How to find GREAT DEALS on Airbnb properties
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In this market, should you wait before you buy again? No. We’re still putting in offers. In this video I’ll share with you two huges mindset shifts on finding great deals in your market.
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AIRBNB FOR DUMMIES:
Interest rates are going up. Inflation in the US is setting records and home prices in Canada are always in the news.
Home prices might have leveled off (or at least cooled slightly) but how long do you wait?
The answer is you don’t.
When you’re in a market, you should be able to keep buying no matter what’s happening out there.
It comes down to what you’re comfortable with. If you grew up with 10% interest rates, what we have now would seem like a steal.
But you’ve been following the market with lower interest rates than we’ve seen in a long time.
So the increases seem like too much.
The real answer? If the numbers work, do the deal. These changes in the world only mean new numbers.
The trick then becomes how to find great deals in any economic climate.
I’ve got two ways you can do that.
Both of them boil down to where and what you’re looking for.
The goal is to reduce competition in your property hunt. Which makes sense. The fewer that are fighting for a property, the less bidding people do.
And the fewer middlemen you have, the less it’s marked up as well.
If you’re nervous about the market and buying right now, watch this video.
What's up guys, it's James here and in today's video, I'm going to be talking to you about how to find really great deals on buying Airbnb short term rental properties. Now before I dive into this, I want to remind you a few things. Number one, make sure that if you do like this video, if you get value from it, make sure you hit that like button, make sure you also subscribed to the channel to stay up to date with the two new videos we post every single week. And if you have thoughts, questions, comments, anyone share with me, let me know in the comment section down below. Now the one last thing is that we do have a free train that's linked in the description down below for exactly how to invest successfully in short term rentals. So if that's something you're interested in, if you're currently investing and you want to scale things up, then make sure you check out that free training, it's gonna walk you through step by step by step by step exactly how we invest successfully in short term rental properties. And we're gonna give you our analysis spreadsheet and some tools completely free. So all out, it's completely free, make sure you check it out link is in the description down below. And you'll also be able to schedule a free strategy session with our team for us to lay out a roadmap for you customs specific for you on how you can succeed with short term rentals. So make sure you check that out link in the description down below. So let's start talking about how you can find a really great deals on properties. Now on one of the properties that we bought about a year ago, we were able to negotiate over $100,000 off of the asking price, and not was a year ago, you know, we're in 2020. Right now, that was 2021, when real estate prices were absolutely skyrocketing interest rates were at the absolute lowest. And so properties were going left, right and center for way over asking. And they are going you know with huge bidding wars, all this other stuff. And we got this property for over $100,000 below list price on a good property that property I've talked about in other videos here. And we brought in over $150,000 in bookings in its first year as a short term rental property. And we also had, you know, about $150,000 In appreciation on that property in the last year after doing just a bit of renovation work. So obviously, this property is a great property, we got it for a great deal, how can you do the same. Now there's a couple of things that you'll want to be doing. If you want to find really great deals on Airbnbs. Number one is going to be looking for properties that other people aren't looking for. So that means looking for properties that are not necessarily as attractive to other people that are buying in the market that you're buying in. For example, we bought our property in a cottage location. So for anyone not familiar with the idea of a cottage, it's basically just somewhere that people from the city go to escape and get out into nature get away from the city for a weekend or whatever. So they're really popular around here around Toronto, where we're based. And so people like to get away to cottages now, if they're buying a cottage, they're buying it for relaxation, they want to get up there a few weeks or a few weekends at a year and relax. And so they're looking for something turnkey, they do not want to buy a property they have to do renovation on because renovations don't tend to be synonymous with relaxation for most people, right, they find that sub stressful, so they want to buy something turnkey. Now the other really big piece for for people in that market as they want to buy something right on the water, they want to be waterfront with their own dock so they can own their boat and their CD and everything and have it docked right there. And so if we look at that, and we go, okay, if we want to go and buy a turnkey property, where there, it's right on the waterfront, then we're going to pay a premium for that, because there's a lot of other buyers that aren't going to be using it as a short term rental that are going to be attracted to that property are going to be bidding on it. And so we're going to end up getting into a bidding war competing a lot more and ultimately just paying a higher price. Whereas if we look for properties that other buyers in the market aren't looking for, we might be able to have some more room for negotiation. So what we did is we looked for a property that needed renovation work number one, and that was actually ideal for us because that way we're able to do $60,000 With the renovation and force over $150,000 worth of appreciation above and beyond what we paid plus the cost of renovation work. So we were able to get $150,000 worth of additional value out of this property additional return out of this property in year one. We did a cash out refinance, pull all of our cash back out so like from that aspect, it's absolutely fantastic that we were able to to buy a property that needed renovation. Now the other side of it is that obviously we weren't competing with people as much because you know, the cottage buyers, they didn't want to buy that property that need renovation work. The other piece was that we bought a property that was right across from the water. Now for us for short term renting and for using it as an Airbnb who cares people can walk across the street drop their kayak and drop their paddleboard and whatever you know they can go and have fun and go swim whatever they want to do. The only downside is that they can't dock a boat or a CD or something right they're at the property but no Airbnb guests is coming with their boat or their CD or anything like that and being the dock at the property. So for a cottage owner that is a deal breaker they need it to be on the water because they have a boat and they want to dock it somewhere right? But for an Airbnb guests really doesn't make any difference is the difference between walking into your backyard and walk into your front yard to go and access the water really no big deal. Now, we then obviously got a lot more room for negotiation, because again, there's just a lot less demand for that type of property. But ultimately, we're paying lower