Airbnb Management VS. Airbnb Investing

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What's up guys, it's James here and in today's video, I'm going to talk about managing airbnbs bees for other people versus purchasing them and investing in properties yourself.

Now I've done other videos on this channel where I've talked about the difference between managing people's properties on Airbnb versus right rental arbitrage or you rent the property. I've done other videos talking about why rental arbitrage overall is a terrible business. But I haven't done a video yet talking about the differences between managing other people's properties versus actually buying them yourself and managing your own properties or hiring a property manager to manage the properties that you own.

And recently, I've had a few people ask me what I recommend they do what they should do first, if they should buy a property and then rent real estate and then listed on Airbnb first, or if they should start out by getting experienced managing for others, you know, what I recommend? What are the pros and cons? What are the major differences.

So that's what this video is going to address I'm going to talk about now, as well, I want to remind you guys that down in the description down below this video, you're going to find two links. So whichever kind of pick your path you choose from this video, you're going to have some support and some resources, they'll be able to help you to get started on either one of these two paths.

So if you watch this video and you think to yourself, wow, I should really start managing other people's properties. Does it make sense for me to buy right now, I should go and I should start managing other people's properties. And you want to learn exactly how to do that step by step, get all the tools, support, guidance, resources, all that that you need to turn this into a six figure business for yourself and start building up some real income to be able to quit your nine to five job, I highly recommend that then you click the link in the description down below that has that free training.

You'll see it down below, there's a link to a free training that's going to show you exactly how to do that how you can earn a full time income managing other people's properties on Airbnb, like I said that train is completely free. So I'd highly recommend checking that video out if that's the decision you make is that you want to start going more down that path.

Now on the other hand, if you decide from watching this video, that buying is the right choice for you that you actually should invest in a property purchase a property for short term rental. And there's going to be another link in the description down below that we're going to talk to you about, you're going to be able to actually book a call with me where we can talk about how I can help you to start investing in properties the right way for Airbnb and make sure that your first second third investments are a knock out of the park.

You want to make sure especially when you're getting started with investing when you're starting investing in short term rentals, for example, you want to make sure that first property is a real knock out of the park, because that's going to make it that much quicker and easier to then move on and get your second, your third, your fourth, and really reap the rewards of that compound effect with you get that you get when you invest properly.

So again, if that's the path that you choose, and you're ready to start investing, I highly recommend that you click the link in the description to schedule a quick 15 minute chat with me. And I'll talk to you more about how I can help you to do that. I'm going to work with a really small group of students over the next six months here, teaching them exactly how step by step helping them to analyze deals, find the right deals, execute on them, start managing themselves or hire them out to a property management company. And just overall how to get an insane ROI on investing in short term rental properties.

So that's for you that make sure you schedule that quick 15 minute call, while I've got some time here in my calendar. So all that being said, let's now dive into the meat of it. And let's talk about the pros and cons and when you should use either strategy, because these are two strategies that I actually highly recommend. And there's a good way to do both of them in unison. So my recommendation generally is that if you have the money set aside, that you can invest in short term rentals, then it's definitely a good decision to make investing your money in real estate to start out with is a really great mix of active and passive.

So you know, you're always going to get a higher yield from your investments, if you're more active on them. Assuming that you know the investment is actually a sound one, obviously, you can go and pour a whole bunch of time into a terrible investment and it's not going to pay off well. But if we look at the major differences and look at, you know, why does real estate tend to perform so much better than the stock market, for example, over the long term, it's because you are actually adding value to the equation.

Now if you just go and put your money into a stock, you're you literally just having your money work for you. And that's why it's the only really, truly passive or I should say the most passive, you still have to go and find this stock or pick the stock, but you can even just go and invest in an index fund. And that's generally the best way to do it anyway.

So that's really passive. You're really just making money from your money, not from your time or your skills or your expertise, or just real estate investing, and especially short term rental real estate investing, you're making money from your money, which is great because it gives you leverage, right? But you're also making some money from your time, your knowledge, your expertise, right because you're going and finding that right product. Already that other investors aren't seeing, you're going and maximizing it, you know, doing some renovations potentially setting it up.

So it'll perform well. And you're then using your expertise to go over this is actually a good property for short term rental, let's go and put it there. Let's use it in a way that most other people wouldn't think to use it where other people would may move into the property, or maybe they've used as a long term rental, you're seeing that opportunity.

Now that is value add, right? There's a value out there where your expertise is actually making you money. So is it as passive as just dumping your money into an index fund? No, absolutely not. But you're going to definitely way outperform that index fund. When you look at the ROI, you're going to get assuming that you do it the right way with the right systems.

And again, in order to do that, you can just check out the link down below schedule a quick 15 minute chat with me, I'd love to talk to you more about all the ins and outs of that. But that's generally My recommendation is hey, if you have the ability, meaning you have the money for the down payment, the closing costs renovation potentially, now some of that money you can get a loan for so for example, the renovation costs and the furnishing costs, but you want to make sure that you have about 50 $60,000 set aside, in order to actually purchase that property.

Now, a lot of people have access that money and don't realize it and love, you'll have that equity tied up in their home or somewhere else. So but generally, if you have that money set aside, if you have that money that you can use to invest, then that is a great way to get started simply because you are going to be leveraging your money to work hard for you. So it's not purely just your own time knowledge expertise that's getting a return, it's also your capital. So that just gives you leverage means you're going to get to where you're going a little bit quicker. So that's one really big thing.

