Airbnb - my favorite real estate investing- Observation #1
Airbnb or STR (short term rentals). The concept is furnished rentals that are rented for short terms as short as 1 day to 30days or longer if you desire.
I'm a newbie. I only started in 12/2017 with my first airbnb. So far I'm loving it. it's a lot of work and I'm glad not everyone is doing it because it's hard or scary or too much work.
I want to share "observations" and reasons why I like Airbnb so much. I've been doing traditional buy/hold traditional investor for several years and I have little desire to continue finding another12 month or "long term tenants".
Observation #1: Niche marketing.
I've been want to to market to a specific clientele or target tenant (without violating discrimination laws). I'm not talking about race/ethnicity/social class. My question is this: Why market to the everyone? Instead can I market ONLY to a specific type of tenant. Specifically, can I attract a certain type of tenant - long term, stable, good income, low wear and tear, etc.
Every buy/hold investors dream, right? So I thought how about the education market - universities - not college students but rather graduate and professional students (e.g. medical students who spend 4 years in one place).
Targeted tenants. I know we have all heard on BP podcasts and other interviews where successful investors have done this.
For example, one BP podcast (anyone remember?), an investor had a constant/nonstop tenant base from a sorority. He did not have to do any mass marketing on Zillow, craigslist, or any other listing. He had a captive audience that kept sending him tenants - College women from one sorority. This gave him consistency, ZERO vacancy, and some leverage over his tenants in some ways.
I wanted to replicate that model. However, i did not find this to be easy......until I found Airbnb.
Airbnb markets to vacationers, business travelers, etc. it's not a "niche marketer".......well actually it is.
Do you know anyone who lost their job during their airbnb stay? Do you know anyone who got a divorce and completely trash your rental during an Airbnb rental stay? It just does NOT happen. Even if it did, it would happen 100x less than in your regular 12 month lease situation.
Unfortunately, I've experienced both of those things in my traditional rentals. The HIGH cost of repairs, turnovers, vacancy was killing my cash flow and starting to erode my faith in buy/hold investing. Cash flow just plain sucks. Without appreciation, this kind of investing is a sham.
So my clients in my very FIRST 3 bedroom/2bath home in Dublin, California is attracting a lot of wedding goers, some mix of business travelers, and families on vacation. They all pay on time (since airbnb collects the RENT before they even arrive). I have ability to charge for damages that Airbnb will be the arbiter AFTER each stay.
How to niche market even further? If I find one type of client/guest the BEST. I can work to market to that ONE type of guest. If my biggest money maker is wedding goers. I can market/network with wedding related business close to my airbnb to attract ONLY those type of guests. Now, this is just an example. I'm too new to know if this the "best" guests.
I love Airbnb/STR.
Check out my FIRST airbnb rental in Dublin, California
https://www.airbnb.com/rooms/22130761?s=51
Oh yeah, I'm always looking for "boots" on the ground - if you are a newbie, have lots of time and willing to get your hands dirty and learn this awesome new way of investing, message me. If you are already successful, please keep reading my post but I really only have time to train a few people who are LOTS of times and eager to work. I'm looking for people in SF bay area, Indianapolis, and Northern Atlanta.