5 Things You Need to Know to Run Your Airbnb Business in 2020
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What do you need to know to run a successful Airbnb business in 2020? We’re going to talk about the qualities and outlook all Airbnb property managers should know!
First off, in order to be successful managing properties on Airbnb in 2020, you need to know that problems are a good thing. What that means, is that problems in the market, whether it be problems that hosts are facing, or problems that property owners are facing, are a good thing for us as property managers. Often, people get scared off when they see that hosts are having challenges with getting support through Airbnb, or they are experiencing difficulties in the market.
But think about it this way: as property managers, we are in the business of solving problems for hosts and property owners. So the more problems they have, the more challenges and frustrations that they are experiencing, the better for us! It is our job to find creative solutions to these problems, and add value to our clients. The more effectively we can solve those common problems and pain points, the easier it will be to get and retain clients, making more money through management fees.
The second thing that’s essential to remember is how important data is to succeed with an Airbnb management business. The reason we’re able to outperform most other properties is because we are using an effective pricing strategy that isn’t based on emotions, but is based on data.
Most hosts will have an idea in their head of how much income they want their property to bring in every month, and base their pricing off of that idea. But pricing properties like that isn’t the way to ensure you’re maximizing revenue on your property, adjusting prices based on reliable data points.
The third thing that is extremely important for success in an Airbnb management business in 2020 is risk mitigation. Wherever you can reduce the potential downside or financial risk that isn’t necessary and isn’t worth it, that’s an important thing to do, especially in these times. For example, businesses that failed to move operations online and stuck solely to the riskier brick and mortar method, there’s a lot of those businesses who haven’t succeeded and have needed to close.
While maximizing upside is important, I would say that mitigating your downside is actually more important. An example of that, in my opinion, is rental arbitrage. You’re making a large investment in a property that is risky, there’s a lot of overhead, and you don’t actually have any equity in the investment like you would if you owned the property. While that is a model some people use and it is possible, I don’t think it’s a good option for 2020 because of the risk involved. Especially considering the other option, the management fee model, where there isn’t the same risk and no additional capital outlay at the beginning.
The fourth thing that’s crucial to know is that guests want flexibility. Now, more than ever, flexibility is becoming an essential need for guests. On the Airbnb platform, you can filter your results based on cancellation policy, and that’s something that is extremely valuable from a guest’s perspective. So as much as from a financial standpoint it’s better to have a strict cancellation policy, it’s important that we continue to adapt to the needs and wants of the customers, being flexible and understanding.
The fifth thing you need to know to manage and grow your Airbnb management business in 2020 is that adaptability creates opportunity. We touched on that a bit when looking at cancellation policies, but it goes further than that. So we’re seeing how important it is to adapt your listings to cater to the additional concerns and desires that guests have right now. Some examples of this include cleaning protocol, high speed internet, on site amenities that are open and can be used by guests. So you want to promote and cater towards what guests are actually looking for right now.
The free training that’s in the links show how to build this business successfully, walking you through step by step how to earn a full time income managing other people’s properties on Airbnb.
What's up guys, it's James here and in today's video, I want to share with you five things that you need to know in order to grow and run your Airbnb business successfully in 2020. Now, before I get started, I do want to give a quick shout out to Sean over at Airbnb automated. He was the inspiration for this video, I saw on his channel that he posted a video called 10 things that you need to do in order to grow your business in 2020. So I wanted to put together something similar from my perspective, looking at it from not so much rental arbitrage, but from property management, meaning percentage management fee model.
So I didn't watch Shawn's video, because I want to make sure that this one is unique. And that I can it'll be I think it'll be interesting to kind of compare and contrast the two. So without further ado, I'm just going to dive right into it. The first thing that I think is really, really important for people to know, before they get started, or as they get started, if you really want to be successful in Airbnb management in 2020, you need to know that problems are a good thing.
Now I put together a whole other video talking about this in more detail on the channel here, which you can check out as well. But what I mean by this is that problems in the market being problems that hosts or property owners are facing right now are a good thing. A lot of people get scared off when they see that Airbnb hosts right now are really upset with Airbnb, or they're having challenges with it getting through to Airbnb support, or property owners are really struggling right now. And the reality is, that is a great thing for us being in this business.
Because ultimately what this business is, is we're in the business of solving those people's problems. We're in the business of solving problems for Airbnb hosts and for property owners. So the more problems they have, and the more painful the problems are that they have, the better it is. for us. A lot of people think the exact opposite. They think that because people are, you know, upset with Airbnb that it's a bad business to be in the couldn't be further from the truth.
