: Craigslist, VRBO, AirBnB, etc.

Craigslist

To be honest, I’m starting to hate craigslist.  I know that at least 10 people are going to cuss-me out in the comments for saying that.  But for every new thing I try to sell there, I get more and more SPAM.  Additionally, the quality of the actual potential customers keeps getting lower.

VRBO

I’ve used VRBO.com as a customer for several years.  However, it’s pretty ghetto and hard to use as an owner.

AirBNB

This is the option I chose.  The site is gorgeous and fun to use.  I also love the founders story.

Related: The Formula for Building Wealth and Massive Cash Flow in Real Estate Investing

Setting It All Up

It was super easy to get started with AirBNB.com

Since I was just testing this anyway, I chose a pretty high price to rent my whole house and I chose a 7 day minimum.  I took a ghetto google-earth screenshot of my house and within 10 minutes I had my house listed.

To be completely honest, I forgot about the listing.  But on Christmas Eve, I got a text and an email from AirBNB from someone requesting to stay at my casa!  I checked out their profile and then did the most important thing: I told my wife!

We were with her family for a “Happy Birthday Jesus” party and everyone started crying/laughing that Brittany (my wife) didn’t even know about it.  Luckily for me, everybody in her family owns their own business and loved the idea and my entrepreneurial spirit.  Brittany was on-board so I accepted.

A couple of months later someone booked it again for a family reunion!  They requested an exception to my 7-night minimum since they only needed 4-nights and it was during the week.  I thought that was acceptable considering I could still have my weekends at my house.

So this week, I used my Starwood points to stay at a local hotel for free.  My wife and kids get to enjoy downtown all day and we use the hotel pool at night.  Overall, it’s been a ton of fun!

photo 2

This is me and my family with our good friends that we invited to hang-with us at the indoor hotel pool.  Pretty fun considering it was 35 degrees outside!

Of-course, it’s extra fun when you get a nice direct deposit that more than covers your mortgage for the month and then some extra while you hung-out at a hotel for 4 nights.

Before we end I want to address two issues that literally everyone of our friends have asked:

1. What are you going to do while someone stays at your house? Go on vacation!  This week was a little bit of an exception, but we simply plan on going on a vacation every-time this happens, which I’m sure will only be 1 or 2 times a year.

2. What are you going to do with your valuables?  Well, part of the benefit of valuing experiences versus things is we don’t have much anyway.  Literally, we don’t have a T.V.  The rest of the stuff, we just took to a friends house.

The best thing for me was that I could control who stayed there and who didn’t.  If they don’t have a good review or I can’t vet them, they aren’t staying at our house.

Interestingly enough a good friend of mine who just moved to Fort Collins, Colorado is using AirBnB to pay for his mortgage. He has an extra guest room with an outside entrance and he has people staying with his family at his house several weeks out of the month.

This is proof of how well this strategy worked for me:

airbnb

Summary

I strongly want you to consider listing your house for some extra money.  A lot of people let people stay in an extra room.  For me, that’s too much work for too little cash.  However, a lot of my friends are paying their mortgage this way.

If you have any questions or comments – LEAVE ME A COMMENT!

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{ 21 comments… read them below or add one }

Sharon Tzib April 2, 2014 at 10:49 am

Haha, I’ve heard VRBO called a lot of things, but never “ghetto!” What didn’t you like about them? I’ve set up rentals in both VRBO & AirBNB, and frankly found VRBO much easier.

Do you have tenants sign a rental agreement and leave a security deposit? Also, what kind of advance notice do you require for a booking, as I’m sure you can’t have them wanting to stay the next day. Thanks, Jimmy!

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Jimmy April 6, 2014 at 7:23 pm

Sharon

Great questions! Airbnb has everything customizable but I use their boiler-plate stuff. However, I recently changed the reservation notice so if they cancel within 1 month I get 50% of the total rent.

