The BIGGEST Mistake Investors Make with Airbnb

What’s up guys, in today’s video, we’re gonna be talking about the number one biggest mistake that I always see investors making when it comes to Airbnb investing. And I’m also going to share with you how you can make sure you avoid making that mistake. This is a one mistake that you absolutely don’t want to make, because if you make it, then there’s really very few ways to recover from it. But if you do the opposite, and you avoid making this mistake, it makes your whole investing journey a whole lot easier. And this is finding the right property, I see a lot of investors making the mistake of not doing enough analysis and enough due diligence, when they go and actually look for a property to buy. People don’t even research the market that they’re going to invest into all the time, I hear people coming to me saying, you know, I want invest in this market. Because I’ve got family there, I want to lifestyle asset there, I like to travel there. And that’s all well and good. Truthfully, there are lots of really great markets. And you can find a really great property in even more markets. But you don’t want to invest in a market just because of the lifestyle purposes. Just because you have family in that market doesn’t mean that you absolutely can find a good property there, that’s actually going to give you a return on your investment. And so I see investors too often just thinking about things too much as a lifestyle asset and not as an actual investment. And the big thing I want to highlight here is that if you are going to go and buy a property as a lifestyle asset, that’s okay. But just make sure you’re going in eyes wide open to understand what the actual cost of buying that property is going to be compared to if you were going to buy an actual investment focus property. And more often than not, it just doesn’t make a lot of sense. More often than not, you’re going to be sacrificing a lot to buy this subpar property just because it’s in the area you like and it’s a property you like and it’s not going to perform well, you’re going to lose out on a whole bunch of returns that you could have gotten had you invested in a better property, just so you can have a week’s worth of vacation a year which if you just buy the property with higher returns, you can easily use the additional money to rent another place in that area for a week a year, and still get a lot more money and a lot more benefit. That’s just my two cents, but overall lifestyle acid or not, it’s still super, super important, more important than most investors realise, to buy a property that is the right property and really do your due diligence early on when you’re first analysing deals and looking for which property to buy. What I always like to tell people is that if you buy the right property, you can make a lot of mistakes on everything else, and still come out ahead. But if you buy the wrong property, you can often do everything after that perfectly and still come up behind. So that’s why I say there’s not a whole lot of ways to salvage making a mistake on this, you really are kind of just forced to sell the property. And often you’re gonna be forced to do so at a loss if you just bought it. And so that’s obviously not what we want to do. We want to be going out buying the right property. And so how do you make sure that happens? Well, first off, you need to be careful and selective that which market you choose to go into understanding the regulations and understanding which types of properties perform best in that given market are really, really important. A lot of people hear me talking about the cottage properties we’ve got the bigger properties we’ve got. And just assume that that means buy a property, that’s a cottage property or buy a larger property. And that’s not true. That’s not a good blanket statement. There’s no one size fits all rules when it comes to real estate investing or any other form investing. Like everything, there’s variance here. And so depending on the market that you’re in, and why people travel to that area, that’s what’s going to determine what type of property is going to actually perform best buying a condo in a metro area might make a lot of sense, a one bedroom property could actually do really well. There’s a lot of business travellers coming in a lot of couples coming in for a weekend getaway, that sort of stuff. Whereas if you buy that one bedroom property out by the mountain, it might not do as well, it may, right there might be markets where it works. But if you think about your buying in a market where most people are going with their family or group of friends, then a smaller property might not really work that well. Similarly, if you buy a large property that can house a whole bunch of people in a business district where very few people are going to be travelling with other people in their group, mostly they’re just gonna be travelling solo, and that larger properties probably not going to do that well there’s probably not going to be a whole lot of demand for those extra bedrooms. So it really does depend on the market that you’re in and specific pockets of that market that you’re in which type of property is going to perform best. So first and foremost, pick the right market and pick the right pocket the right type of property within that market. And then Step number two is you need to make sure that you really find the best property because what I always tell people as well as that you know just finding a really great market and there are lots of we work with air GNA and have access to their best places to invest report which they released quarterly and that tells us a whole lot of different pockets that are really really strong investing markets for short term rentals. But what I tell people Was that in a great market, there’s still going to be good and bad deals. And in a bad market, there’s still going to be bad and good deals as well. So it really does come down to that actual deal level analysis to make sure that you’re actually making the right allocation of your money, you’re investing in the market. Sure. But more than anything, you’re really are investing in that specific property. So you need to make sure that one’s win. So how do you do that? Well comes down to really knowing your numbers on that specific deal. I’m a big, big proponent for you, as the investor, the person putting in your hard earned money that you need to understand the numbers behind the investment. So I see people all the time just going to big property manager companies like evolve or bitcasa. And just asking them for a projection on how much the property can bring in and what they spit out as a number right now, you don’t get to see the data that went into that you don’t know where they’re pulling that number from, you don’t know how realistic it is. And so as an investor, you just can’t possibly trust that one unreliable source for that information, because you don’t know where that information is coming from. And you can’t parse it and figure out is that a worst case number is that a best case number,

