AirbnBUST Will Destroy Airbnb Hosts & Investors

Airbnbust will destroy airbnb hosts and investors

Let’s be real: The “AirbnBust” thing doesn’t apply to everybody. And it doesn’t have to apply to you. Here’s what’s happening.

It’s a clever phrase, sure. But it’s a term all about fear. 

“Investors” bought at the peak when everything was great, rates were low, and everyone was traveling locally.

But then what happened? International travel opened up, rates went up, and discretionary spending went down.

Now, these “investors” who took the word of their agent on their $1M property are sweating.

They haven’t had an Airbnb or Vrbo booking in 30, 60, sometimes even 90 days. 

That’s a lot of carrying costs to manage on a monstrous vacation home.

In today’s video, I break down exactly how we got into this position – and how I’ve been saying for years that this exact thing would happen.

We also discuss the true nature of Airbnb. Unfortunately, not everyone is feeling the same amount of pain. 

And finally, we discuss how you can avoid this whole mess.

And better than that, you can capitalize on this market. 

After all, we’re to be greedy when others are fearful.


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Expand Transcript

What’s up guys? The time has come where finally I must address the topic that’s everywhere right now AirbnBust. There’s a lot of people right now we’re talking about how horrible is to be an Airbnb manager or investor how everything is plummeting. Nobody’s getting bookings. It’s doom and gloom. It’s basically the apocalypse for air b&b. So what’s going on, I want to share my take. I’m sure that for any of you guys who have been checking out the channel been subscribed for a while been watching my videos consistently, you’ll know my stance on this, you’ll know what’s going on. But for anyone who’s new here, I want to fill you in. This is something that I’ve largely been talking about for years now, it’s literally been years that we’ve been talking about everything that people are just now starting to realise. So if you’ve been following along, and you were able to see the writing on the wall, congratulations, you that is amazing, I’m sure that you’re faring very well through this. If you’re new or you haven’t been paying attention, then this video is for you. We’re going to break it down and share with you exactly how you can make sure that you avoid what’s going on the market right now and actually take advantage of this really good opportunity

