Tip number one is that the best ROI (return on investment) is always going to come from what I call arbitrage properties. I’m not talking about renting a property and then flipping it on to Airbnb. What I’m talking about here is actually buying the property and having it on Airbnb. Arbitrage is a word that means that you’re buying something undervalued, you’re buying low, selling high.

Now, there tends to be some really good arbitrage opportunities on investing in real estate as well. I’ll give you an example of a property that we just recently bought. It was less valuable to the remainder of the buyers in that market than it was to us looking to do it on Airbnb

This is a property in cottage country. Naturally, a lot of people from the city want to buy something turnkey, meaning it’s move-in ready, and they want to be on the lake.

For Airbnb, it’s a little bit different. We wanted a property to renovate because then we customized it for Airbnb. Since it needed a renovation, we were able to get it for about $100,000 under the asking price.

The other part of it was the lakefront. Being on the actual lake is great for a cottage but not for Airbnb. Having lake access and a view is actually fantastic for Airbnb. Our property is really great because it has lake access but it’s not lakefront. We paid a lot less of a premium for that waterfront property and our property taxes are lower.

Now, tip two is that data is your friend. You need to be able to understand it and manipulate the data and understand how to run projections for property. If you invest on your gut instinct, inevitably, you’re going to run into issues where you’re going to end up upside down on some properties, or you’re going to do that on the first property and completely set yourself back financially.

If you can invest right on the first one, then you’re going to really speed up that timeline to financial freedom. So understand data, how to use the right tools to use that data and run projections.

Now, my third tip is that in general, more bedrooms will equate to a better return on investment. The reason for this is simple. You don’t generally pay $500,000 for a one bedroom, and then a $1 million for a two bedroom. The increase in price on buying a property after bedroom number one is not proportional.

However, your revenue can almost double on Airbnb by having that additional bedroom. Our property is now a six bedroom property and has some advantages in the high season. We can drastically increase the prices because we allow groups of up to 10 people.

The other big advantage is that in the down season, when there isn’t as much demand, we can cater to the entire spectrum of demand. We can host a group of two or a group of 10. If you have a two bedroom property, then you can only host groups of four people.

Tip number four is to renovate and furnish with the guest in mind. For example, we got some board and yard games for guests to play. We added a ping pong table and made a little movie theater in the basement with a projector and a nice surround sound system.

All in, we spent maybe $2,000, but that stuff is driving massive bookings. A bigger ticket example of this is adding a hot tub and a sauna, which we added to make our property stand out and be more appealing to guests in the winter time.

My last tip is to make sure you do not underestimate the power of a successful launch. For all my tips on how to do that, check out my last video that I just posted. After doing all this work, finding the right property, getting it all set up properly, you want to make sure it actually performs really, really well long term.A big part of that comes down to launching the property successfully.

VIDEO TRANSCRIPT:

