50+ common Airbnb questions - FAQSep 21, 2023
If you're considering entering the world of short-term rentals and Airbnb, you likely have a multitude of questions.
Whether you're new to the game or looking to fine-tune your strategy, getting answers to common inquiries can make a significant difference.
That's why I've compiled a comprehensive Airbnb FAQ guide, bringing together answers to over 50+ frequently asked questions, exclusively for you.
In short, it has all the answers you need in order to start making money with STR and Airbnb.
This page will be updated with more common questions so be sure to bookmark it for later.
Here you go:)
How did you handle doing Airbnb when you had a 9-5 Mon to fri before going full-time?
We started with 1 apt and made sure we enjoy what it means to become a Airbnb host. Don't quit till you replace your 9-5 income, which can happen very quickly. For us, it took less than 2 years. Hire a great cleaner and a few handyman contacts, set up all the technologies which will allow you to manage remotely through your smartphone without you being there
What is the best way to start?
The best way to start is lease arbitrage if you have no to little capital. You can leverage business credit to build a strong portfolio and cashflow. This also allows you to gain experience and confidence before buying an Airbnb property.
What market would you go to for first Airbnb right now?
If it's your first Airbnb, I'd pick one that's within driving distance to where you live.
Since it's your first property, there will be a lot to learn and you'll find 'safer' to start.
Candidly, the hardest thing is to do is start so make it as easy as possible to get to YES!
Buying a cheap cabin in mountains OR leasing an apartment in a city for airbnb?
Whatever is the easiest for you to get started.
It's a tough question to answer. You have to underwrite the opportunity to see what's the comparative returns.
Where should my first purchase be? I live in Tennessee.
Your hometown, where you went college, or where currently work/ live.
You know those areas the best and have a network there to help you if you have problems.
I inherited a property in another country- how can I turn it to an Airbnb?
- Research on Airdna to see if it's a good market
- Check the local laws and regulations to make sure it's legal
- Just get started. Furnished it right, take high quality photos, and list it on airbnb!
What are your thoughts on Houston or Austin as places to purchase property?
Austin is a great market and highly profitable but be mindful of the local laws.
Houston is tougher unless you have something special about your Airbnb
How do you feel about renting a camper for Airbnb?
I think it's a great idea. I've never done it so not the right person but I know several successful operators of Airbnb campers.
Check out @jeremywerden on Instagram.
He has a super cool Airstream that cash flows very well.
What about an Airbnb in the philippines?
Airbnb's can be successful anywhere! PH has great destinations
How many properties do you run and in what city?
We have 26 properties in Philadelphia and Smoky Mountains National Park in Tennessee.
Any advice on how to build business credit faster?
Put everything on business credit cards and pay them off at the end of the month.
We never carry any credit card balances or pay credit card interest.
Tips on finding cities to invest in and cash-flowing AirBnb's?
Use Airdna and find cities where the demand growth exceeds supply growth.
It is pretty straightforward on Airdna to search for demand with supply growth? Need to pay for an account?
It's straightforward. Yes, you need a paid account.
Start with cities you're familiar with - where you grew up, went to school, have relatives.
What is the best way to find demand vs. rental growth on AirDNA for a specific area?
The way to find healthy markets is to look on AirDNA and look at where demand growth, exceeds supply growth.
What are avg cleaning expenses as a % of revenue? i.e. revenue+ cleaning fees 10k/month What are cleaning costs on your expense line?
Cleaning fees should Avg between 10-12% of gross revenue (rate + cleaning fee). Exclude tax and Platform service fees
Is Arbitrage in all of your properties? What's your goal? 2x for every property?
You want to get a minimum of 2.25x revenue to rent.
We always aim for 2.5-2.75x. Larger units 2br+ are more profitable.
Have you noticed 2B:2b units to do better than 1B1B?
We only do 2 Bedroom / 2 Baths.
1 bedroom Apt and studio compete w hotels and it's bad competition for us.
How accurate are AirDNA comp estimates vs actual when prop goes live?
AirDNA gives you an average so 50% of properties will be higher or lower.
You have to think critically if your property is better or worse than the Average and then adjust your revenue projections accordingly.
What's the best way to invest into your first property if you don't have much money to start?
If you have less than $5k or lower than 600 credit score, I would start w cohosting to build cash.
If you have more than $5k + good credit, I would start w rental arbitrage.
What percentage do you pay on tax annually?
In 2021, our federal tax rate was 2%. We deferred 98% of our federal tax liability through bonus depreciation.
In 2022, we should be around the same rate.
How much (aver) do you invest in remodel and how long should the contract be to payback?
For the rental arbitrage strategy, our payback period is usually between 4-7 months after
Payback period = (investment cost - value of concessions) / monthly profit
What are the key things you need to run a successful AirBNB business in your opinion?
1) Finding markets with attractive supply/demand characteristics
2) Underwriting your properties using data to project revenue and expenses with precision
How to make money with lower occupancy?
Make sure you capture enough ADR (average daily rate) during the weekends during periods of low occupancy during the slow season.
Do you ever Airbnb separate rooms in larger homes?
Yes, for our first ever property in 2017. We realized quickly it was more profitable and scalable to Airbnb entire properties instead of rooms.
Do you prefer owning a property or arbitrage when doing Airbnb?
We use both strategies (arbitrage + buy/self-manage) in different markets and combine smart tax planning to increase our after tax free cash flow.
