AirBNB Service help
Real Estate Agent · MO · Member since 2022 · 33 posts · 10 votes
Hello! I am trying to get my foot into the door with AirBnB with people who already do long term rentals. My idea is to call people with long term rentals and ask if they would like to switch their long term rental into an AirBnb. They would have high margins with this opportunity I just don't know how I can pitch this idea. I would furnish their rental for them through their funds and take care of their customers. Does anyone have any thoughts on how to make this idea a reality or if it is even worth trying to make a reality?
I'm not getting the benefit to the property owner. I saw a possible 25% uptick in revenue? But what about empty/slow months? Do you arbitragers still pay the lease?
If you have leased the property in rental arbitrage, you are bond by law to pay the monthly rent you agreed upon. So, in slow months you obviously still have to pay the lease. Again, this is not rental arbitrage, there is no lease just a contract like with all other management or co-hosting companies. Do you deal with STR? Since you're on this forum I assume so. You should know about the concept of an Airbnb management company, and this is the same thing. But instead of the owner seeking the company out, the company seeks the owner out. And from stories I've heard, usually you only have to do this a handful of times before the references start coming in.
Benefit to the owner....If you know STR you know that if the property is in a good area and preforming right, you usually make 30% more through STR then LTR. But many LTR owners don't realize that until someone starts showing them data and numbers. Hence what @Roman Katz was asking about.
So this sounds even worse than arbitrage if your not guaranting to pay a predefined lease amount.
Yes, you need to check out Michael Sjogren founder of Short-Term Rental Secrets. In five years he used this exact strategy to make it to the level he is at today. We're doing the same ourselves and Michael as well as the other team coaches have been amazing teachers!
Thank you I will have to check that out. How has your experience been so far?
Thank you I will have to check that out. How has your experience been so far?
So, I just read your bio and previous posts...impressive! Have you graduated high school; did you move to OKC....I'm from the stillwater area..., how did you get a realtor's license while in high school? Haha maybe I should have just DM you. Now is definitely the time to start, you'll never regret it! For us it has been going well, a bit slow in the convincing people to switch from LTR to STR. We've had more traction advertising as a co-host company for STR and gaining people who already have STR or are buying one. To be honest we haven't spent much time reaching out to LTR landlords, but we have that on our list for the next month.
So you're talking about doing an arbitrage business?
So playing devils advocate - tell me why I would want to sign a lease with you to allow you to sub-let my property to people on a vacation rental basis. People I don't know or have any control over? What if the economy or the travel industry takes a nose dive? Will you still honor your lease with me?
And did I get it right that you would want me to use my funds to furnish the property?
So Arbitrage?
Read on here about arbitrage first.
@Bruce Woodruff it’s more of me not paying a lease and helping them take care of their property for them for Airbnb so yes they furnish I will transform their earnings to 25% higher and keep the house in better condition!
@Bruce Woodruff @John Underwood This is nowhere near rental arbitrage and I mean nowhere near it! Which BTW I probably wouldn't do arbitrage myself, but people have done it successfully and made enough to grow their personal portfolio. There are many perks to having arbitrage done with your property then LTR. Once a rental arbitrage company has built that level of trust with landlords and has a stellar reputation, they are unstoppable. And the landlords are very happy to have homes professionally cleaned regularly, have fewer turnover repairs and costs once the lease is up, and make more money since they could charge premium monthly rent with no hassles. Shockingly not everyone wants to mess with STR, even with a PM company.
Everything has its pros and cons, and everything isn't for everyone. But let's not forget there's more than one way to skin a cat and that is more than ok!
So what you want to do @Roman Katz, is to convince someone to take their LTR, furnish it for you and you will manage it?
I assume you have a bunch of STRs under your belt and have been managing for years?
What do you bring to the table?
So many folks want to get into STRs by co-hosting (what you kinda want to do) or arbitrage with zero experience or money.
Unless you have some success in managing a STR and making it great, why would anyone hire you? Essentially you want someone to take all the risk so you can get some on the job training.
What you might want to do is find someone running a few STRs in your area and volunteer to work for them for free in order to learn the ropes.
@Bruce Woodruff it’s more of me not paying a lease and helping them take care of their property for them for Airbnb so yes they furnish I will transform their earnings to 25% higher and keep the house in better condition!
So you do not want to have a lease? Just run the property for the owner? Then you'd get to walk away if times got tough? Doesn't sound like a good business model for the owner....for you yes, but 25% more (theoretically) for a smart owner is not enough for that risk.
Who pays liability insurance/utilities, repairs? I suppose the owner?
@Bruce Woodruff it’s more of me not paying a lease and helping them take care of their property for them for Airbnb so yes they furnish I will transform their earnings to 25% higher and keep the house in better condition!
So you do not want to have a lease? Just run the property for the owner? Then you'd get to walk away if times got tough? Doesn't sound like a good business model for the owner....for you yes, but 25% more (theoretically) for a smart owner is not enough for that risk.
Who pays liability insurance/utilities, repairs? I suppose the owner?
