How To Use Airbnb Properties To Become Financially Free - Michael Elefante

Learn how Michael was able to set himself financially free in just ONE year by leveraging Airbnb.

Michael believes that all it takes is ONE property to set you financially free. If you're interested in real estate or have been looking for somewhere to invest and protect against inflation, you've got to listen to this one.

We cover A LOT in this episode:

• how exactly he finds properties
• how he determines whether they'd be profitable before buying them
• how he funds them
• what he does to the properties to maximize revenue
• what are the most common pitfalls to beginners
• and much much more!

All show notes & resources available here -> https://boundtoberich.com/michael-elefante

You can also watch the video version of this interview on YouTube -> https://youtu.be/jCNnpnQgb5g

Stay tuned for the end of the interview where I offer a discount + $100 Amazon gift card to anyone who buys Michael's Airbnb course: "Airbnb Investor Academy". (Must use my link so I can confirm purchase) -> https://financial-freedom-university2.teachable.com/?affcode=897357_lm6o-ly7

Join my email newsletter! → https://bit.ly/BTBRnewsletter

Sign up for the Fold debit card to earn Bitcoin back on all your purchases! Get $25 free with my link -> https://use.foldapp.com/r/BTBR. (Here is a video where I explain how it works and show how I was earning up to 10% Bitcoin back on purchases -> https://bit.ly/3lGAdyd)

Sign up for a RobinHood account if you're interested in investing in stocks. If you sign up via my link, you and I both receive a free stock (no deposit required!) -> https://join.robinhood.com/ismailh14

Coinbase is how I buy my Bitcoin. Sign up via my link and get $10 in free Bitcoin! → https://www.coinbase.com/join/humet_q

Sign up for the BlockFi credit card to earn Bitcoin back on all your purchases! Get a free bonus with my link -> https://blockfi.com/?ref=549e837d

Check here for links to other cool resources -> https://boundtoberich.com/my-links/

Enjoyed this episode and want to treat me to a cup of coffee? Thanks, you’re awesome! → https://www.buymeacoffee.com/boundtoberich

Transcript

This transcript was automatically generated using Descript.

Ismail: Welcome to the bound to be rich podcast, where I attempt to reverse engineer people who seem to be successful, no matter the circumstances, so that you can apply those lessons to your own life. I'm your host is Ismail Humet one quick thing. Before we get started, I am starting my own email newsletter, and I would love for you to join it.

It's going to be like a personal note for me to my friends of all the best things that have come across that month from hacks and tips, interesting stories, products, books, ways to make money, and who knows what else it's totally freight. And if you don't like it, you can always opt out at any time. So there's no downside.

The link to join is in the show notes. And I hope to see on the list in this episode, we are joined by Michael Elefante, a very successful Airbnb investor. Michael has an amazing story. He was a high school athlete on track to be a professional baseball player. Unfortunately, when that didn't work out, he ended up working at dunking donuts fast forward to today, and he's making close to $100,000 per month from his Airbnb properties.

We cover his entire journey in our conversation and dig deep into how exactly he finds properties, how he determines whether they be profitable before he buys them, how he funds them, what he does to the properties, to maximize revenue. What are the most common pitfalls to beginners and much, much more Michael believes that it only takes one property to set you financially free.

If you've been interested in real estate or Airbnb, I know you'll get a ton of value outta this conversation. Let's dive in.

Michael. Thanks for joining the show. Really appreciate you making the time. 

Michael: Yeah. Yeah. I'm really looking forward to our conversation. I appreciate you having me. I was, 

Ismail: I'm really excited to chat with you, uh, for a number of reasons, but I think the, the main thing that stuck out to me. Um, I saw a couple of your clips and as I dove deeper and deeper into your content to prepare for this, you're just a very transparent and authentic guy, which I think in today's day and age, with all these like Airbnb grooves and stuff like that is kind of hard to find, uh, specifically like you break down the exact numbers of your properties, the, and, and the real cost, not just a lot of people don't talk about the furniture expenses and stuff like that.

So I think, uh, as a compliment to you, very transparent. And I think it almost felt like I found the hidden gem, uh, not on TikTok cause on TikTok. You're huge, but on, on YouTube, I think the content there, you get to go way more in depth. Uh, and I have no doubt that you'll get a lot more followers there as well.

Michael: Yeah. I appreciate you saying that. Um, and yeah, like you said, I think where I wanted to provide value is just being open and transparent because when I was first learning, like a lot of us, do you know whether you're reading books or diving into content, it's hard to figure out one what's a good fit for you, but two, what to believe what's out there.

And you too often hear people talk about, you know, you know, unit count in real estate or top line revenue, but not, not enough about cash flow. So for me, I'm a numbers guy and I just really wanted to feel comfort in the numbers for my investments. So I just wanted to portray that transparency out to other people.

So they know it to expect to, um, if they're also gonna, you know, invest their hard and earn money into something like, uh, a short-term rental property. Ha having 

Ismail: said all that though, I do like to, if you're okay with it, bring people back to earth a little bit, because one of the, the feedback I get from people is, uh, the guests are, they seem like rock stars, like they're a little bit unrelatable cause they can do all these things.

