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How I Make A Fortune On Airbnb Owning No Property | DONT BUY A HOME FOR AIRBNB IN 2019 - YouTube
Channel: Sean Rakidzich
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welcome back Airbnb family today we're
gonna talk about a discussion that has
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been passed around in my social circle a
lately which is whether it's better to
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go for equity or cash flow when buying
your first Airbnb home now I have a very
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strong opinion on this and I'm sure
plenty of you do on either side of the
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fence but mine is gonna mess with you
here my opinion..
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Don't buy a home! don't buy a single property if you want to be
an Airbnb host and there's a very good
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reason for this we're gonna jump right
into it it's a very simple math problem
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if you want to have multiple Airbnb
properties and be successful as a
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business don't buy your home so here we
go let's say you are buying your first
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investment property you need 20% down
because it's a non FHA you're not gonna
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live there you're gonna run out the
entire place on Airbnb which means since
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you're not living there it's an
investment property 20% down so let's
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say you buy a $250,000 home with two
bedrooms and your 50,000 down you also
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need to upgrade it possibly and furnish
it so you're looking at potentially
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$70,000 a month before you're live on
air BnB now that two-bedroom property
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will profit you maybe $5,000 and that is
including your equity because you'll
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have to pay property taxes utilities pay
for your cleaner etc and in this example
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the other person's gonna pay for their
cleaners too so let's keep it even so
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you're gonna make maybe sixty two to
sixty five hundred dollars a month on
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your two-bedroom and your profit after
all the costs will be five thousand
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dollars including your equity and so
seventy thousand and five thousand
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dollars a month out okay that's the
homeowner side now I rent my property
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i furnish them and then I short-term
rent them now let me tell you what I do
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with my seventy thousand dollars in this
situation I get ten properties right it
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cost me about seven thousand dollars per
that includes my cost of getting my
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first lease the furniture everything
okay so at ten properties
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my rents are probably about fifteen
hundred dollars in average with my
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utility costs sixteen fifty I don't have
to pay property taxes everything's
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worked into the of course into the rent
and I don't have to worry about insuring
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my my appliances the landlord has to fix
the plan
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if they break things like that so 1650
and costs plus my cleaner costs I make
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about three thousand dollars a month of
my property so let's say just you know
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conservatively I make nine hundred
dollars per unit so ten units that's
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nine thousand dollars a month where
homeowner with their seventy thousand
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dollars is now making five thousand per
month so you can see I'm already ahead
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by four grand a month but it doesn't
even end there so the cool thing about
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doing rentals is you can grow in smaller
increments the moment I have another
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seven grand I can put another property
and have eleven right so first month I
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make nine grand I can put seven thousand
towards another property I make another
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grand my second month I can put another
property down my third month I make
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another nine grand I can get almost two
more properties my third month so by
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month and a month three I'm looking at
about fourteen properties which is
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outstanding the person who owns a home
they need to actually make profit for
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fourteen months before they have seventy
thousand dollars again before they can
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get their second property now some of
you homeowners are gonna say well I gain
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valuation of my property because it's
going to appreciate in value by like
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three percent on average a year well
let's factor that in so let's say that
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your $250,000 home makes 3% a year
you're looking at about seven thousand
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dollars a year in appreciation so let's
break that up to like six hundred and
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fifty dollars a month and appreciation
so you're making five thousand now let's
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add the 650 so you're making fifty six
fifty per month including your
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appreciation I'm still making nine I'm
still weaponeer there but let's talk
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about housing bubbles right you could
lose money on your property this could
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actually happen also you could buy a
home in a terrible part of town that's
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not good for air B&B which means you own
it you're gonna have to sell it or turn
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it into a regular rental property which
is not why we're here we're here to make
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more money than that if I get a property
where I lose money which I've done
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before I just cut the lease right I'll
even buy it out early if I really want
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to get out of it fast so at worst case
scenario I'm stuck with a property for a
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year but it makes me more agile I'm in
I'm out I find the right neighborhoods
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and I make all my money that way and I
do this completely legally we're gonna
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actually cover this in a very recent
like very near future video I'm gonna
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actually show you the legal process that
I take to pick up all of my leases and
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homeowners or
property management companies they can't
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do anything about it they are stuck with
me at least to the end of the lease so
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we're gonna talk about that later and
this is going to be the secret to making
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your fortune on Airbnb but to keep on
topic here don't buy your property it's
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sluggish it's slow you need way too much
money to get in initially now you're
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money stuck in your property if you have
to turn it into a regular rental which
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is no fun it's just not nearly as
profitable and it's a little harder to
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manage too because you're stuck
replacing your own appliances so I don't
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if it's no breaks I'm like hey
maintenance come in fix my stove thank
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you goodbye and it's a lot easier for me
to track my expenses too because
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everything's kind of rolled into my
lease agreements so if you have any
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other questions kind of on this topic or
maybe even like just some fast facts on
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like how to host certain ways if you
have certain problems that you've had
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with guests or you know with your
listings feel free to leave me a comment
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below I'll be happy to help you out you
just let me know what you need leave the
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comment now like this video share it
with your friends and of course if you
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want more content like this you
subscribe more is coming and I promise
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you very soon I'm gonna teach you the
legal way that I picked up my 20
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properties without owning a single one
so thank you for watching air B&B
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automated I will see you on the other
side
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car
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