property taxes because we're not right on the waterfront. So tip number one for finding really great deals on short term rental properties is looking for properties that other buyers in your market aren't looking for. This is the example of what properties are what people are looking for in the market that we invest in. But for you, it's going to be a little bit different, a little bit unique. And so you want to find ways that you can still add all that value to guests and have a really attractive short term rental property. But without necessarily buying the properties there in the highest demand for other types of buyers who are likely going to be buying more emotionally and paying higher prices. Now, the other tip is to look where other buyers aren't looking. So tip number one, find properties that other buyers aren't looking for Tip number two is to look in places for properties where other buyers aren't looking. So looking on the market is great, because it's super, super convenient to just go on MLS go on realtor, and just look for properties, you've got all kinds of photos, you got all kinds of selections. So it's very, very convenient. And because of that everyone looks there, right? You know, 95%, probably even higher than that of the transactions on residential properties happen through the MLS, they haven't on the market. And so if you go there, you're competing with all these other buyers. And you're also paying a 5% premium to pay for the realtors to satisfy their commissions. So all in all, if you're buying a half million dollar property, you're probably paying 50,000 Even $100,000 more for that property because you're buying it on the market where there's way more demand for that property. And so that's going to drive your prices. And then you're also going to be paying a 5% premium on that property $25,000 just to pay the realtors, right just to pay the realtors to broker the deal. And you're paying $25,000 For that, which is absolutely insane. And so absolutely can find great deals on the market, the deal that I just talked about was one that we actually found on the market, surprisingly enough. But the another really great strategy for finding really great deals is to look where people aren't looking. And so that means buying off market. Now what that basically means there's a few different strategies and ways that you can find off market deer deals, whether it's through wholesalers or finding your own off market deals. There's all kinds of strategies for that, again, if you're interested in learning more about how to find off market deals, and even just how to negotiate deals, so you can bring the price down, get the best deal, find the best properties, all that stuff, there's a link in the description, like I mentioned down below, it's going to walk you through step by step by step exactly how to do that. But basically what this means is that you're buying a property that isn't yet listed with a realtor on MLS or whatnot. And so you're basically interfacing directly with the seller of the property, which is the property owner. And so because you're interfacing with them directly and cutting out that middleman, there is no 5% Commission. Now a lot of people think that in order to buy a property you need to work, you're the real realtor legally, and you absolutely don't. Realtors are basically just like used car locks, right, you can go and sell your car back to the dealership or to the used car lot and then have them resell the property or broker a deal between you and the buyer of the of the new vehicle. Or you can just put it at the end of your driveway, put up a for sale sign and then sell it yourself, right? Yes, there's some paperwork that you need to do, you need to have a contract written up. But all of this stuff is very template, you don't even need to hire a lawyer for the actual writing of the agreement of purchase and sale, you can do that all yourself, you just need to have a lawyer for the closing documents and whatnot. But you have to have that anyway, even if you are working with a realtor, if you're familiar with that process, you still have to hire a realtor. So or sorry, hire lawyer.
So either way, as long as you just know what documents need to be filled out really doesn't take long to fill out an agreement of purchase and sale, it's templated it's very straightforward. There, they can't the template can't even be adjusted, you can just add to the schedule a Schedule B, whatever it is, and adjust the pieces of the template. So really, it's straightforward. Again, we can walk you through the step by step on how to do all of that. But that means that you're cutting out the middleman and avoiding that 5% commission that on a $500,000 property equates to $25,000. So it's not a small chunk of change that you're cutting out. And ultimately, I think that a lot of people just don't really think about that because they you know, realtors have this, this, you know, they like to tell everyone that you're not paying for us we're a free service, we get compensated by the seller or whatnot, but at the end of the day, you're paying a higher price because the realtor is getting their commission. And so if you can cut that middleman out then that's obviously very beneficial. The other really cool piece about buying properties off market is it you are the demand you are the only person that seller is likely going to be interfacing with or one of very few people that seller is going to be interfacing with as opposed to getting all this distribution by being on the MLS having a realtor that's pushing it out to people and so that way there's gonna be way, way less if not no competition from other buyers for this property now means that you can get a way better deal because you're not fielding offers from left, right and center and all over the place. And there's a few different reasons that we can get into in more detail in another video as far as why sellers actually want to sell their properties off market and not go through the headache and hassle and timeline of going and selling their property on the market. But it really can be a mutual win win situation where you get a great deal on the property, the seller gets it closed up nice and easy for them, and then everybody wins. So those are my top two tips for finding really great deals on short term rental properties is number one, finding properties that other buyers in your market aren't looking for. And number two, looking in places like off market where other buyers aren't looking and so you're interested in learning more about the step by step and getting some of our tools and our guidance Elving us having us help you put together a roadmap for successful short term rental investing, then make sure you click the link in the description down below to check out our free training make sure you check that out grab the free tools that we'll be able to give you and learn more and be able to you know really succeed with this and cut down your timeline for doing so. Again, if you liked this video, give it a thumbs up make sure you hit that like button it helps me out tremendously with growing this channel so I really appreciate make sure you subscribe if you haven't already. I know from looking at my stats that a lot of you guys that are watching these videos are not yet subscribed, so make sure you hit that subscribe button so you can stay up to date with the two new videos we post every single week on this channel. And last but not least, if you have any comments, thoughts, questions, anything you want to share with me just let me know in the comment section down below. With all that said, Have a great rest of your day and I'll see you in the next video.