What's up guys, it's James here and in today's video, I'm going to talk to you about five things you absolutely have to know to invest profitably in airbnbs. Now these are going to be my top five tips for investing in Airbnb is profitably making the best return on your investment possible. Now if you do as a reminder, if you want to start investing in properties for short term rental, you want to start buying properties for Airbnb and make an incredible return on investment. Like I've talked about in some of these different videos, you want to learn how to do that, then just click the link down below to schedule a quick 15 minute chat with me completely free, I'd love to talk more about it with you because I am actually going to be working with a really small group of people over the next six months here, helping them to learn how to invest profitably into short term rental properties. So if that's something you're interested in, you want to do you want to do it as properly as profitable as possible, and not make any mistakes along the way, then I highly recommend that you click the link down below schedule a quick 15 minute chat with me, I'd love to discuss it further with you. Now, that being said, let's dive right into it. Let's start talking about my top five tips for investing profitably in short term rental properties. And bear in mind, this is not an exhaustive list of every single thing you need to do. Obviously, that takes a lot more. But this is my top five tips for you. Now tip number one is that the best ROI the best return on investment is always going to come from what I call arbitrage properties. Now that is not meaning rental arbitrage. Okay, so big flag on the play. I'm not talking about rental arbitrage. In this video in meaning I'm not talking about renting a property and then flipping it on to Airbnb, as a lot of you guys know who watch this content. I'm not a big fan of that model for a number of different reasons. What I'm talking about here is actually buying the property and having it on Airbnb. But arbitrage is a word that means essentially just you know, you're buying something that's undervalued, you're buying low selling high, that's where you're taking advantage of and arbitrage is spread. Now, there tends to be some really good what I call arbitrage opportunities on investing in real estate as well. And that I'll give you an example of a property that we just recently bought, if you've watched my other videos, you would have seen some of the breakdowns on that property. And the reason I say that property is sort of an arbitrage opportunity is because it was less valuable to the remainder of the buyers in that market than it was to us looking to do it on Airbnb, distinctly so. So there's a lot more value in it to us as an Airbnb than there was to a typical buyer for a number of reasons. Now, I'll Break That down, I'll kind of shed some more practical light on that so you can get what I mean. So this property is a property in cottage country. Naturally, a lot of people from the city want to buy cars right now and they want to things more than anything. They want the property to be turnkey, meaning it's move in ready, you know, it's a cottage, they're going there to relax with their family, the last thing they want to do is take on a renovation. And they certainly don't want to have to deal with any kind of headaches and add more stress to their plate. They're buying this property specifically to relax. So they want something turnkey. And the other one is they want to be on the lake cottages are on the lake, that's kind of the thing with them, right. And a lot of people have boats or CDs or different things and they want to be able to just dock it right at their property right in their section of the lake. So they want to be on the waterfront. Now for Airbnb, it's a little bit different. For Airbnb, we actually would love to buy a property that we can renovate because then we get to customize it for Airbnb. And we can use what's called the burst strategy where we actually are going to renovate the property force the appreciation because that renovation forces the property to increase in value. And then we can do what's called a cash out refinance and effectively end up pulling our money back out of the deal. So that now our downpayment and renovation costs are back in our pocket. And if you're not familiar with this strategy, then again, I can talk to you more about it in depth if you want to schedule a call with me to pretty awesome real estate investing strategy for long term buy and hold. So renovating a property is actually great for us. And so this property that we purchased having needed a bunch of renovations was not desirable to a lot of the other people buying properties. As a result it sat on the market. And as a result of that, we were able to get the property for about $100,000 under asking price. Now bear in mind, this is a market just like a lot of other markets out there right now, where properties are typically going for $100,000 over asking price. There's usually bidding wars things are up massively year over year. So getting a property for $100,000 under asking price is virtually unheard of. And just because we were able to find this deal that was a really good what I call arbitrage opportunity. Now the other part of it was the lake front. Now being on the actual Lake having a waterfront right out your property is great for a cottage but for Airbnb. It's actually not that necessary. No one at airport who's booking an Airbnb is going to bring their boat or bring their CTO to the property. Having like access and a leg view is actually fun. tastic for Airbnb as well because they might want to drop a canoe or a kayak in and having that beautiful view would be really nice. Now this property is really great because it has Lake access, it's got a Lake View, but it's not technically on the lake front, it's actually right across the road from the lake front. And the property on the other side of the road that is on the lakefront is too small to ever be built on. So there's never going to be any building obstructing our view of the waterfront, we can always access it with a canoe or kayak, we're just not technically on the waterfront. Now the advantage of that is that we get to pay a lot less of a premium for that waterfront property, our property taxes are lower, because being on waterfront, your property taxes are naturally a bit higher. And so we get to save some money there, save some money on the purchase price and still have an awesome property for Airbnb. So that's tip number one is that the best return on investment is going to be finding properties that aren't as desirable to the rest of the people buying them but are uniquely valuable to you investing for Airbnb. Now, tip number two is that data is your friend, you need to be able to understand it and manipulate the data understand how to run projections for property, you cannot buy on a whim. I've seen too many people do this. And yes, sure it can work out if you just invest on your gut instinct. Maybe once, maybe twice, you'll get lucky and it'll work out. But inevitably, as you start to keep going, you're going to run into issues with that model where you're going to end upside down on some properties, it's not going to go your way or worse, you're going to do that on the first property, and you're going to completely set yourself back financially for their whole investing potential, especially early on when you're just getting started. It's so crucial that those first couple deals are not just winners, but they're knocked out of the park winners, because that's going to really slowed down your timeline to complete financial independence and financial freedom, which is ultimately the goal for a lot of us. And so if you can invest right on the first one, then you're going to really slow it, you're going to really speed up that timeline and shorten that timeline to getting to financial independence and financial freedom. So understand data, how the right tools to be able to use that data and run projections, like I said, This property is a property that we projected and we ran analysis