Now the other thing you need to have is the financing capability. But there's lots of different options for getting financing on a property no matter where you're located. So that's generally the option I recommend to people if they have the capital to get started investing. Now, on the other hand, what if you don't have that capital, a lot of people don't have I know, when I first started, I certainly didn't have 50 $60,000, I had a negative account balance in my bank account. So when you're first getting started, if you don't have that money set aside, then managing properties on Airbnb makes a ton of sense.

Now the reason for that, and that's not the only time I'm also going to talk about when it makes sense to balance the two in tandem with one another. But generally, if you don't have that money right out of the gate right now, then a great way to get that money to build up additional income that you can use to funnel into a down payment for a property is by managing other people's properties on Airbnb.

Now, again, there's a training link down below that will show you exactly how to earn a six figure income doing this is a serious money. And very quickly, you can have that money set aside. So you can go and put it into investing or you can use it to quit your job or whatever your goals might be. But one of the really great advantages of managing people's properties to start out with is it now you start to see for yourself firsthand which properties are doing the best you get to really develop those skills so that you can make properties perform.

And more than anything, you get that insider look into what properties are actually performing the best on short term rental and which ones are performing the best, but are actually really cheap to buy. That's the real big piece. It's almost like insider trading, you get this insider view on exactly what's working what the best investments are going to be.

So then when you do have that money set aside, you can deploy it on exactly the right property and get a crazy knock out of the park winner. I've talked about in other videos, one of the most recent purchases I made. And that was a purchase that no one else saw the opportunity there, that property sat on the market for 90 days over 90 days. That means no one saw that opportunity for over three months. And then I came in saw the opportunity pounced on it, and now it's making a killing. So that's what you have the capability to do.

Now, that's a really nice benefit to managing properties. The other really cool piece is that when you then go and own the properties, you can then manage them yourself and then make additional money from doing that. Now when you go and buy to start out with you kind of have two options. Number one, you can make this a very passive investment long term. And that's what a lot of people like to do.

Hire a management company and make this investment relatively passive long term short, when you're buying the property, analyzing it, there's some involvement. But managing can be completely passive if you just hire and put a management company in place. And as long as you select the right one, which again, I'm happy to walk you through how to do that in a quick 15 minute chat, then that can work really, really well. If on the other hand, you do choose to actually start managing these properties yourself, then again, you're going to build up the systems that you would it would just make sense to leverage them into managing a few of other people's properties.

Because now suddenly you have a reliable cleaning team, you probably have a maintenance person, you've got some systems built. It's just a natural to then go and say well, why don't I use these systems. And tools and resources that I have, and use them to manage other people's properties. Because now suddenly, you can make additional income from those systems and leverage them to a much greater extent. We all know that eventually you no matter how much money you have, how much income you have, you can only take on so many properties each year by buying them yourself.

So naturally, if you already have the system set up where you can manage these properties effectively, and you can make 10,000 $20,000 additional per year to manage someone else's property for them, then why not plug that into your existing systems, now, suddenly, you're going to have that system spitting off additional cash flow, and it's going to mean that just that much more quickly, you can go off and buy the second, the third, the fourth property, and again, reach that real hockey stick curve that comes along with compound in your growth over time.

Now, you'll hear me talk about this in this video quite a bit, and in all my videos quite a bit is hitting that compounding period. That's really what you want to do as quickly as possible when it comes to investing. This is why the rich get richer, this is why the first $100,000 or million dollars is the hardest for people is because you're not leveraging compound to the same extent, once you reach a million dollars, it's just a 10% gain to get from there to another $100,000. Whereas to get from 100 to $200,000, that's 100% gain, right?

It's easy to go and find 10% gains, but it's a lot harder to go and find opportunities that are going to give you 100% gain. So you really want to reach that hockey stick inflection point as quickly as possible with your investing. And so that's why I recommend really leveraging these strategies in unison to maximize the amount of cash flow you're spitting off.

Now, if the priority is to be completely passive, then yeah, hiring a management company can make a lot of sense. And there's still a really great model there as well, you can still make a really great investing return by doing that. And it also makes sense a lot of time to maximize your overall cash flow. By doing things a little bit more actively, it really depends on what your individual goals are. Ultimately, both models managing other people's properties and investing in properties yourself make a ton of sense. And they work really, really well in unison together.

So I hope this video has been really valuable to you. I hope this has answered that question if you're wondering it for yourself. And also, I hope that you take the time to either go through that training that's going to show you exactly how to manage other people's properties on Airbnb, or you take the time to schedule a quick 15 minute chat with me so we can talk about how I'd be able to help you in investing in properties and actually purchasing an Airbnb.

You want to make sure you get the right start whatever direction you choose, you want to get certain the right path so you're not wasting your time and taking longer and longer and longer wasting more money more your resources to get to that end goal.

So make sure you leverage one of those tools that are both linked in the description down below. If you like this video, give it a thumbs up, hit that like button and make sure you subscribe. I really love seeing the subscriber growth on this channel. I want to make sure it continues and I can see from looking at the backend on YouTube that a ton of you guys who watch these videos are not yet subscribed to the channel.

So make sure you take a second click that subscribe button there. Make sure that you stay up to date with the channel because I'm posting two new videos every single week and I want to make sure that you stay up to date. If you have ideas for other videos that you want to see on the channel. Let me know in the comment section down below and I will see you next