Hopefully @Roman Katz doesn't mind me answering since he was putting feelers out and I know the answer. Just like if the owner were to realize the potential his property were to have and hire a company to run it as a STR, yes, the owner would handle the insurance, utilities, and repairs. All this entails is finding a good property that the owner doesn't realize could make quite a bit more as a STR, inform the owner, and if they choose to try STR offer to look after the property for them. Most LTR owners don't have the time to do that, their attention is elsewhere.
Lastly just like with anything else there is a contract involved, so no you can't just walk away from the owner when times get rough. If that is the mindset of someone, they need to find another industry to work in.
There are hundreds if not thousands of us that have done this and built businesses that gave us financial freedom! So that means there are just as many owners that are okay with this model.
@Michael Baum We usually don't offer our services for free because that is what people do who won't put money into education or having a mentor/coach. And those are the people that you should probably watch out for. Those of us that are confident in what we know works and have a mentor behind us may offer a bit of a discount, but that is all. We spend way too much time looking after a property and making the most out of its' potential to do it for nothing.
I'm not getting the benefit to the property owner. I saw a possible 25% uptick in revenue? But what about empty/slow months? Do you arbitragers still pay the lease?
I'm not getting the benefit to the property owner. I saw a possible 25% uptick in revenue? But what about empty/slow months? Do you arbitragers still pay the lease?
If you have leased the property in rental arbitrage, you are bond by law to pay the monthly rent you agreed upon. So, in slow months you obviously still have to pay the lease. Again, this is not rental arbitrage, there is no lease just a contract like with all other management or co-hosting companies. Do you deal with STR? Since you're on this forum I assume so. You should know about the concept of an Airbnb management company, and this is the same thing. But instead of the owner seeking the company out, the company seeks the owner out. And from stories I've heard, usually you only have to do this a handful of times before the references start coming in.
Benefit to the owner....If you know STR you know that if the property is in a good area and preforming right, you usually make 30% more through STR then LTR. But many LTR owners don't realize that until someone starts showing them data and numbers. Hence what @Roman Katz was asking about.
I'm not getting the benefit to the property owner. I saw a possible 25% uptick in revenue? But what about empty/slow months? Do you arbitragers still pay the lease?
If you have leased the property in rental arbitrage, you are bond by law to pay the monthly rent you agreed upon. So, in slow months you obviously still have to pay the lease. Again, this is not rental arbitrage, there is no lease just a contract like with all other management or co-hosting companies. Do you deal with STR? Since you're on this forum I assume so. You should know about the concept of an Airbnb management company, and this is the same thing. But instead of the owner seeking the company out, the company seeks the owner out. And from stories I've heard, usually you only have to do this a handful of times before the references start coming in.
Benefit to the owner....If you know STR you know that if the property is in a good area and preforming right, you usually make 30% more through STR then LTR. But many LTR owners don't realize that until someone starts showing them data and numbers. Hence what @Roman Katz was asking about.
So this sounds even worse than arbitrage if your not guaranting to pay a predefined lease amount.
Hello! I am trying to get my foot into the door with AirBnB with people who already do long term rentals. My idea is to call people with long term rentals and ask if they would like to switch their long term rental into an AirBnb. They would have high margins with this opportunity I just don't know how I can pitch this idea. I would furnish their rental for them through their funds and take care of their customers. Does anyone have any thoughts on how to make this idea a reality or if it is even worth trying to make a reality?
One in ten would hear you out, and after a month you'd have a few to chose from. If you get a place near Power & Light district, I'd imagine you'd do great!
Essentially you are trying to be an STR property manager with the added obstacle of trying to get LTR owners to spend $5,000+ to furnish their units so that you can make a percentage. That's going to be a hard sell. But good luck to you.
Depends on the person or company. I know the large companies like Evolve or Vacasa charge close to 40%-50% of each booking plus added fees. If you want a small company or person looking after your STR usually it's around 15%-25% of each booking, sometimes with an added tech fee and sometimes without. So, off your monthly profit that percentage would go to whoever is taking care of your property.
For us and the model Roman was asking about, we usually wouldn't take on a property that would only bring in a couple thousand a month. The numbers work better for everyone if it's around $4,000.
I'm not getting the benefit to the property owner. I saw a possible 25% uptick in revenue? But what about empty/slow months? Do you arbitragers still pay the lease?
If you have leased the property in rental arbitrage, you are bond by law to pay the monthly rent you agreed upon. So, in slow months you obviously still have to pay the lease. Again, this is not rental arbitrage, there is no lease just a contract like with all other management or co-hosting companies. Do you deal with STR? Since you're on this forum I assume so. You should know about the concept of an Airbnb management company, and this is the same thing. But instead of the owner seeking the company out, the company seeks the owner out. And from stories I've heard, usually you only have to do this a handful of times before the references start coming in.
Benefit to the owner....If you know STR you know that if the property is in a good area and preforming right, you usually make 30% more through STR then LTR. But many LTR owners don't realize that until someone starts showing them data and numbers. Hence what @Roman Katz was asking about.