so at best, you’re going to lose out on deals that you could have bought, because they’re under evaluating how much the property could bring in. At worst, you’re gonna buy the wrong property entirely, because they told you they can perform at $70,000 a year. But really, it can only do $50,000 A year, because they messed up on their analysis. Now, that’s obviously not what you want. Like I said, I’m a proponent for you as the investor, you’re putting your hard earned dollars in this property, you better be darn sure that you actually understand the numbers behind that analysis. So there’s lots of great data resources out there that actually have real data for how well properties are performing. It’s not someone’s gas, it’s not someone’s projection, and it’s not anecdotal, you don’t want to go to someone in that market and ask them how well their property performs. That’s one single unit and that sample size, it’s not reliable data, you want to look at an aggregate view of all the data. And then from there, you can dial in on the specifics to see what you know, properties perform like when they’re more qualitatively similar to the one that you’re looking at. And so using tools like air DNA, or STR insights, or all the rooms, we can actually get a really clear picture of how the property should perform. And even super importantly, as well, what the historical looks like, I’ll get to that in a minute, we want to be able to get a really holistic view of how the property should perform based on the averages, not just looking at one or two properties in the area. And then from there, we can then dive in and look at individual properties and see if they prove or disprove our analysis. The only reason we do that is because if we’re looking at a sample size of all kinds of four bedrooms, there’s a chance that our four bedroom isn’t really a good representation of the average, maybe it’s way nicer than the other four bedrooms in the art area. And so we should be projecting that higher, maybe it’s not as nice as the four bedrooms and the property. So we should be projecting a bit lower. And so we really just need to take all that into consideration and factor that in when we’re making that final decision of whether or not to invest in that property. Guys just want to take a quick break here to say that for those of you watching, who want to build cashflow, and long term wealth by purchasing Airbnb and short term rental properties, there’s a link in the description right down below for a free training that will walk you through my exact strategy for investing successfully in Airbnb ease. Now, if you’re not ready to actually buy properties, and you want to get started managing other people’s properties on Airbnb the same way I got started and build a full time income managing other people’s properties. There’s actually another free training linked in the description down below as well, there’ll be a really great fit for you. So whether you want to invest in short term rental properties and actually build amazing cash flow and long term wealth by acquiring the assets, buying the properties themselves, or you’re looking to earn a full time income managing other people’s properties on Airbnb, we’ve got some awesome trainings that are linked in the description down below, that will definitely help you out. When you sign up for the trainings, we’re also going to send you a few other tools and resources completely for free just to help you get started. Again, the links to sign up are in the description down below. And both trainings and all the tools are completely free. So make sure to register for the trainings, links in the description down below. The other thing we want to look for at this stage is what the actual worst case scenario is so that you know that even in a worst case scenario by looking at the data that you are still going to be cashflow positive on the property because like I’ve talked about numerous other videos here on the channel, the worst case scenario that we really want to avoid and eliminate entirely, is being in a cashflow, negative position where you have to take money out of your earned income every year or every month to pay for the property expenses. That’s no way to build wealth. What we really want to be doing is having positive cash flow that helps us save quicker so we can scale faster and reach that point that most people are aiming for replacing their full time income a whole lot faster that can literally shave years off the timeline to do that if you do this the right way. Now, I mentioned earlier about looking at historical and that’s another big mistake that I see people making when it comes to finding the right property and doing that analysis is that they don’t actually look back at historics. They don’t look at how well their property did last year, the year before that three years ago, four years ago, five years ago. And that’s a really, really big mistake to make, especially right now in this market, there are some different pockets where Airbnbs are still performing as well as ever, there are other properties where they’re year over year, this year compared to last doing a whole lot better. And then as I’m sure you’ve seen all the kind of fear mongers out there on YouTube talking about, there are absolutely some markets that have collapsed year over year. And they’re not doing nearly as well as they were last year, the year before that. Now, no surprise to any investor who actually looks at this data, we knew that those markets were going to come back down. And we can look at and in most cases, I would say over 90% of cases, the numbers this year are comparable to or better than the numbers from 2019 pre pandemic. And so some markets kind of skyrocketed up and then drop back down and are back in line with what’s normal, very, very few markets shot up and then skyrocketed down to like below the previous numbers, that very rarely happens. But a lot of people are projecting up here still, even though numbers have dropped down back to what’s reasonable here. Other markets shot up, and they keep going up. And they’ve still maintained there. And others are just trucking along as normal. And so it’s just really, really important as an investor to look at the historical data for how well properties have done in the past so that you can predict how well they’re going to be doing in the future as accurately as possible. Ultimately, as investors in any scenario, no matter what, we are not fortune tellers, we can’t predict what’s going to happen in the future. And so we are relying on our data on our analysis to project what is actually going to happen in the future. And the best way that we can do that is by looking back at historical data of how things have gone, the past is the best indication indication of the future. But in order to do that, effectively, you need to expand your time horizon, you can’t just look at how well the property did yesterday to figure out how well it’s going to do three months from now, you obviously have to look at a larger sample of data. And ultimately looking at a multi year sample will tell you what the year over year trend is, so that you can make an accurate assessment of how well the property will do in the future. So those are really some of the biggest mistakes that I see investors making. When it comes to buying properties for short term rental, they’re just missing out on a lot of these fundamentals, skipping over it, getting impatient with it, not doing the proper analysis, and it can lead to a huge amount of headache. Trust me when I tell you that doing these things the right way, you know, making sure that you get the right property that you do your due diligence, you do a proper analysis, this can save you years of your life, it can literally shave years off of your horizon to replace your income. And it can literally mean that you get to retire from your nine to five years sooner, it can add hundreds of 1000s of dollars to your retirement nest egg, if not millions by the time you factor in compounding. So these are really, really impactful decisions and choices and actions that you’re taking. So it’s super, super important that if you are going to be investing in short term rentals that you do it the right way and avoid these common mistakes and pitfalls. Now if you want to work with our team to get our help make sure you can avoid these things and do it all the exact right way. Run the right analysis and get the best possible properties for short term rental. And check out the links down below and be sure to get in touch with our team so that we can talk more about how we can potentially help you with your short term rental investing. If you liked this video, make sure you hit the like button. If you’re new to the channel here and you’re not yet subscribed, make sure you hit the subscribe button as well to stay up to date with the two new videos we post every single week here on the channel help you to succeed with short term rentals. And last but not least, if you have any thoughts questions anyone share with me just let me know in the comment section down below. Thanks so much for watching. I’ll see you in the next video.