Is the fear of making mistakes keeping you from investing in an Airbnb? Do you worry about poor decisions impacting your investment? Do you wish you knew what big blunders to avoid on your journey?
If so, you need to tune into Episode 18 of the Host Coach Podcast! Today we’re discussing our 6 biggest mistakes across our portfolio of 10 Airbnbs so YOU can skip all the drama, and fast-track your success as an Airbnb investor!
Topics discussed in this episode:
- What mistakes can cost you Superhost status
- Which team member to never keep out of social obligation
- What not to do with guests during an emergency
- How to negotiate an unfinished property purchase
Host Coach Airbnb Podcast Episode 18 Show Notes:
Our first mistake we made early in our investing career, the very first summer that we had our first cabin up on Airbnb. There was a heat wave taking place, and it was August when we received a booking for one week.
We suddenly realized that our cabin didn't have any air conditioning, so we freaked out and canceled the booking because we didn't want to get a bad review. We also didn't really communicate with the guest, which was a mistake. It turns out that that one cancellation kept us from achieving Superhost status for over a full year.
So never cancel on a guest. There's lots of other ways to deal with a potential issue. Start by communicating to the guest. Tell them what it is going on. It turns out these guests were from France. They might not have been even expecting air conditioning! The other thing you can do is reach out to Airbnb. This comes up with our snow issues often where there's going to be a big storm and the property might not be able to be cleaned, or be accessible.
If you reach out to Airbnb about any unforeseen circumstances, they can cancel a booking with mutual consent and you, the host don't get penalized, and nor does the guest. So don't cancel on a guest under any circumstances. It will really hurt your Superhost status and in turn really hurt your bookings
Never Keep a Bad Airbnb Housekeeper
A second booboo that we made along the way was keeping a bad housekeeper out of social pressure. And what happened was we were restoring a four bedroom cabin on top of a mountain. It was in pretty rough shape and finding professionals or just labor to work up there was a little bit difficult. So, we ended up contracting with a local turkey farmer and the majority of his staff to do a lot of the work: staining the decks, sanding the walls, a lot of hands-on labor.
This farmer, who was wonderful to us, really wanted someone he knew to be our housekeeper. So, instead of putting out our signs like we always do and interviewing multiple people, we just went with Ralph's choice. Unfortunately, she was not a professional housekeeper and didn't do the best job cleaning the house. When the an Airbnb isn't clean, that's a big no-no and immediately results in guests not giving you a five-star review.
Guests starting to comment and leave reviews saying that our Airbnb wasn't as clean as they would like it to be. We did try to give the housekeeper a chance, coach her up, and make checklists to really help her succeed - it was a bad fit. We owned this mistake a little bit because we had the impression that no one would want to clean a cabin at the top of a mountain. In fact, as soon as we posted the signs for housekeepers wanted, we had several people ask for an interview. We found amazing housekeeper and hired her right away.
Our original poor housekeeper and poor reviews impacted our profit, and it just killed me because we put so much time and effort into making this diamond in the rough sparkle, it has a breathtaking view, it's beautiful, and my decor was amazing. But, because we made a bad choice with a housekeeper out of a little bit of social pressure and not wanting to hurt anyone's feelings, we hurt ourselves financially for considerable amount of time. It takes time to dig out of poor cleaning reviews.
So when you're getting ready to list your Airbnb interview several housekeepers. Do not go with the easy button. Do not just pick someone that someone knows. Take your time. Interview and find the best possible person who truly cares, who loves to clean, and will make it sparkling for each of your guests.
Negotiating Unfinished Construction Purchases
Next, let's tell you about the house that we bought that wasn't finished. It was supposed to be finished at closing, but turned out it wasn't. We had all the furniture purchased, we had all of our plans made, and come closing day - the house wasn't finished.
Culin ended up moving into the house to prod the builder along through the building process, which took an additional two months. He ended up living in the property losing not just the revenue we projected from putting the cabin on Airbnb 2 weeks after closing, but also his personal time of having to manage and handhold this process.
So, if you're doing an off market deal, make sure that you put a penalty for late delivery if it's new construction. We did have an agreed upon timeline with the seller. There was time built in from when we signed the offer to closing for the construction to be finished, but the builder just didn't get it done in time.
Learn from our mistake and make sure you put in some sort of clauses about payment on completion or financial penalties for delayed delivery of the home. This was our first brand new cabin, and I was was so excited about it. My parents came to visit and there weren't stairs to the upper level. You had to step on a bucket up to the hallway to get to the bedrooms and bathrooms. I was scared about my parents falling and just so mad and frustrated that we were totally ready on our end, like I moved furniture in and they were still cutting doors, and so I had to deep clean everything multiple times.
It was just the nightmare. So again, listen to what Culin said and make sure that there are timelines and penalties listed, and don't put yourself in that particular situation.
How to Handle Guests During Emergencies
Our number four big mistake was mishandling a guest reservation during a snowstorm. So for a lot of our mountain properties, we say in the listing and in our messaging that all guests need to have four-wheel drive vehicles in the winter to be able to access the property.
What we didn't say is that vehicle is needed to get out of the property as well. And so, a guest chose not to listen to our advice and ended up driving a Honda to the top of a mountain, no problem. But, then there was an unexpected snow storm and they said, "Hey, there's snow. What should we do?"
