Are you curious about how much money you can make from Airbnb investing? Do you wonder if the cash flow is really enough to change your life? Do you wish you knew what to expect so you were motivated to get over your hurdles and start your Airbnb investing journey?
If these questions sound familiar, you need to listen to Episode 29 of the Host Coach Airbnb Podcast where we reveal the many facets of financial freedom that you can create through Airbnb investing.
Read on to understand the real financial numbers and the real-life changes that happen at each of the three tiers of short-term rental investment. You'll also gain an accurate picture of what is possible through Airbnb investing for you and your family!
Topics discussed in this episode:
- What to expect investing in the 2024 market
- The 3 tiers of Airbnb investing
- Realistic cash flow numbers for each Airbnb investment tier
- The 5 facets of financial freedom achievable through Airbnb investing
Host Coach Airbnb Podcast Episode 29 Show Notes:
It's surprising how many times we hear this question: How much money can an Airbnb make and how can that change my life or current situation? What does that look like in real life? We've been asked by so many different people, from so many backgrounds, that we decided to dedicate this episode to exploring that topic as we jump in.
Let's start with a little background. We got started in 2017. We had a family cabin that wasn't used on Airbnb. Famously, Danielle asked me the question, "Are we going to put this on Airbnb?" And I responded, "No. What are we going to make a couple of hundred bucks?"
Well, it turned out that we did end up putting our cabin on Airbnb sort of at request of friends. And, from the moment it was listed, itbegan cash flowing a thousand dollars a month. This is after our mortgage and all of our expenses. So that was real cashflow. That was kind of like the fun bit.
So we have this place now we're not paying for it and we're getting an extra thousand dollars a month - cash, which goes pretty far in rural Virginia. We could go to the petting zoo and to the brewery and all these different places, and it gave us family time. So that was our very first Airbnb experience.
Our Infancy as Airbnb Hosts
We didn't know what we were doing as Airbnb hosts and certainly didn't think of ourselves as Airbnb investors. The things that we talked about in this podcast, we didn't know any of that stuff at that time. But, we were enjoying it as a family anytime we wanted. And, we had some walking around cash. In 2018, we've previously told the story about my career crossroads, we ended up deciding to get more involved as Airbnb investors.
So, in 2018, we scaled to three Airbnb units, and still didn't really know what we're doing. But those three cabins began cash flowing $5,000 a month. This is when I got excited and started to get serious about the tools and processes, because I knew that there was more opportunity for growth there.
Having a few Airbnbs, let Culinn test his different pricing theories and different software tools to see what worked and what didn't work. It's hard to do that A/B testing if you just have one property.
So we were starting to get a feel for how to be successful Airbnb investors and in 2019, we had four units. Our original cabin, plus the three that we acquired - and we were cash flowing $10, 000 a month! This is after all of our expenses. This is after everything. And now I'm getting even more excited because that's becoming real money.
Airbnb Investing and Cashflow in Today's Market
So what does this mean for you, our listener and 2024 market conditions. First, the market has changed. This is now post COVID. 2017 to 2019 was all kind of pre COVID. And COVID changed the demand for getaway properties. People are working from home., but they're realizing they don't have to work from their homes. People's tastes in travel have changed to less cruises, less big resorts. And there's been a fundamental shift towards smaller family getaways.
Additionally, Airbnb in 2017 was in its infancy. Well, let's call it a toddler stage, but in 2024, they're full on rocking and rolling. And so the platform has changed and evolved.
The 3 Tiers of Airbnb Investing
As we thought about this episode and how we might be able to break this up from our story to answering the question for our listeners is, we asked ourselves what are the stages in today's market, and what's the cashflow look like in each of these stages? We came up with three tiers.
Tier 1 of Airbnb Investing
Tier one is: I want to have one property and what's that going to do for me? A cabin, in today's market, you're looking at netting $3,000 a month or so in cashflow. And that's what I would call relief from current financial pressures.
What that makes me think of is there's this extra money if your car breaks down, a major appliance breaks, you are sick and have to take a couple unpaid days off of work. There's now this little buffer for the oopses of life that if you don't have that buffer can be incredibly stressful, A, when they happen and B, if you just worry about them.
For some people, that's their goal for financial freedom, right? Some people, , are looking for that one property and that extra bit of cash flow. They have a second place to stay that's fun that their family can get away to. They also have extra money coming into the bank to cover the what ifs and oopses of life. Like Culin said, that's some people's definition of financial freedom. The more we talk to people, the more we realize there's endless definitions, which is also really fun for us as coaches.
Tier 2 of Airbnb Investing
However, people do tend to get excited about those potential cash flows. And that brings us to the second tier, and the second tier is around three properties. In today's market, that cash flow looks like approximately $10, 000 a month. At that point, you really start thinking about covering your core fixed expenses and costs. Things like your mortgage, your car payments, student loans, the big bills that come in monthly.
Imagine if you didn't have to pay them out of your paycheck. Imagine if the place that you enjoy going to covered all of those expenses. That's an entirely different level of financial freedom that gives you an offset of money for things like vacations, being able to bless your family members with gifts that you normally couldn't, or help out family members who may need a little extra financial support from time to time.
Tier 3 of Airbnb Investing
The third tier is the seven property portfolio, well seven or more Airbnbs. And at seven, you're looking at $20,000 to $22,000 monthly cashflow, which is enough to cover all your family expenses. When we hit this teir, we realized I didn't have to work at a software company anymore. So we used the financial freedom to move to Greece and it gave us geographical freedom. We could live anywhere! We could travel anywhere and expose our son to what it's like to live in another country and learn a new language and be an immigrant. So when he comes back to the United States, he's a better human being.
