Starting an Airbnb business can be exciting yet nerve-wracking. The thought of being able to earn money on the side (and eventually do it full time) is captivating. But how do you start an Airbnb business that generates a steady income (and possibly be a good source of money when you retire)?
Let’s find out today as we interview John Bianchi, the Airbnb data guy, to discuss the first thing that you need to do before buying an Airbnb property.
How John Bianchi Started on Airbnb
John Bianchi started on Airbnb by renting out a spare room in his apartment. Since it was a trial posting to test the water, he uploaded it on Airbnb improperly and ended up living with his parents for two weeks.
The thought of not paying his rent and having extra cash from his Airbnb rental made John take the leap.
Being in the investing world, John’s research skills and curiosity paved the way for him to get into Airbnb rentals. And it all started when he came across AirDNA, which has all the data about every Airbnb listing.
When he learned how much people make from Airbnb short-term rentals, he raised money, gave up his other business, and opened up Airbnb rental properties.
He went from being a guy renting out a spare bedroom to managing a total of 15 units in different locations.
John sold off all his homes and contracts in 2020 and is now happily offering Airbnb data consulting services.
What data to focus on when starting an Airbnb business?
There are a lot of factors that come into play that will determine if a place is profitable or not. And in this case, blanket assumptions won’t work, according to John, because it’s different in every city and location.
But here are the general factors that you could look into:
- The larger the property, the better because you’re not competing with hotels. And guests can also split the bill, which means you can charge for more significant amounts.
- For vacation areas, find a spot where you can pay a minimal amount if you’re purchasing it while ensuring that there’s still good demand.
- The better the views, the more money you’ll make for vacation areas.
Should you hire a Property Manager?
While there may be some good property managers out there, buying a property is risky, assuming it would make a good amount of money without you touching it.
Do the legwork at the beginning and be good at it.
Then once you’re good at it, that’s the time that you can bring in someone trustworthy to do the work for you.
Where should you invest?
Here’s what John Bianchi has to say when researching the best place to buy a property.
- If you can make it where you live, go for it. It’s 100% the easiest way to do it.
- If you can’t do #1, go somewhere 2-5 hours away from your place so it’d be easier for you to manage.
- And if you can’t do the above two, go to a property where you want to go. There’s nothing better than owning an Airbnb where you want to travel. And it also makes you want to take better care of the property.
- If you don’t care about the location, try going to the outskirts of popular places because that’s where you’ll find a reasonable demand.
Tips for Airbnb Beginners
Success leaves footprints in the form of data, and that’s why understanding data plays a crucial role before buying an Airbnb property.
Here are some tips on how to start a profitable Airbnb business using data analytics.
- Find a pattern or a repeatable trend. And if you repeat it, you’re likely to get the same results.
- Airbnb is all about the experience. Make it a place where people want to create long-lasting memories, not just a place to sleep.
- The closer your property is to your home, the better. But it doesn’t mean it will be the most profitable place in the world. It’ll be easier to manage, especially when you have guest requests.
- If you have zero Airbnb experience, you don’t necessarily have to buy a place to start. Perhaps, you can rent out somebody else’s home and run it as an Airbnb to get the experience.
- Once you get the experience, start understanding the regulations wherever you want to go. Then do the research and understand the data. Find the patterns and trends that are driving the most revenue.
- Create a sort of buy box where you have all these criteria for what drives the revenue. Then find that home that would cash flow for you.
If you are retired or planning to, and you’re trying to look for a business that is not going to take up a ton of extra time, not going to hold you back on your hobbies or plans, and still provide additional cash flow, then Airbnb is without a doubt one of the best things that exist in the modern world.
Listen to the full episode above of Women Creating Wealth for more information!