We call it the AFLAC Method and it's helped us tremendously in growing our Airbnb business and real estate portfolio.
Do you start setting prices low in November and set minimum of 30 days as a strategy?
Yes, we started lower setting monthly pricing to get bookings during our low season around Thanksgiving.
We didn't see much upside in waiting so acted early to front-run the other hosts.
Do I do short-term rental or long-term rental on a property I own or plan to buy?
You need to do research
You need to actually underwrite the market, underwrite the property.
Go on AirDNA, look at the revenue, look at the ADR, look at occupancy rate, look at seasonality.
There’s like 5 or 6 factors you need to look at and put that together in a financial model and see how that property performs versus a long-term rental.
Do I go with a cleaning company or find a cleaner myself when I launch in a new city?
If you plan to scale to ten, twenty units you might as well bite the bullet and find someone now to work with directly. If not then a cleaning company is fine.
Hostaway. Used them since 2019. DM me if you want an intro and save $400 off the setup cost.
What's your costs per investment per Airbnb?
Depends on the size of the property. For arbitrage, the rule of thumb is $10 per square foot so if it's a 1000 sq ft apartment,! you should be spending around 10k. We want our properties to be at least in the top 80th percentile so we invest more upfront. we've seen the ROI and
it's much much better than spending just 5-6k to have a commoditized product.
Best company legal setup when you have a partner? Protect from an inability to pay rent?
LLC with no personal guarantee is the best setup. With partners with bad credit (there's a reason they have bad credit, right?), it tougher. Consider having a reserve account of all the profits to protect yourself.
How to protect your personal assets from Airbnb business?
Multiple LLCs and alot of insurance!!
How do you evaluate deals?
I evaluate deals first by looking at the market.
Looking at the market health and then we look at individual properties.
Then put it through our underwriting process.
We use AirDNA and look at revenue from multiple angels, figure out the cost, what is the investment into the property, and what is the payback.
In my course, we lay out exactly how I evaluate deals, how I find markets informed by my 10 years of investment banking experience.
DM me happy if on IG if you want know more.
Pricelabs or Airbnb Smart pricing?
Airbnb Smart is WAY too low.
You'll never make any money.
Should i put a 20 or 50% down payment on my first short term rental property?
It depends on your personal risk tolerance but we put 10-20% down for the 6 properties we own in Tennessee
Favorite lock to use?
Schlage encode locks are the best locks.
Why you ask?
1) doesn't require a separate router which increases complexity
2) durable and stands up to commercial use
3) intergrates well with remote-lock and Hostaway.
How do you control the air conditioners?
Wireless thermostats. We use Honeywells generally. Nest are too complicated for the guests we've found.
Do you think certain markets such as Philly, Houston, DFW are over-saturated?
It's not what I 'think'.
I look at the data, analyze and interpret it on AirDNA using my models, frameworks, and experience.
You could DM me 'ANALYSIS' on IG if you want to learn more specifically how.
Hot tub or no hot tub?
100% yes if you own the property.
Is there a resource where we can read about the str laws?
Google the name of the city or town and short-term rental regulations. You'll find all the info you need from this search. Will take some research and digging through.
Should I look to purchase or focus on arbitrage? I have a decent nest egg saved.
I would do arbitrage first to learn the business and scale it to 5-10 units before I buy. There are BIG tax advantages in doing both strategies.
This is the exact strategy I've used to build my business and cash flow.
What is the initial setup cost individually? E.g LLC, pms costs etc? Upfront cost?
Less than $500 in total. DM me the word GUIDE for my free setup guide.
Do you have a checklist for items needed to get started?
Yes I do. It's a 8 step guide you can do in 1 week. Link below
Do you ever consider using a company like Vacasa?
No, you don't need a third-party manager who will charge you 20-30% of gross revenue.
It's very doable by yourself and this is what I've done and can teach you how to do.
If I take your course would I be able to operate in any country (Dubai) or it is specific in the USA?
The course applies to any market worldwide.
The concepts and strategies to find market, analyze properties, and setup units can be definitely. used in Dubai.
This is the course by the way: https://www.strlikethebest.com/
Apartments or houses for a start in arbitrage and which is faster to scale?
Apartments are faster to scale but houses are easier to start since most single family landlords are small business owners and more flexible.
Are homeowners insurance ok with short term rental?
Generally regular homeowners insurance does NOT work for Airbnb.
You'll need Aircover or a different policy to protect yourself.
How can I do this as a Canadian with an EIN but no SSN in the US?
You do NOT need a social security number to do arbitrage in the USA.
Is there a difference in strategy if you own the asset or is it an arbitrage?
Yes, the acquisition strategies are different.
Simple framework -
1) arbitrage is for cash flow
2) buying is for cash flow and asset appreciation
Always trust AirDNA data? What if unique property with no comps around? Can be 1st?
I trust the Airdna data because I've talked to the people at the company so I know how the data is collected and processed.
I also compare them to my own properties and they are usually within 3% of my actual numbers for me to double-check their work.
How do you acquire an arbitrage in a large apartment complex?
There are a number of things you need to do to be effective pitching these larger complexes.
Simply put, you have to convince them you're a professional operator, you will pay your rent
on time, and you will take care of their property.
Moat Airbnb-friendly city?
Houston and Detroit have the friendliest STR regulations of any big city in the USA.
However, there are many other important factors to consider when picking a market.