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Airbnb invoice pdf for Planning

I'm going to share how to start an Airbnb or a vacation rental business as a beginner the whole thing from start to finish and some of the considerations you may have given the current economic climate naturally with the uncertainties in the market you may be thinking is this even the right time to start and that's okay that's actually a good thing because I'm also very much proceeding with caution I'm not here to convince you I have nothing to sell you no coaching no courses what I'm going to share is pretty much the same framework that I'm personally using as I'm looking for the next opportunity as someone who has done two listings so far and as a super host an Airbnb and Premiere host on verbo I feel like when I first started it was really hard to find concise high quality unbiased information from someone who isn't doing this full-time and doesn't necessarily want to do Airbnb full-time and I wanted to know in complete honesty as a beginner realistically what kind of time do I have to put in what do I need to do and what's a realistic amount of income to expect I feel like on certain times like these when everyone's kind of holding still It's actually an amazing time to learn and kind of do your homework so that you're able to recognize opportunities when they present themselves and that you are ready to take action so I'm glad you're here I'll first give you the step by step and as I go through I'll give you what I'm thinking about as far as like interest rates going up housing market questionable all of those things and then towards the end I will share roughly the time frame and how much money I've made so far the first step is to just learn some basics for free like on YouTube and immediately try to put those in action take those small actionable steps as you're still learning before you think you're ready number two you pick a market by that I mean you pick a location and a Target demographic I'm a huge advocate for just picking something that you like like a destination that you would want to travel to because a it's fun and B because you'll have overlap with your target guess you'll understand their needs better and the extra care that you can put in will really show I think something in town might also be reasonable you can leverage what you already know about your city and there's comfort in knowing that if something were to really go wrong you could show up and fix it in person I will say I showed up way too often when it was the tiny house in my backyard because I could and then when we got the beach house in Florida not once did I ever need to actually be there in person to solve a problem and so I think it could be a benefit or also a crutch in some ways picking something local is kind of like a security blanket which is as real and as valid as anything else but also something you could push past if you wish now this first part should take no more than a month to think over just pick something and start studying it and what do I mean by studying them you want to look up a regulations do they even allow short-term rentals and if so is there like a cap on number of days per year you can host number of bookings per year number of days per booking each place is going to be a little different and then B studied the vacation rental market itself what are the other airbnbs in the area which they look like has the supply been going up aka the number of listings in the area and what the average daily rate looking like overall as a trend if it is trending down that could signal that this Market is saturated or there are fewer people wanting to travel to that market hence the need to reduce prices these are things that are top of my mind especially in this year because there are so many markets that are very saturated this kind of information you can find on Airbnb analytic websites like price Labs or air DNA and then the third thing I would study about a market is the housing market itself assuming that you're thinking of purchasing a house especially right now there are so many variables in the housing market with interest rates going up and with houses sitting a little longer on the market prices should be coming down in most places but real estate is super local don't let anyone on YouTube tell you what to expect you do need to go to Zillow or Redfin to study what the trends are in your local area the next step is to get a pre-approval from A lender if you're planning to purchase property most likely and most conveniently you'll be looking at like a vacation home loan which is very similar to the standard mortgage process where you need like your W-2 income your credit score pay stubs and whatnot the reason you should go through the pre-approval process is a it tells you how much you can afford and B you need a pre-approval letter in most cases to submit an offer anyway and a lot of Realtors won't work with you unless you have a pre-approval from a bank getting pre-approval doesn't cost money it doesn't commit you to anything so it's a pretty logical and easy next step to go to now of course there are more creative ways to finance the property you could go into rental Arbitrage where you rent out a place as a long-term renter and then you list it on Airbnb as a short-term rental and you kind of pocket the difference there's seller financing there are dscr loans multiple ways of partnering with other people which is what we did actually for the beach house we had other partners and there are plenty of videos on YouTube about these financing options usually it would be like a thumbnail that promises investing in Airbnb with little or no money out of your pocket there are pros and cons to each of these approaches all of them have risk obviously and I'd encourage you to thoroughly research each of these and don't just listen to some talking head on YouTube tell you what the best way is especially if there's a conflict of interest specific to the current climate though I think one big risk is say if you lose your job how much savings do you have on the side to buffer you and what other income streams can you rely on during this time I'm not trying to scare you and I also don't think the right approach is to be completely risk-averse and don't invest anything but I feel like the downsides and the risks don't get talked about enough on YouTube it will all be here is how people are winning not Financial advice but continue to build your financial padding while you're learning Airbnb stuff next up get a realtor you can narrow down what property you want based on the budget you have and what Target demographic like are you looking at a big family house or are you targeting more business Travelers or couples that needs a smaller space I found that it was helpful for my realtor to have some knowledge of the short-term rental space however I don't need them to be complete experts what I want from them is their connection to that Community their Network and their knowledge of the real estate market I don't need