At the end of the day, hosts are upset with Airbnb for a specific reason. Now, we want to make sure that Airbnb is working to solve those problems, because we want to make sure that Airbnb and short term rental isn't going to have some kind of decline, which obviously, it looks like it's not all signs are pointing to the exact opposite. Now that's a good start. But from there, it's really our job to be able to creatively find solutions to those problems. And the more effectively that we can solve those problems for the property owners and the hosts that we work with, the more valuable we become to them, that's going to make it easier to get clients and easier to retain clients for more money and management fees.
So that is a really big plus. And I think that now more than ever, with problems being absolutely everywhere in the world, and especially so in the world of Airbnb hosting, it's important to remember that those problems are actually opportunities and that they are a good thing. Now, the second thing that I think is absolutely crucial for people to remember, they want to be successful, growing and managing in Airbnb management business in 2020. Right now, I do think this opportunity is absolutely fantastic, and probably the best it's ever been right now. I think it's more important than ever that you know, and remember and understand how to leverage this that number one data is king.
Now, data is super, super important when it comes to pricing your property on Airbnb, the reason that we're able to outperform most property owners and help them to earn way more money than they were earning without us is because we use a different pricing strategy than most hosts use. The reality The truth is that most hosts price their property based on their emotions, they have an arbitrary number in their head of how much money that they want to earn each month. And they're going to adjust their pricing relatively to get to that, that goal. And oftentimes this school isn't even $1 value.
A lot of times, if hosts have a goal of getting to 100% occupancy, I'll tell you what you can price your property right now at $1 a night and I guarantee you, you're going to get your hundred percent occupancy very quickly. But you're also only going to earn $30 that month, and it's not going to be a very good month financially for you. So it's really important to remember that data is king, especially when things are changing as much as they are right now, it's really important that we rely on one well informed data, you know, proper data to inform our decisions when it comes to pricing. We need to do that if we're going to maximize returns, especially when there are huge opportunities.
We're seeing big surges in bookings in some places. And if you're not being careful and actually monitoring your numbers and knowing what to look out for, you can miss out on a whole bunch of opportunity and leave a whole bunch of money on the table. Now and talk more of that there's a link in the description below to a free training that walks through the step by steps of how to do that. Whether you're managing your own property or just a host on Airbnb, or whether you're building a business managing other people's properties on Airbnb, you can check out either one of those links in the description below to one of those free trainings that's gonna walk you through all that more in depth step by step but I do think that's a really crucial piece especially Right now in 2020, is just to remember that data is king and that you need to use it in your business to get results for both yourself and your clients.
Now, the third thing that I think is really, really important in 2020, and I think is pretty obvious when you look at just about any business owner, if you talk to any business owner right now, is it risk mitigation is crucial. You need to be in a business where you can mitigate a lot of the potential downside, there are a lot of people that are struggling needlessly right now, because they got into businesses that had a whole bunch of downside potential that just frankly, wasn't necessary in a lot of businesses that could have brought things online and how a large part of the business online, but instead, they were sticking to brick and mortar retail, there's a whole lot more overhead in that business.
And so a lot of those businesses, we're gonna see closing their doors like we already have, because they had needlessly high expenses for the business that they were in. If they had shifted their approach, it shifted their model, they could have had the exact same business for all intents and purposes, running really smoothly and successfully. But because they failed to adapt and understand that they there are ways to mitigate those risks, they unfortunately had to close up their doors. Now, the same can be said for Airbnb hosting short term rentals and real estate business overall, really, really important as much as it is to maximize your upside, I would say even more important than that is to mitigate your downside.
Now there's a whole bunch of different levels to this, obviously, being invested in real estate gives you a certain degree of protection and mitigation of your risk because you own an asset that actually is going to hold its equity, or something on the pole. other end of that is something like real rental arbitrage, which in my opinion, is the most risky method that you can possibly use to be in real estate. Because you're paying a whole bunch of money out of your own pocket, there's a whole bunch of overhead, similar to how there was a brick and mortar retail, but you're not building any equity.
When you do that. At least if you own the property outright, you actually are building the building of equity or sorry, if you own the property outright, you're holding equity. If you buy the property and you're paying off your mortgage, you're contributing and building up your equity, you're renting your cash is draining out of your bank account, but you're not actually building up any equity. Sure you can be successful in it. But I would say it's not a really good option for 2020. Right now, when you look at the opportunity to mitigate your risk with something a lot more effective.