We had guests checking in that afternoon. So we asked the guests to leave as soon as they were able. We didn't hear anything back from the guest. Fast forward to multiple hours later and our housekeepers calling saying, "Hey, we can't get up the hill because there's multiple accidents." One of those accidents was actually our guest who broke the axle of their vehicle and unbeknownst to us, they moved themselves back into our cabin without asking, and the key code hadn't changed on the door yet.
And we were stuck in this limbo of talking to Airbnb, and trying to talk with the guests, saying, "Hey, are you there? Do you want to extend your stay? Should we cancel the new guests coming in?" And we're worried, are these people going to damage our home? Are they going to give us a bad review? In the end, it all worked out, but it was a really uncomfortable 36 hours.
In hindsight, in that situation, we should have told the guests, "We do have guests coming in. Let's talk to Airbnb and see if we can cancel that booking." O we could have asked to talk to the incoming guests and see if they want to delay and have given the current guests a little bit more time to leave and let the roads clear up so they weren't stuck.
Actually, I just did this yesterday. We had a very small snowstorm, but we had guests that were a little skittish about leaving a mountaintop property. I was able to give them late checkout. It ended up that they left a half hour later than usual, and our housekeeper was fine with it. The guests were happy and we were happy. And most importantly, everybody was safe.
Never Let Excitement Disrupt Your Process
Our next mistake was a piece of land that we bought. We found a lot that had absolute million dollar views. We felt absolutely in love with it,and closed on it quickly. We got excited about our plans and we started clearing the lot manually. We brought in a tree guy who cleared the views and really opened it up and we did weeks worth of work work.
We had plans to create revenue from the lot before we build a cabin on it. We created a mini wedding venue. It had a nice observation deck we put on an octagonal frame with acrylic for the bride and groom to stand in front of. It was an amazing photo op for micro weddings because it was Covid time period.
We actually renewed our wedding vows up there with an an officiant and a few close friends. We had beautiful photos and used those to create a website and we started booking micro weddings every weekend. Maybe the sixth wedding or so our housekeeper was up preparing, and the neighbor came by and said, "What are you doing? This is my friend's lot."
It turns out that we were shown a lot and purchased a lot that wasn't for sale. Fortunately, after several tense negotations the lot owner decided not to sue us. We had even had the lot surveyed. I made the mistake of not going and checking the survey pins and flags. We were so excited about this property, that we were moving too fast.
So the first mistake tactically was I paid for a survey, but I didn't go look to see what I was buying, to make sure I knew exactly the landmarks of what I was buying. I think the bigger issue, the bigger takeaway is we're going to get excited about properties and making plans and all the great things and falling in love. But, we put the cart before the horse, so to speak, and we let that excitement about the property cloud our process. It's okay to be excited, but make sure that you follow your process, follow your due diligence, and don't let something sneak between the cracks.
We've been Airbnb investors for several years across many properties and have made lots of mistakes. We're human. So even though we have a podcast, a book for Airbnb investors, and we coach people, we've made mistakes. We're recording this podcast to help you not make these mistakes!
Don't Be Shy About Being an Airbnb Investor
I told neighbors that we would love to buy their house. I loved this house. It has a slanted roof. It's just cool and interesting. It's in a neighborhood that we invest in heavily. But (here's the mistake) I didn't say that we were Airbnb investors because I didn't want to seem pushy and I didn't want to get a little side eye if those neighbors didn't want Airbnbs in their neighborhood.
That was a big mistake, because fast forward three weeks later. We receive a text, because we exchanged numbers. "Hey, do you want to buy any of the furniture out of our cabin?" And I asked, "why?" "Oh someone came and offered us $200,000 for our cabin and we couldn't believe it. So we accepted." And I texted back, is it signed? We'll give you $250,000. And they were stunned but couldn't accept my offer.
I own this mistake. I was afraid to say we were investors, and I was afraid to seem pushy. And because I didn't say. "Look, we'll buy your house whenever you're ready. If you get an offer we will pay more." we didn't get that cabin. And I drive by it all the time and they painted it blue, the new investors, and it's perfect. It is hard for me to look at it.
So, if you're interested in a particular property, be upfront and say, "I'm an Airbnb investor and I would love to buy your house anytime you are ready. If you get an offer, I will give you more." You don't have to say what price, but you tell them that you will give them more. And that gives you the in to become the investor that wins, not the one that drives by sad every day
The Mindset for Handling Airbnb Investing Mistakes
To recap. Mistakes happen. They happen to us, and they're going to happen to you. Never getting into an Airbnb investment because you're afraid of making that mistake is a terrible way to live. We didn't let any one of those mistakes we talked about today stop our journey or our investing. As entrepreneurs, we live by the motto: fail forward.
We did our best with these situations, and most importantly, learned from the mistakes so that we would make them again and suffer the same consequences. And now, you won't either!
So there you have it. You now know six big mistakes to avoid as a new Airbnb investor. By learning from our investment errors, you can skip them completely! This helps you become a Superhost and start cash flowing from your Airbnb sooner. You also know the mindset to help you move through mistakes and learn from them, not be paralyzed by them. If you want to start Airbnb investing and simply need to know how to do it, that's what this podcast is for.
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.
