Airbnb Hosting vs. Co-hosting vs. Investing

(00:00) as you’ve probably seen online or heard all over the place there are a variety of different ways to get started with Airbnb some of which require you to own properties and some of which you can do without owning any properties in this video I’m going to break down the main key differences and some of the pros and cons of Hosting your own spare space on Airbnb versus co-hosting and managing other people’s properties versus rental Arbitrage or investing in properties and actually owning properties
(00:32) [Music] now I’ve done all four of the above if you can imagine over the last 10 years I have co-hosted properties I’ve hosted my own space I’ve done rental Arbitrage and I now own some properties that I rent short-term and in our new community and program B&B tribe we talk about all those different Avenues all those different things we go in depth and give training and guidance to hosts co-hosts investors property managers all over the place so safe to say I’ve got some experience that I can share with you if
(01:04) you’re interested in getting started or looking to scale with any of these models or even transition from one to the other and I’ll share with you in the order in which I did them because it is generally what I recommend for most people when they’re getting started now what I first started with was essentially what we would call house hacking or rent hacking where I moved into an apartment that was larger than what I needed it was actually a three-bedroom property and and I’ve done that a couple of times since over the
(01:32) years and then I basically would rent out one or two of the spare bedrooms on Airbnb now the great thing about this is that I didn’t have to own any property all I had to do was rent a property and although it was an additional expense because I was buying a or renting a bigger property than I would have otherwise needed it was rent that I was already going to be paying to live in a place because everybody needs a place to live and at the time I didn’t own a home home and so this is a really great way
(02:02) to get started I was able to rent the property in my spare time on Airbnb and I was able to completely offset all of my rent expenses and actually earn enough to cover all my grocery bills in any given month now the other really great thing about this is that it gave me so much Hands-On tactical experience with hosting and it also allowed me to do everything myself because I was right where I live there was no commuting to go do cleanings anything like that there was no additional expenses it was very very profitable very very efficient now
(02:33) the downside of that strategy is that number one it doesn’t scale obviously there’s only one apartment that you really need and you’re not going to want to go and get a 13 bedroom apartment just so that you can rent the spare room it’s going to be a lot of work the other downside is that let’s face it you’re sharing your space with strangers which is a ton of fun at certain points and also annoying at other points which is the exact reason why I no longer do that it’s just really nice to have your own
(02:59) private space and not to need to share it with other people now it’s not to say that you can’t do it occasionally and have that be a fun additional income but when you have to do it all the time just to make sure that you can cover your rent expense it’s really not that much fun it takes a lot of the fun out of it that being said I met some really really cool people doing this some people that I’m actually still really close friends with to this day so it’s a really fun and cool way to get started and it can
(03:24) definitely work out well for the right type of person are you a brand new or experienced airbn host co-host or investor who wants to host as successfully as profitably and with as much fun as possible if so then I would love to invite you to check out BNB tribe Linked In the description down below this video it’s our exclusive Community for Airbnb hosts investors and co-hosts from all over the world where I share some of my best trainings that go into detail on every single aspect of Airbnb hosting from A to Z we’ve got
(03:59) advanced playbooks that will help you to use more advanced strategies to take things to the next level and make more money and have more fun hosting co-hosting or investing on Airbnb you’re also going to get access to an incredible community and over $2500 worth of deals perks discounts bonuses that I’ve negotiated with other vendors in the short-term rental industry so if you want access to all of that and a whole bunch more check out the link in the description down below for B&B tribe and I would love to se
(04:28) you on the inside now the next thing that I transitioned into from doing that was I did some rental Arbitrage I actually rented some other properties and just flipped them right on to Airbnb sometimes we’d rent them out by the room but for the most part we would rent them out as the entire property all at once and the advantage of that is that I could scale Beyond just the place that I lived in but that was pretty shortlived it actually went quite well we made good money but I started to see the writing on the walls with some of
(04:56) the big fatal flaws that I tend to warn people about with rental Arbitrage nowadays which is that you’re constantly reinvesting your cash flow to grow the business you might rent a property and then make some profit on it after a few months and then you go and you want to like live on that profit but that means that you can’t grow your business because to add another unit you need to go and pay first and last month’s rent furnish the property up and so you have this kind of Snowball Effect where
(05:21) you’re building this bigger and bigger snowball which is really great but the risk there is that number one you don’t actually get to reap the rewards of your properties until you stop growing but more importantly if ever something happens you’ve gone this snowball so big and now suddenly the city passes regulation or your landlords don’t want to renew their leases well now you can kind of be left in this situation where you’ve worked so hard to build this snowball and you don’t actually get to
(05:47) reap any rewards and actually realize any of your profit because at the end of the day you’re not building any Equity there there’s no ownership all those rent expenses that you pay every month you’re just going out of pocket it’s just money that’s being flushed down the drain and so it could be a very risky very cash flow intensive business to operate and so for that reason we really hit it big on some great properties they did really well and then we started transitioning into co-hosting the other
(06:13) thing that I really like about co-hosting as opposed to rental Arbitrage is that with rental Arbitrage by the time you spend first and last month’s rent security deposit and you furnish the property you’re probably going to be anywhere from 10 to 12 to even 16 or 18 months just to break even on on that property just to get back to where all those initial Investments are paid off and you’re actually profitable which is a long time to work on hosting that property just to get back to where you started just to get back to break
