A few summers ago, I was fortunate enough to attend the SF Bay Summit, hosted by fellow BiggerPockets member J. Martin in Oakland, Calif. Although I was there to talk about note investing and meet new people, I also came home with some other interesting takeaways.
It was hard not to, as there were so many great presenters, such as Nav Athwal, Kimberly Smith, Chris Clothier, and too many others to list.
It’s great to be able to travel and speak on different wealth-building strategies, especially since I can see what others are doing elsewhere, helping me to gain a pulse on what’s happening with real estate investing in different parts of the country. When I hear so many new interesting strategies at once or in such close proximity, some ideas stick and others fall by the wayside, possibly popping up at later times in my career or even daily life.
Things that stuck from this meeting included seeing Nav Athwal of RealtyShares endorsing the use of new technologies in your business—something I took note of, as we are always looking for new efficiencies in our day-to-day operations. Kimberly Smith of Corporate Housing by Owner talked about furnished corporate rental properties and the benefits of connecting them with executive renters. As our business improves, we’ve started to look at similar corporate space for certain aspects of our company.
Chris Clothier of Memphis Invest talked about out-of-state turnkey property investing, which is a strategy many passive investors we work with enjoy. Just like with re-performing notes, it’s the idea of simply “turning a key” to invest and having property in multiple markets that appeals to them.
Even bumping into a fellow BiggerPockets member, Al Williamson of LeadingLandlord—who I was on a panel with at a past summit and who is an expert in landlording Airbnb rentals—got me thinking of a new strategy. All this talk of using new technology to employ passive or semi-passive investing started to make sense to me synergistically.
They say to make a sale, a prospect needs as many as seven touches before they take action. I don’t know what number I’m at, but seeing these speakers at that event (along with some other timely situations) caused me to re-evaluate how I both live and travel as an investor.
Although Airbnb is anything but new, it was interesting to hear how people were utilizing this tool—not only as renters or as travelers but also for their real estate investing.
Related: With the First Airbnb Landlord Conviction, Should Vacation Owners Be Worried?
My youngest son (a Millennial) actually got me into Airbnb pretty recently, since he uses it to stay wherever he’s traveling. He’s always trying to show me how nice the places are and how much money he saved himself by staying in these places versus a typical hotel.
But of course, I can’t only listen to my son! He’s a Millennial! What does he know?
It wasn’t until that final straw of a consultant of mine coming to town that I finally realized the potential benefits as an investor.
Business Meeting via Airbnb
On a fairly regular basis, one of my consultants flies into Philadelphia from Atlanta and stays in a nearby hotel close to my office. The problem is it’s hard to get a decent hotel without paying at least $200 to $300 a night or more.
This year, due to the growth of our staff, our conference room is always busy, too, so we would have to lease nearby meeting space to the tune of $40/hour for two or more days. As you can see, the hotel and meeting space alone are easily costing us north of $1,000. And since my firm covers these expenses, we were really hoping to find a better way.
So, my son says, “Dad, let’s try to find an Airbnb. If we find one big enough, our consultant can stay there, and we can hold our meetings there, as well.”
I was a little skeptical at first, but he quickly found a nice place that had a two-story outbuilding on eight acres in a rural, peaceful setting just 15 minutes from our office. It truly was perfect, giving us a quiet space away from the office to work and hash out new ideas for the upcoming year. Plus, it ran us less than $300 total, including cleaning fees.
Needless to say, I was convinced. We loved it and plan to use it for our future meetings, including our own off-site strategy meetings for upper management.
But having the travel bug myself, I started to think about how my wife and I can use Airbnb for our upcoming vacations.
How to Travel and Live for Free
Soon after all of this happened, I took a vacation with my wife to New England to visit the Boston and Cape Cod areas. We had already booked our hotels, but we quickly realized that we had made a huge mistake. We could have used Airbnb or another similar service and had a much nicer place for about half the money.
I’m not opposed to the concept of renting where you live and renting out what you own, mainly because you have the freedom to move around, while still retaining the benefits of real estate ownership, such as depreciation, mortgage interest, and tax deductions. Who says you have to buy into society’s ideology of working for 30-plus years just to own a primary residence in one location that you hope goes up in value?
My mom lived in her primary residence for 45 years and thought the ultimate success was paying that house off. It wasn’t until she reached retirement that she realized it was little help, as she was equity rich and cash poor.
I think one of the biggest points she missed was that she was giving up her freedom of mobility. This is a concept that Millennials seem to grasp much easier than older generations.
Change of Plans
So, as I inch closer and closer to retirement and my vacation home will be paid off this year (which, by the way, sits empty 10 months out of the year), I’m thinking of employing a new strategy. I’ve already downsized out of my big-box primary home since my children are grown, and my wife and I are toying with getting one or two condos or townhouses in a couple of nice locations.
Just as a precaution, we want properties that can carry themselves with regular market rent. After all, you never know what could happen. Then, we want to furnish them nicely and try the Airbnb model. I know this should work very well with my vacation home, since it is already set up for short-term rentals and is in a high-demand area.
Now, not only will we have three primary residences in retirement, but we can rent them out via an Airbnb-type of platform anytime we want. If we want to go to Europe, South America, or a new location, we can do so profitably anytime we want—especially since Airbnb rentals tend to generate more rent than a traditional monthly rental.
In other words, we could have total freedom to live wherever and whenever we want anywhere in the world. This is something I’m leaning toward, as I believe it’s not the things that we have in life that are important but the relationships and experiences we get to enjoy.
I would truly love to hear any thoughts from the BiggerPockets community on what you think of this concept or if you’re currently doing something similar.
Be sure to leave your comments below!