So to start with Airbnb bust, what is it? What’s everybody talking about? Well, for starters, they’re talking about the fact that there’s a whole bunch of hosts that are experiencing what they are calling a basically just a dry spell for Airbnb, meaning they’re going 3060 90 days without getting a single booking on Airbnb, and they’re calling this air b&b Bust. They’re saying that Airbnb and short term rentals have just completely gone bust. There’s no more demand. It’s completely dried up. And so basically, sell your farm, sell your house, sell everything you’ve got run for the hills, liquidate and just get out of the market. Well, yeah, sure, you could do that if you made a bunch of mistakes early on that led you to be in this position. But for anyone who’s been following along and doing things strategically, it’s probably a very different story. So essentially, what’s happening here, and the reason that people are all doom and gloom and kind of Apocalypse worst case scenario about this is a combination of different factors that have been basically brewing over the last couple of years. So to start off with what happened was in 2020, there was this thing, the pandemic that happened, and that meant that people couldn’t travel internationally. And when people couldn’t travel internationally, what did they do, they travelled domestically, there’s a lot of people doing staycations. So when they couldn’t take a flight to Europe, they were taking a drive out to somewhere in North Carolina by a national park or something like that. Now, years ago, we talked about this when it first started happening, that we saw an explosion of popularity in markets around national parks, more kind of staycation type markets. And so we saw that and we saw, okay, in 2018, and 2019, we were kind of progressing like this. And then in 2020, well, suddenly, we shot way up, and 2021, we largely stayed up there. But we knew all the while that the good times had to end eventually. And then we had to come back down to reality. Because eventually international travel would open back up, people wouldn’t be confined to the country they live in, they’d be able to travel internationally. And so we knew all the while that nothing was going to stay up here long term that we were going to come back down to a point of equilibrium. And just kind of keep on that steady upward pace that we’ve seen for years and years and years. What’s actually happened though, is that a whole bunch of people went and bought in up here, and they thought that things were going to stay up here, they just didn’t do the right due diligence. If you’ve watched my breakdown videos of how we analyse properties, you would have seen that I like to look back at 2018 and 2019. See what happened between that and then 2020 and 2021. And whenever I’m doing my analysis, I like to assume a worst case scenario, that going back to 2018 2019. And being 50th percentile mean, the property is only doing average back in those years. And then I look at the worst case scenario, I see. Okay, will I still break even on the property, whereas a lot of investors, they weren’t doing that they weren’t protecting their downside. They were just looking at the upside potential on a property if it just kept doing these crazy, crazy numbers, year after year after year. And they went, Yeah, let’s go and buy that property. So there’s a lot of uneducated investors that were buying the wrong properties, getting bad deals, and even people that weren’t doing any due diligence at all, I can’t tell you the number of stories. I’ve heard of people that went and bought a million or $2 million properties based on their realtor telling them that it could bring in hundreds of 1000s of dollars on Airbnb, they didn’t even look at the numbers they didn’t even check. And so people were being irresponsible not doing their due diligence. And now we’re seeing the repercussions of that, where things have come back down to reality, just like any rational analytical person would have predicted, we’ve come back down to reality. But those investors that bought at the top hoping the good times would never end are now panicking. They’re freaking out, because obviously that was never going to happen. And now they’re being forced to sell their properties. So that’s one aspect of what’s going on with the Airbnb bust is that people just didn’t know what to expect. They had really unreasonable expectations they bought high. Now they’re kind of screwed. And to cap it all off, their expenses went up because interest rates rose and so now they’re in a really, really tight space. Now the other thing that’s happening right now is that there is a constriction in the market, right? The economy is doing some crazy stuff, lots of people are constricting their spending, so there’s less overall demand for recreational travel. Now what happens when that happens is that 80% of the market feels a lot of pain. 80% of the hosts on Airbnb are going to feel a lot of pain, the top 20% of hosts don’t feel nearly as much pain. What other what a lot of people think happens when people stop spending as much on things like Airbnb is that everyone right across the board feels an equal hit. And that could not be further from the truth. The reality is that if you have 100 properties available and 100, people looking to book, every property gets booked, because there’s just as much supply as there is demand. And then if you have more demand, then everyone gets booked even faster. And so that’s what was largely happening and 2020 and 2021 is that everyone was getting booked, and you didn’t have to know what you were doing. But then what happens is that when suddenly there’s 100 units of supply, there’s 100 properties available, but only 50 people looking to book at any given time, then only 50 of those properties are getting booked. And so a lot of you will think that everyone suffers equally well, no, that’s not what happens. The bottom 50% of the market, the ones that have the bad photos on attractive listings, they don’t have good reviews, those ones get zero bookings and the remaining 50, you get all the bookings. And so what happens is, even on a larger scale, there’s only 20 units of demand, then the top 20% of the market gets the lion’s share of all the bookings. And then the bottom 80% gets breadcrumbs, they get pieces, they get nothing at all, almost. And in some cases, they literally do get nothing at all. And we’re seeing host posts about getting zero bookings for 3060 90 days. Well, why is that? It’s because they’re the lower performing of the market, right. They’re the ones that aren’t getting anything eat. Meanwhile, there are other people in that market. I guarantee you, I’ve actually looked at the data, there are other people in those markets that are getting