on. And I knew that as a worst case scenario, it would be generating $50,000 over the course of the year. And even then it would still be generating a 278% total ROI when you factor in the cash flow, the equity and the appreciation. So I knew it was a winner no matter what. Now on surprisingly, he did a lot better than that worst case projection, and we're trending closer towards 100 and $120,000 for the year. So that means that it's going to generate about 50 to $70,000 in cash flow is one property can virtually make us financially independent. So it really does make a big difference to have that data and run those numbers. Now. My third tip is that in general, as a rule of thumb, this doesn't always apply. But in general, more bedrooms will equate to a better return on investment. And the reason for this is simple. You don't generally pay $500,000 for a one bedroom, and then a million dollars for a two bedroom. The increase in price on buying a property after bedroom number one is not proportional, right, it keeps decreasing. So you might pay $500,000 for a one bedroom home, but only $600,000 for a two bedroom home. But your revenue can almost double on Airbnb by having that additional bedroom. Again, that's not always the case. But you want to really look at the numbers and see what the case is. Because for this property that we've got the six bedroom property, we actually bought it as a three bedroom, renovated the basement and added three more bedrooms. So now it's a three bedroom, it's a six bedroom property. Now being that it's a six bedroom property, it has some really great advantages in the high season, it means that we can really drastically increase the prices, we booked people for as much as 12 and 13 $100 per night on this property. That's because we allow guests of up to 10 people, we allow groups up to 10 people, that means that 12 $100 a night is $120 per person, which is the cost of a cheap motel for a lot more reasonable so you can justify those higher prices. The other big advantage is that in the down season, when there isn't as much demand, we can cater to the entire spectrum of demand, we can host a group of two we can host your group for we can host a group of eight we can host a group of 10. If you have a two bedroom property, then you can only host groups of 123 or four people. For us with a six bedroom property we can host groups of 123456 all the way up to 10, sometimes even 12 people. So that's a really great advantage as well as you just have access to more of the available demand in the low season. So it's a lot easier to keep that property booked and performing well all throughout the year. Now, tip number four is to renovate and furnish with the guest in mind. You really want to have the guests in mind have the ideal avatar Guess Who's Coming to your property in All throughout the renovation and furnishing process, this will lead you to make some really high impact high ROI decisions if you do it properly. For example, we had the guest in mind, we really understood exactly what this guests would be looking for. And so we spent a couple $100 on just getting some board games and to me yard games for guest to play like cornhole, you know, like, like spike ball, we add some board game, you have catana Ticket to Ride these silly little things, all in that cost as a few $100. To add to the property, we added a ping pong table for another couple $100. For $400, we made a little movie theater in the basement with a projector and a nice surround sound system. Now all in let's say we spent maybe 1000 to $2,000 on all that stuff, all that stuff is driving massive bookings, it makes our property way more desirable than the other listings that are available in the market right now. So as a result, that's going to lead to 1000s of dollars in additional bookings and a premium that guests are willing to pay to stay at our property over other properties. So those little things are going to yield a massive ROI simply because we did those things with the guest in mind. Now bigger ticket example of this is adding a hot tub and a sauna, which we added, because we know that the downtime is the winter time. And that's going to make our property stand out and be more appealing to guests in the winter time. It's something that very few listings in the area have, so it makes us really stand out against the competition. Now, my last tip, tip number five, is to make sure you do not underestimate the power of a successful launch, you need to make sure that you launch effectively. Now for all my tips on how to do that, check out my last video that I just posted, I walked through all the different steps, I have all the different tips I have for ensuring that you have a successful launch. But it's really, really important that if you're going to be investing in short term rental properties, you understand just how important the launch is to your property. After doing all this work, finding the right property, getting it all set up properly, you want to make sure it actually performs really, really well long term. And a big part of that comes down to launching the property successfully. So you want to make sure you do that. And don't skip over that or rush that process at all. In our case, we waited an extra four or five days to launch it properly, we had to wait for the photographer to get the photos back to us. And it more than paid off because as I talked about in that other video, we generated over $35,000 in initial bookings just in the first 48 hours, that's propelled us to being able to book now over $65,000 for just the next three months alone, when our initial worst case scenario, projections were just $50,000 for the year. So we've now exceeded that in just three months. Now that a big part of that also has to do with the launch. So I highly recommend that you check out that other video as well. And just understand the importance of a successful launch on Airbnb. Now again, I hope this has been really valuable to you. If you do want to get more involved, you want to actually buy your first property for short term rental in the next 12 months here, get it up and running profitably. And I highly recommend you click the link down below to schedule a quick 15 minute call with me, I'd love to talk to you more about your goals and see how we can help you to achieve them. And I'm working with a really really small intimate group of people over the next six and 12 months here to help them invest profitably into their next short term rental property. So whether you've never invested before you don't have any experience or you have experience and you're just looking to level up your portfolio, level up your performance, then I highly recommend scheduling that quick chat the link in the description down below. And I would love to talk to you more about how we might be able to help them work with work together. Also, if you are interested in managing other people's properties on Airbnb, then we've got a free train link down below in the description as well. So I highly recommend checking that out as well. And then lastly, if you did like this video, if you got value from it, if you enjoy it, if you just like me and want to help me and want to support me, I would really, really appreciate if you just took a quick second and just press that like button, take a quick minute, use your cursor, go over there, find the like button, click it, click it, just make sure it's clicked, click that like button. It really really does help me out a lot really helps to improve this channel helps us to grow the channel. So I'd really really appreciate if you do that. And then also just make sure you subscribe if you're not already. I don't know what you're doing sleeping on that subscribe button, make sure that you're subscribed so you can stay up to date. We post two new videos every single week and I try to make them high impact high value for you guys. So if you want more of that you want to stay in touch. You want to stay up to date with the videos and just make sure that you're subscribed to the channel and I will see you in the next video.

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