So this sounds even worse than arbitrage if your not guaranting to pay a predefined lease amount.
I'm guessing the model of self-managing is so prevalent on here that hiring a company is a novelty. Last I checked Evolve or Vacasa don't pay owners a lease to run their STR, and this is no different. What is difference between advertising your business through all sorts of formats, or advertising AND showing up a REI meetup to form connections in an area. Once you have done that it's not hard to show them the numbers of a what a STR can do.
Depends on the person or company. I know the large companies like Evolve or Vacasa charge close to 40%-50% of each booking plus added fees. If you want a small company or person looking after your STR usually it's around 15%-25% of each booking, sometimes with an added tech fee and sometimes without. So, off your monthly profit that percentage would go to whoever is taking care of your property.
For us and the model Roman was asking about, we usually wouldn't take on a property that would only bring in a couple thousand a month. The numbers work better for everyone if it's around $4,000.
are you sure ? evolve only charges 10% and vacasa is about 22% ?
Depends on the person or company. I know the large companies like Evolve or Vacasa charge close to 40%-50% of each booking plus added fees. If you want a small company or person looking after your STR usually it's around 15%-25% of each booking, sometimes with an added tech fee and sometimes without. So, off your monthly profit that percentage would go to whoever is taking care of your property.
For us and the model Roman was asking about, we usually wouldn't take on a property that would only bring in a couple thousand a month. The numbers work better for everyone if it's around $4,000.
are you sure ? evolve only charges 10% and vacasa is about 22% ?
Maybe with the additional fees is closer to 40%-50% then? I heard it was far more than that unless you did cleaning and maintenance, but if that's the case it totally explains their service!
Depends on the person or company. I know the large companies like Evolve or Vacasa charge close to 40%-50% of each booking plus added fees. If you want a small company or person looking after your STR usually it's around 15%-25% of each booking, sometimes with an added tech fee and sometimes without. So, off your monthly profit that percentage would go to whoever is taking care of your property.
For us and the model Roman was asking about, we usually wouldn't take on a property that would only bring in a couple thousand a month. The numbers work better for everyone if it's around $4,000.
are you sure ? evolve only charges 10% and vacasa is about 22% ?
Maybe with the additional fees is closer to 40%-50% then? I heard it was far more than that unless you did cleaning and maintenance, but if that's the case it totally explains their service!
holy cow.... based on their offering to me, it is 22% all-in, and I don't even accept it.
Depends on the person or company. I know the large companies like Evolve or Vacasa charge close to 40%-50% of each booking plus added fees. If you want a small company or person looking after your STR usually it's around 15%-25% of each booking, sometimes with an added tech fee and sometimes without. So, off your monthly profit that percentage would go to whoever is taking care of your property.
For us and the model Roman was asking about, we usually wouldn't take on a property that would only bring in a couple thousand a month. The numbers work better for everyone if it's around $4,000.
Yeah, the numbers wouldn't come close to working on a $2000 house. Once you take away the 25% for management, that negates the extra 25% that you say we could make, right? So now you've got a property that could just be a LTR, yet someone is running it as a STR with those inherent problems.
I suppose there are scenarios where this is a win/win, but I'm not seeing it. However being a long-time entrepeneur myself, I like to see people thinking outside the box! I hope it works for you guys.....
Depends on the person or company. I know the large companies like Evolve or Vacasa charge close to 40%-50% of each booking plus added fees. If you want a small company or person looking after your STR usually it's around 15%-25% of each booking, sometimes with an added tech fee and sometimes without. So, off your monthly profit that percentage would go to whoever is taking care of your property.
For us and the model Roman was asking about, we usually wouldn't take on a property that would only bring in a couple thousand a month. The numbers work better for everyone if it's around $4,000.
Yeah, the numbers wouldn't come close to working on a $2000 house. Once you take away the 25% for management, that negates the extra 25% that you say we could make, right? So now you've got a property that could just be a LTR, yet someone is running it as a STR with those inherent problems.
I suppose there are scenarios where this is a win/win, but I'm not seeing it. However being a long-time entrepeneur myself, I like to see people thinking outside the box! I hope it works for you guys.....
Exactly! That's why we would analyze each property before committing, or in this case offering anything to the owner.
You could consider offering a trial period where you take care of everything for the property owner and show them the potential earnings of switching to an Airbnb model. Additionally, it's important to have a clear and transparent agreement in place that outlines the responsibilities of both parties and how profits will be divided.
Hey @Sarah Kensinger, I am not sure exactly what you mean. You mean you don't offer management services for free? I get that.
Do you mean you don't have people whom you mentor for free?
Either way I get it. Personally I give away all the knowledge I have on any topic. But I am not trying to make a living on most of it.
That is why I am glad BP exists. So many of us with hard won experience give away our knowledge to those that look for it. It is a cool place.
Now that I think about it, maybe I should have charged all those college interns I hired over the years instead of paying them. :)