booked. And those are the people that have really great photos, really great listing headlines, really great listing descriptions. They’ve done a good job of SEO and optimising their property. They’ve listed on multiple platforms to get more traction, more views on their listings, they’ve gotten really good reviews, and they have a data driven pricing strategy. They’re actually updating and managing it actively to adjust to the changes in the market. The people that are just setting it and forgetting it and haven’t done a good job, just kind of half thing half did things well, well, they’re not getting any bookings, those ones are the ones that are sitting vacant. So ultimately, Airbnb bust Airbnb bus is this combination of different factors where a lot of people bought properties, they had no business buying. And then there’s other people that bought properties that they maybe should or shouldn’t have bought. But they’re just being lazy about it. They don’t know how to optimise things. Because things were really easy for the last two years. And now it’s getting more challenging, and people just don’t really know what to do. And the opportunity that’s in that for anyone watching this video is that there’s a whole bunch of opportunity out there for you to grab, right, there’s still a whole bunch of demand, you just need to know what to do to grab it. And so if you’re struggling right now, if you own an Airbnb, a short term rental, and you’re struggling to get bookings, you just need the right strategy to be able to get those bookings because there is still demand in the area. If you’re curious, if you doubt me, then just go on air DNA, you can see the actual numbers and see that people are still booking properties, look at the numbers for yourself. And then the question becomes how do I capture that demand instead of letting my competition capture it. Now if you don’t own a short term rental, or you’re looking to buy more, this is an incredible opportunity. Because as Warren Buffett always says, you want to be fearful when others are greedy, and you want to be greedy when others are fearful. Right now, people are fearful. Airbnb bust is a term specifically for that fear, people are running for the hills, people are scared to invest money because of inflation. People are scared to invest money in real estate because of rampant interest rates, people are scared to invest in short term rentals because they see that the economy is going the wrong way. And interest rates are going up. And it seems like the worst possible thing to invest in. And that is when you want to invest in it. Because that’s when people are giving these things away all the people that bought wrong and can’t afford to hold their property, they’re being forced to sell it. Now we want to go and grab those properties, the properties that people are scared to buy that literally a year or two ago, they were going for bidding wars and going for 150% of what they’re asking, now those properties are sitting on the market, and the sellers are having to drop their prices and give buyer incentives. So what you want to do is sweep in and buy the right properties at this time, when now you know, if you run your numbers properly done, you do your due diligence, you checked out other videos on this channel and the trainings that we have to offer. And you know that you’re running your numbers, then you can confidently know that those properties are going to perform really well even in a low season even in a worst case scenario. And you can go and buy those properties for much less than what you could have bought them for a year or two ago and have them perform really well. Now the advantage of doing that is obvious, right? You number one get to invest your money into a hard asset that protects it against inflation. Number two, you get cash flowing, you get cash flow from that asset that covers all the interest expense. You’re not the one paying for the interest. The guests are paying for the interest and you get steady cash flow. You can get 15 20% or greater cash on cash return on your money investing in short term rentals. And you got to do this in a really really cool space where you’re actually buying vacation homes that you can go and hang out in. So Will everyone else is freaking out and being fearful, now’s the time when you really want to be greedy. So I hope you’ve gotten some value from this. I hope this opened your eyes to what people are talking about when they’re talking about Airbnb bust, and what the underlying factors are, they’re going along. And I hope that in the future, you can see the writing on the wall for things that are coming around the corner. We’ve been talking about this stuff for years on the channel, and I shared as well, like I bought a property, I was one of the people that did buy properties throughout 2020 and 2021, when things were going absolutely crazy, and those properties did insanely well. And I was obvious, I was very transparent with the fact that there was almost no way those properties will continue to do as well as they did in their first years in subsequent years. And no surprise, they’re not doing as well this year, but they’re still doing incredibly well. Overall. I bought a property two years ago now for about 580,500 $20,000. And then we put about $60,000 and renovation into it did $150,000 In its first year, it netted about $90,000 in one single year. That’s insane. And I shared with you guys on this channel that that was crazy, and that we were really only expecting to net about 60. And big surprise this year, we’re netting about 60 to 70 is where we’re going to end up.

So has it done poorly by no means absolutely not. It’s netted $60,000 a year. That’s still amazing. It’s still a fantastic return. Is it as good as the 90,000? It did last year? No, obviously not. So as long as you’re buying the right assets, they can still do exceptionally well. As long as you buy the right asset. If you make a mistake and you buy a bad property, then no matter what happens, it’s always going to be an uphill battle to make that property perform well. But if you buy the right property at the right time, then performing on any season is kind of a walk in the park. So if you’re interested in learning more, check out the links we’ve got in the description down below for our free trainings, make sure you subscribe to the channel to stay up to date with the two new videos we post every single week. Drop a like on this video if you thought it was a good take on this if you appreciate the insight If you got value from it or if you just want to help me grow the channel just hit that like button. And with all that being said, I hope you enjoyed this video and I’ll see you in the next one.

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