them to tell me what Revenue this place can make as a vacation rental that's my job and I'd argue that the revenue projection part of this whole thing is so Central to investing in airbnbs that you need to be the one that's an expert and super comfortable making those calls so after you're set up with a real estate agent you'll be getting listings through MLS or if you're just browsing on Zillow at this point that's fine too what you want to do is look through all the house listings in the area and do some math on each potential Airbnb side note I know I'm using Airbnb interchangeably kind of as a synonym of vacation rental business and some people really get on the soapbox of well you don't have an Airbnb business that's a platform you have a vacation rental business like okay whatever you also don't always literally mean a Kleenex a tupperware Band-Aid velcro Ziploc I could go on about the colloquial usage of generic trademarks so let's just all chill out on the terminology where was I math look at the projected Revenue minus your expected expenditure and figure out how much you expect to net each year what is that net profit with respect to your initial cash investment AKA what is your cash on cash return I'll link to my calculator in the description box below it's an Excel spreadsheet that I adapted from multiple other people and I added a few parameters that I find useful this part as a beginner I will say was easy to start playing around with numbers and conceptualizing but it took a good month before I felt like I was really getting good at it I have found that both times with both listings I was spot on with the projection but I am really bad at expenditures and I have underestimated expenses both times so this is something I'm still working on now as far as the actual numbers I could do do a whole video on these analyzes but at a high level part one you're trying to figure out revenue and you do that by looking at comparables or comps in the area like what are some similar airbnbs what Revenue do they make and what Revenue can you therefore expect to make I like to use price labs for this information and specific for the current climate I would add a wider margin of error because there are so many question marks about consumer sentiment if people will still be spending as much on travel and then part two of that equation is using some general knowledge about Home Maintenance costs area property taxes your mortgage expenses to figure out what your monthly or yearly expenditure will look like most of this is stuff you can look up and I would budget a little extra because of inflation causing different services to probably cost more in the next couple years and sort of tied to the inflation is the interest rates likely it'll stay high for a while and so assume a high interest rate on your mortgage you'll plug in numbers to the calculator and run the analysis on each house that you see especially in the beginning you'll want to do this as often as possible to kind of get the Reps in the more practice you get looking at houses plugging in numbers estimating Revenue the more accurate you'll be the faster you'll be and eventually your eyeballs will just be trained to that market and you'll recognize oh yeah that house is going to make me 70k a year but to get there you need to do the practice and basically do your homework after some time at this stage if you happen to notice that the math just isn't mapping like nothing in this market seems to work which was the case for us we were looking at the Lake Travis area right outside Austin and there was plenty of new construction coming on they were starting to sit on the market the housing prices were already inflated from some time ago and at the same time the Airbnb space was getting very saturated it was hard to walk away from a couple months of studying but it was the right decision to Pivot so don't be afraid to start over if that's what the numbers are telling you next if this is useful to you so far please give this video a thumbs up and share it with your significant other or your friend who you travel with and stay at airbnbs with ask them why not just have our own house have other people cover the cost so we get to go on vacation for free all right for real next step is to make offers and keep repeating that most likely your first offer is not going to be accepted and so you'll have to be a little bit patient and this part might take some time depending on how competitive your Market is and how good a deal you want to wait for I think in most markets where the prices are peaking or have already peaked this year and next year might present some opportunity for some good deals and I think it'll be interesting to find that balance between waiting for an amazing deal that's close to Perfection versus being okay jumping in with a solid investment there's no right answer everyone will lie somewhere different in that Spectrum but I will encourage you to not go too far into perfectionism that you don't even get started after you get an offer accepted it then your house is under contract this is when you'll do your due diligence stuff like getting an inspection finishing out the mortgage process checking title that kind of thing this part usually takes about a month or two and it's also a really good time to start thinking about the design because some of the furniture will take forever to ship and kind of start your setup process like the transfer of utilities getting different handy people I have a whole guide on designing airbnbs and I also have a video on like the house setup slash maintenance like the boring stuff that you really need to do and I'll link that whole playlist below kind of a side note money tip here because this is a business you can get a business credit card that has say zero percent introductory APR and even some cash bonus for signing up and that can help fund your initial setup cost obviously you don't want to set up a personal credit card during the time your house is in the escrow and jeopardize your mortgage process and you also want to be really careful with carrying a balance even though it is zero percent APR up front if eventually stuff will be due right so personally I only do this when I already have the cash available where I could pay off the whole thing but I'm choosing not to just to earn some extra interest from the bank I'll link to my two favorite cards for this purpose below the next step is preparing the listing for Airbnb and I will start drafting the listing description the house manual as I am nearing the closing date so that I can be ready to list the house on Airbnb as soon as the design is over and the photography is ready in a sense time is money so the longer you wait between closing where you already own the house to listing and getting that first guess that's all kind of uncovered costs that you have to front which is fine and that's part of your startup expense to budget for but the shorter duration the less money you have to pay out of pocket right the house manual I usually just do on Google