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Tim Hawkins April 2, 2014 at 10:50 am

@Author — You failed to include the tax consequences to renting your home as follows:
If the property is “used as a home” and you rent it out fewer than 15 days per year, you do not have to report the rental income. (Publication 527, p3)

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Jimmy April 6, 2014 at 7:22 pm

That’s because I didn’t want to put my readers to sleep! :-)

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Galya April 2, 2014 at 12:46 pm

Do you let the guests use your car?

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Jimmy April 6, 2014 at 7:13 pm

No – but I would for the right price!

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Joe Mercer April 2, 2014 at 2:41 pm

Washington state does not have income tax for SFH rentals unless it is done for shorter time periods (15 days or less). Then it is considered income tax as a hotel, so to speak.

How do you “vet” your clientele?

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Jimmy April 6, 2014 at 7:21 pm

Well – airbnb has a rating system that looks pretty legit – so I use that.

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Sharon Vornholt April 2, 2014 at 7:34 pm

Great story Jimmy!

Sharon

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Jimmy April 6, 2014 at 7:17 pm

Thanks Sharon! You need to do this for the KY Derby!

I will be your first client!

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Jonna Weber April 3, 2014 at 12:00 am

Side note: Loved the vow renewal video! Beautiful footage! I think renting out your place 1-2 weeks a year (under the 15 days) is a cool idea! You never know what is going to work until you put it out there and try it. .

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Patrick McMahon April 3, 2014 at 10:30 am

That video was intense. I thought it was a Hallmark commercial or something — very professional. Inspired me — my 10 year anniversary is in a couple of years, but I better start planning now!

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Jimmy April 6, 2014 at 7:20 pm

Thanks for the kind words!

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Shari Posey April 3, 2014 at 9:35 am

We used to do vacation rentals but it was a bit of a hassle trying to coordinate vacation times. I like this idea and then to use points to stay at a nearby hotel for free. (I kind of hate to use my points to stay locally though.)

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Jimmy April 6, 2014 at 7:17 pm

Agreed – thats why I have the 7-night minimum. It’s worth the hastle!

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Chris April 3, 2014 at 12:51 pm

My wife and I did this exact same thing when the Democratic National Convention came to Charlotte. We rented out our entire house through AirBnB which we had been using previously just to rent out a spare room from time to time. One week paid for over a months worth of mortgage plus when they left we were greeted with a fridge filled with extra food and a few extra bottles of wine that they didn’t want to fly home with. It was a fantastic experience for all.

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Jimmy April 6, 2014 at 7:18 pm

Awesome Chris!

Thanks for posting!

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Isaac April 3, 2014 at 4:22 pm

I can’t tell you how close to home this struck… I just got into vacation rentals (using AirBNB of course) and I will NEVER GO BACK TO REGULAR RENTALS again! Did I stress that strongly enough? ;)

I have rented my personal residence twice now, but that is just to fund vacations. IF you are going out of town anyway, why not get some extra cash, right? Just take a sizable damage deposit and line up the maid to come before you get back.

The real money is renting “vacation” units. I live in New Orleans, so that helps, but I’m sure it would work great anywhere that got lots of tourists. If there is interest, maybe I will write an article some day.

Literally looking into 1031 exchanging a regular rental for a vacation rental now when I came across this posting. :)

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Jimmy April 6, 2014 at 7:18 pm

Isaac – keep me posted. I want to hear more. What areas are you looking at buying into?

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Denny Robert April 4, 2014 at 2:29 am

I also hate using VRBO. AirBnB is just so much more streamlined for a service.

My wife and I traveled China for a year, and rented our house out on AirBnB while we were gone. It covered all of our expenses and some repairs with no problems. I loved it.

Just recently I had a tenant leave a rental, and my mom was wanting a place to be able to come and go from here in Phoenix. I decided to try vacation renting that place. So far the first two months have been enough to cover the mortgage on the whole triplex plus utilities. I’m sure it will be slow during the summer, but its working for me.

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Jimmy April 6, 2014 at 7:19 pm

Denny – this is awesome!

I would love to go to Asia for a year. What an experience!

Have you been to Bali? That’s my favorite place over there.

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