(06:41) even and so with co-hosting the benefit is I mean there’s lots of them right number one you can scale the business as much as you want there’s no real limitation to how far you can grow the business because you don’t have to keep pouring cash in in order to acquire new properties with co-hosting you’re going to a property owner and instead in of saying to them hey look I’m going to rent your property and then flip it onto Airbnb you’re saying hey look let’s run this property on Airbnb together you
(07:08) take 80% of the revenue I’ll keep 20% and I’ll do the heavy lifting now the exact percentages might vary sometimes you’re going to be 25 or 30% management fees depending on the market but the great thing there is that I don’t have to spend any money out of pocket to get this property up and running I can never lose money on the property because if I’m earning a percentage of Revenue then 20% of zero if the property sits completely vacant all month is still just zero it means I don’t make any
(07:36) money but I’m certainly not losing money there’s also really great upside for the property owner which makes it really nice and easy to get Property Owners on board and your addressable Market grows because not only are you looking for properties that you can take from long-term rental and convert them over to short-term rental but you can also go and approach people that are hosting their own spaces already on Airbnb and go hey look I’m going to take over everything and take all that work off of
(08:00) your plate and I’m going to systemize it make it nice and passive for me but I’m just going to do a way better job for you managing it for you take all that burden off your plate and charge a management fee so it can be really really effective to grow that now I grew the rental Arbitrage up to five six properties that were doing really well until I started transitioning over to co-hosting and then we grew the co-hosting to about 35 properties at its peak now the really nice thing there is that it provides consistent cash flow
(08:25) you’re delivering really great value to the property owners you work with so they tend to want to stick around and refer you to other people so it’s really really great relatively easy business to actually grow from a customer acquisition standpoint because of how many referrals you tend to get and this is not just my own experiences I’ve worked with about 700 other co-hosting businesses helping them to grow and get started and the uh the referrals tend to come in pretty consistently right across
(08:49) the board after you get past that 2 3 4 property Mark so it’s a really really nice business and the downside is that comparing it to investing if you actually buy the property there’s no more middleman there so you can make more money you’re also building equity in the property because instead of paying uh money to the property owner for them to pay down their mortgage and build equity now you’re the one building equity in that property every single month when you pay down that mortgage and you get to leverage appreciation so
(09:16) you can just do a lot more with a lot less you can make the same with just a handful of properties as you would with many times more doing co-hosting and you get all this long-term wealth building and you get full control because let’s face it when you’re working with customers when you’re working with property owners they have certain needs and requirements and there’s extra work that you’re doing to go and get those properties and then to maintain open lines of communication make sure everyone’s happy all the expectations
(09:43) are met and you just don’t have to do any of that when you own the properties yourself so that’s what really attracted me into actually investing and buying these properties let alone all the other cool benefits like being able to add adus and get creative with the properties and do renovations to force appreci ation and all these different really cool strategies so needless to say I got into investing and actually purchasing properties and then now I actually sold the property management company years ago and now I just solely
(10:10) manage my own properties and it’s honestly a whole lot of fun this is the most fun that I’ve ever had with hosting but it is obviously a journey to get there not everyone’s in a place where right away they can actually afford to go out and buy a property which is why I recommend to a lot of people when they’re just getting started and they don’t necessarily have the funds for a down payment is to either get started hosting their own space or if they’re ambitious enough and they want to to get started
(10:35) co-hosting for other people because it can be a really really great way to build up that experience and build up that cash flow that’s going to allow you to get into investing really successfully now you absolutely can get right into investing if you have some money set aside that you want to invest in real estate and short-term rentals can be a really really great way to do that but if you don’t then probably the best entry point for most people is going to be co-hosting uh because it’s just really straightforward easy to get
(11:00) started you don’t take any money out of your own pocket to do it and that’s why we built this community for B&B tribe all around helping people with all these different methods because there’s so many different strategies you can deploy to start growing on Airbnb and make really great money make anywhere from $1,000 extra a month to 5,000 10,000 20 $30,000 a month if you really want to and so I wanted to create a community where we could help people to do that and where we could all learn from one
(11:27) another where hosts could learn from co-hosts could learn from other investors and people that were curious about different areas or different strategies could learn all that and we could learn all these Advanced strategies like getting direct bookings and email marketing and using AI for guest communication and so that was really the thought Pro behind creating this really cool Community around all this because there are just so many ways to get started now if you do want to learn more about that community and all
(11:52) the training we’ve got in there the incredible community of other people there’s a link down below for you check out tribe we made it super accessible so that it can be affordable and and accessible to everyone because we really want this to be an open Community for as many people as possible there’s going to be a link down in the description down below if you want to check that out and learn more but hopefully this video is giving you a really good idea and understanding of the main differences
(12:15) and kind of pros and cons amongst the different strategies for Airbnb because there’s again just so many that you can choose from hope this video helps to clarify the main kind of differences between them now if you’re new to the channel here make sure you hit the Subscribe button hit the like button on this video If is helpful to you I post two new videos every single week on this channel and I’m really really thankful that we’ve been able to grow this channel to now almost 8,000 subscribers
(12:38) at the time of this recording and I’m really looking forward to Growing it even further and helping you all out even more with your Airbnb and short-term rental hosting co-hosting investing and with all that being said I hope you have a fantastic rest of your day and I’ll see you in the next video right