And that's a grandiose, crazy idea because that's how I live, but, that's something that is completely possible in this tier three bracket. And so that dovetails really nicely into talking about the types of freedoms that can be attained through Airbnb investing.
Freedoms Gained Through STR Investing
So first one's really easy. It's the freedom of choices. As you have cashflow coming in that isn't tied directly to your profession, it gives you the freedom to change jobs. You may not be fulfilled in a particular role, and you could take a step back, take unpaid leave to interview for your dream job and not be pressurized about it.
You've got extra money to go on vacation or take a couple of your family members on vacation. You could potentially send a child to private school. Dan Spahr from one of our previous episodes said he had never intended to send his son to private school, but having the cash flow from his beach properties gave him that ability. So when that opportunity arose and his son really wanted it, he was able to say yes. And that was something he never expected to be able to do in his lifetime.
Another thing is freedom of schedule. This is where you could potentially just quit your job. Culin's cousin is a social worker and she said, "As we grow to two or three Airbnbs in our portfolio, maybe I don't need to be a social worker anymore. It's a job that is important and I love doing it, but I can't do it forever because it's, it's hard and it's a lot."
You could have the freedom to work part time, you could take a step back and take care of small children or elderly family members. You could volunteer more. One of our good friends, Ginger said, "I don't necessarily want to travel more, but there are causes that I am deeply passionate about, and I would love the freedom to not be in the office nine to five and to be able to be on site and volunteer more."
Another freedom, which was actually brought up recently on a podcast we were on is: freedom of soul. What that essentially means is deep inner peace, knowing that cashflow coming in. So you're basically unchained from your desk. You're no longer guilty if you're not at work.
That's the freedom that really what hit me when I got into Airbnb investing and starting to understand financial freedom. I had had other startups. I had different ventures that made money, but I always had a certain anxiety about making money. Prior to getting involved with Airbnb investing, in every other job that I've had, if I was leaving the office for lunch or to run an errand, I had an anxiety in my gut to get back to the office, to get back and supervise what was going on. I lost that anxiety through Airbnb investing.
Why We're Passionate About Airbnb Investing
We have so many friends who are in real estate in some form or fashion, and they're always worried about generating the next lead and finding the next deal. You eat what you kill. They're on this hamster wheel. And while it's exciting and it's fun and profitable, at some point, most people would love to take a sidestep. To get off the wheel, be unchained from the desk, be at peace.
Because as an Airbnb investor, even if you're at your child's soccer match you're still have cashflow coming in. You're not missing out on providing for your family because that's happening in the background. That's why we're so incredibly passionate about what we do and part of the reason we have this podcast is to teach you not only how to invest in the tools to use, but also to give you this information to set you free!
So if you're sitting on the fence and thinking, "I kind of want to be an Airbnb investor, but I'm not sure." Well, If you want to make money and not be stressed out all the time, here you go. This is the impetus to get off your butt, get over the hurdle, and get started!
The Freedom of Giving
There's also the freedom of giving. For so many of us, it's really important to give. It's part of who we are. It's part of what we were created to be. So if you're finding it hard to tithe, or if you have a cause you wish you could give more to, to make a greater impact, having cash flow on top of what you currently make makes it much easier to give and to give freely with a happy heart.
Our old pastor used to say "The Lord loves a cheerful giver." and I think he does. And so this is one more way to change the world in a positive way.
The last freedom here is the freedom to retire differently. Preparing for today's podcast. We sent some texts and emails around to some of our coaching clients. I got a particularly great response from a friend/client. He was a mortgage broker, and I want to read it to you. And he says, my ultimate goal is not to have to adjust my lifestyle at retirement. If anything, I'd like to be in a position where I can spend a little bit more now that I've got this downtime.
All too often, I see retirees who have millions saved, but as they adapt to retirement and start using these funds, they get into a position of fear where they have fear to spend the money , or fear of running out of the money. They wind up living this ultra-conservative lifestyle after spending 30 or 40 years in the rat race because they are afraid of running out of money.
I refuse to be that person. I want to build something that continues to feed my lifestyle over time. And this is one of my many vehicles that's going to do just that. I thought that was so powerful. Fear of retirement wasn't one of the fears we came up with planning this podcast, but it was just such a great response from someone in the community about how investing in an asset like a short term rental property can alleviate that fear, not just during retirement, but in those years heading up towards it.
We have many coaching clients that are retiring early. We have people that are retiring, making more money than they were making before they became investors, which is the best-case scenario. So I think that's an incredibly powerful statement about retiring differently, not being like, "Oh my gosh, worked my whole life to save this amount."
My dad is this way a little bit. He's calculated out how long he and my mom can live before he's consumed hsi retirement savings. He needs an Airbnb, but I get it. And so it's just one more freedom to not worry about that and to be at peace.
So there you have it. You now know what to expect from each Airbnb investment in terms of cashflow and how that money can impact your life. Decreasing external stresses while increasing your personal freedoms. We could all certainly use more freedom. So please use this episode as fuel for your investing journey and share it with anyone you know that could benefit from being unchained from their desk.
Remember, our joy is in your success. Should you need personal online Airbnb coaching - that is what we do! Sign up for a free 30 minute Airbnb coaching call to explore your needs and how we can help you succeed as an Airbnb investor.