Docs and I can share the link to that document in the future when I have guests and that's pretty straightforward as for preparing the listing description make sure you go through all the amenities boxes and check everything that's relevant fill in all the blanks about your space about how to contact you it kind of takes a while but it's important to make sure your listing is complete if you'd like for me to be your Airbnb host Ambassador where I get to review your listing and give an input if you wish you can use my link below to sign up to host this is at no cost to you and Airbnb actually pays you forty dollars to do this so yeah that's a free resource if you would like next step is the closing and setup of the house if this is a property that's far away hopefully already made travel plans to go do the closing also ideally do the setup in that same trip it'll sound like that this is a vacation but really it isn't it took us a week to set up and they were action-packed long days I just want you to be mentally prepared for that schedule a photographer to come out after you've done the setup and that your cleaning person has prepped the space for nice clean photos and make sure your photographer is professional and they have done Airbnb pictures before it's a little bit different from like just basic Zillow Style real estate photos where you're not always is aiming just to just capture like the largest and widest angle right like you're conveying an experience some fun some enjoyment to your potential guests and that's a little bit different and when the photos come back you should be ready to go live on Airbnb that should be the last piece of the puzzle now you may be wondering should I also set up on verbo booking.com make a direct booking website all of those are fantastic ideas and I completely agree with the need to diversify where you're getting potential gas 100 however as a beginner each of these places have a learning curve and you don't want to half learn each platform you know what I mean you want to be really good at Airbnb rank really high on their surge be completely optimized there before you dilute your efforts and time on all these other platforms I'm a huge believer of doing really well on one to two platforms versus doing poorly on all four does that make sense for my next listing I would probably build Airbnb verbo because I'm already very familiar I already have super status on both of them and then slowly build my direct booking website and then a couple other things you want to do in the initial set of phase are setting up Dynamic pricing because you shouldn't be pricing your Airbnb the exact same nightly rate regardless of whether it's the weekend it's Christmas spring break price Labs is my go-to Dynamic pricing tool and I usually like to check on it every other week just to make sure I am reacting to any Market changes and that my upcoming pricing makes sense the second software component I think is optional if you're a beginner and you're not expecting to host a huge ton I use hospitable to automate my messages and sync calendars so that I wouldn't get double booked between Airbnb and verbo for example I like having automated messages because it's really hard to remember when to send checked instructions like when are people checking out this and that but I think for the beginning if this is like your first listing more than likely you are going to go in and tanker even if you have a template of an automated message you're probably going to Google all your guests and you're going to find them on Facebook on LinkedIn to see who they are you're gonna Snoop on them that's just naturally what we do as people so whether you need this right away especially if you only have the listing on Airbnb I don't really think so but it is very nice to have as you kind of get settled in and you expand to verbo and you're having more bookings last comments I have on the setup are to get an umbrella Insurance regardless of whether you have an LLC and to keep really good documentation of everything that you're spending as your startup costs so if you're buying Market dashboards for studying different markets if you're traveling to your potential Market to meet with the realtor to see houses and obviously your startup furnishings and supplies make sure you have good documentation of all of that because all of those can be written off for tax purposes and it's better to build that habit of keeping documentation right away instead of like at the end of the year try to scramble and find those records from when you first started now answering the question on how long does this all take for our tiny house which was an existing structure that's in our backyard it took us two months to study the market plan the space design it and build the furniture and stock it and then welcome our first guest and that was our first Airbnb project so I think there was a little bit more learning curve on how to write a listing and how to do photos and figuring out software and projecting Revenue our second project was the beach house and that's when we have Partners it's also out of state and it's a bigger property and that whole process took about four months I also feel like we did have some previous practice in looking at housing markets and projecting revenue for long-term rentals we did start out real estate investing with a long-term rental and that one took significantly longer at six months even though there is less setup to do and then lastly what kind of money are we talking for all of this effort for the tiny house I have a full video breaking down all the financials but the too long didn't read is we hosted for about five months and fully recovered our cost of Furnishings for our second which is the beach house we haven't finished the full year yet and I plan to do a full financial report video on that one when I hit that one year mark but I think we're on track to meet our projection of just over six figures in Revenue again expenses are a lot and that's my weakness I'm thinking for the whole year our take-home will probably be around 10K plus the tax benefits and loan pay down and the two trips of family but I'll Circle back and let you know for sure in the next couple months now that you have a broad overview on the process the time required and the potential upside leave me a comment on which topics you would like a deeper dive on I had to stop myself from getting into the nitty-gritty of each topic because honestly each of them could be a whole video and I can go on and on and this video is already too long I think when I get into my next Airbnb project it'd be pretty fun to use that as a specific example on how I'm applying this process and share that with you guys and so I'll be sure to keep you posted when that happens make sure you give this video a thumbs up and that you're subscribed so that you don't miss those future videos again links to other videos and all those resources I mentioned are below in the description box thank you for watching and I hope you're having a really nice day bye