Like for example management fee model, using the management fee model for managing properties on Airbnb, you're not paying any money out of pocket for your first or last month's rent, you're not paying monthly for your rent payment, you're not paying for furniture at a pocket. There's none of that overhead expenses. It's kind of like the difference between managing a brick and mortar retail shop. Compared to managing an online store, the online store, you get to avoid all of the costs of having actual stake in that physical property. So rental arbitrage you're paying monthly, you're paying a whole bunch up front to furnish the place to get the place to begin with.
Where's the management fee model. With most properties, you can get a similar, sometimes even greater upside potential from the property without taking any of the risk without any of the additional capital outlay at the beginning. And that's point number three that I would say is really, really important right now is risk mitigation is key. Because if things are really great in the good times, but they fall apart completely in the bad times, you're it's only a matter of time before your business ultimately comes to an end. Now number four says the guests want flexibility. Now this is really specific to Airbnb management. It's really, really crucial that you know, right now more than ever, guests want flexibility.
If you look on Airbnb platform, you'll see that everywhere, you can now filter your results on Airbnb in case you weren't aware of this, based on the cancellation policy, it's one of the primary options right along the top bar. And from the standpoint of a guest if you're looking for a place to stay, and you know how quickly things can change in the world right now, you probably don't want to book a place that doesn't have a flexible cancellation policy. So as much as for from a financial standpoint, in the past, it's been a lot better to have a stricter cancellation policy right now, because it's so desirable to guess it's important that we adapt, and that we give guests what they actually want, which is a flexible policy.
Just be flexible and understanding with people in general. I think that this is this can be true and can be applied to pretty much every area of life. But especially in this business. Flexibility is really, really important to guests. And so it's important and crucial, I would say to know that. Now, the fifth thing that I would say you absolutely need to know in order to manage and grow your Airbnb management business in 2020 is that adaptability creates opportunity. This is true in so many areas of this business, like I just mentioned with the cancellation policies. Adapting to that new trend in the market is going to give you a really big leg up over the competition, it's going to give you a big opportunity.
Now there are a whole bunch of other examples of this as well if you adapt your listing, to cater to the additional concerns that guests have and the additional desires that guests have right now, and the reasons that they're actually going to be booking your place over other places. Adapting your listing can create a huge audience. opportunity for you to perform really well with that property compared to what you would have otherwise. A couple of quick examples of this often in your cleaning protocol to make sure that you're following airbnbs recommended cleaning protocol. Yes, it is a little bit of a pain. Yes, it is an adaptation from what we're used to. But it's ultimately going to help you to stand out and succeed with your business. Again, updating your listing just making it reflect the amenities and the qualities that guests actually care about right now. For example, if you are a couple minute walk to the subway, it probably doesn't matter very much to your guests, because they probably aren't going to be using the subway right now in 2020.
If you have high speed internet, if you have a really comfortable bed, if you've got some on site amenities that are actually still open and able to be used by your guests, those things are going to be really valuable. And so you want to just adapt your listing to care towards what guests actually want right now, those are just a few of the many examples of how adaptability is so so important. Really, right now, in general, again, so many of these topics can be applied to really any area of life and business right now, but very much so in this ever changing world of Airbnb hosting and Airbnb property management, adaptability creates a huge amount of opportunity. And I say opportunity, because right now in 2020, we're seeing that in recent months in parts of the US and in the US overall. In recent months, two point 20 Airbnb bookings have actually been up compared to the same time period in 2019. So there is a whole bunch of opportunity out there, if you know where to look for it. If you're adaptable, then you can really grab hold of that and use it to your advantage.
So these have been my five things that I think you absolutely need to know in order to be successful in your Airbnb management business in 2020. If you want to learn more about the step by steps of how to build this business, with a new training that I put together, specifically around 2020, what it looks like to build this business in 2020, and learning from everything that I took, and I learned in order to build this business successfully, and grow it to a six figure income.
And I recommend checking out the free training that I've linked down below, we got a free training setup that's gonna walk you through the step by step of exactly how to build this business, and be able to earn a full time income managing other people's properties on Airbnb, and in a way that really leverages all five of these things in a way where you are mitigating your risk in a way that you are highly adaptable in a way that you can take advantage of the opportunities that are out there right now. So again, that that training is linked down in the description below. So just check that out.
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