It seems I out of reach like having a $2 million plus portfolio. Um, so I, I saw something in one of your clips where you were talking about how you were like on the track to be a professional, uh, baseball player. I think it was, and that didn't work out. And your first job was at dunking donuts and , I think for everyone listening that wants to, they obviously want to improve their situation.

They wanna get to a better. If you're open to it. I'd love to hear you talk about, it sounds like that was not mentally easy, but more than that. Yeah. How did you overcome that and build to where you are? Cuz a lot of people don't get out of that mental cycle. 

[00:04:07] How Michael Elefante started

Michael: Yeah. Yeah. It's, you know, I think a lot of people, you know, fall into that.

It's not like a trap, but fall into that, um, after college or maybe after pursuing something that they're truly passionate about at a younger age when it's like nothing else matters. Right. So for me it was baseball. Um, I think I had the ability to probably, you know, play professionally up to a certain point, had some injuries.

Um, and maybe I just wasn't good enough. So I had to come to that realization. Um, and I had redshirted a year, so, uh, I graduated, um, with the finance degree and I'm like, oh, what the heck do I do with this? So I had the decision like wait for the draft, see if somebody picks me up and if it doesn't happen, I could come back for a fifth year.

Um, or I could start applying for jobs. So ultimately decided to come back for a fifth year. Um, but I was still. Deciding that I knew professional baseball was pretty much over at that point, but so I started applying for all these jobs. Uh, a lot of part-time jobs, some, you know, full-time jobs that eventually I would quit if I wanted to go back to school and literally nobody would hire me.

It was crazy. And all the part-time jobs down in Florida at the time, like I made it to the final interview at Chipotle and some high schoolers edged me out. And I, here I am with a finance degree with like solid GPA, like a really good resume. And I'm like, holy crap. Like, um, anyways, the only I swear to got the only people that would hire me was dunking donuts.

So I was waking up at five in the morning to go pour coffee in the morning. Um, you know, but it was still a job. I'm not afraid to go work and earn money regardless how much it is. So, um, ended up going back to school. Um, and I didn't need to go back to school for school. I just wanted to play another year and then figure out what I wanted to do.

So after that, I like everyone else. Like what do I do with my life now? Like, I don't have anything that I'm passionate about. Like everything I literally woke up thinking about was baseball. So. Got into a sales role, heard you could make good money in technology sales knew nothing about technology. Um, just cold calling it every day, like 70 to a hundred calls.

And that was like a brain hammer. I would drive home and I would almost feel numb driving home. I'm like, this is what I do till I'm 65. You know, I know I could start making more money, but I was like, man, it's just like, I can't get into this. I, this is the rat race. Right. Um, but people just get comfortable.

And for me, I was like, I can't be comfortable doing this. My wife and I had a lot of sit down conversations. Both of us didn't, weren't happy with or fulfilled with our jobs. So we just decided to focus on our earnings while we figured out what to invest in, in the future. We, I always had an interest in real estate, just ignore to start bounced around between several different cities, Dallas, uh, Austin, Nashville.

We both changed jobs several times to boost our income side hustled. You know, I worked at a wine winery, pouring wine and cutting cheese for people I got on the weekends in Texas for a while. Um, and then eventually got into real estate finally. Um, but I know now is I know I could have gotten started earlier.

Um, but yeah, like you were talking about, I think bringing it home was just that regardless of where you are now, like you can, you can choose where you want to go in your life. Um, I just think it's try to be not as shortsighted, you know, if you don't have to do what you're doing today forever, um, you could chase things that you're more passionate about.

Um, you could create income other ways and, and, and choose what you do wanna do with your time. One of 

the 

Ismail: comments I hear heard you make in that clip, uh, it was like a throwaway comment that you were using LinkedIn to network and get better jobs. Uh, if anyone's in that role right now where they're trying to increase their income to invest in something, do you have any tips on networking, uh, for higher paying jobs?

Yeah, 

[00:07:25] Michael's tips in networking through Linkedin

Michael: yeah. Yeah. So networking is definitely huge and that old saying it's not what you know too, you know, I mean, that is, it is pretty true in a lot of cases, especially if you're not in a, you know, uh, like a top skill related job, like, you know, in the medical field, for example, or, or a lawyer or something like that, where you have to go to a lot of school, right.

Many years. Um, networking is huge. So for me, it was just about making connections. I would, I would literally spend hours and I went to a small college Yale university. I think it's like 6,000 undergrads. And I would literally just do all these filters in LinkedIn. Um, and I wasn't savvy with it either at the time.

So I kind of figured this out and I would literally just search for people who also went to Elon that worked at all these different companies. I look, I would start from the top down all the major tech companies that I knew paid well, good benefits, all that. Um, so I applied to like Google, Workday, Salesforce, Amazon, all these companies.

Um, but I, I all my, uh, excuse me, my resume and application, we could kick back. So that's when I started doing the networking. I had a lot of people that were honestly very kind and open, just say, Hey man, you know, I saw you, you know, went, went to Elon as well. Would love to chat with you about your experience at this company.

Um, and your, you know, your path to get there. A lot of people said, Hey, just call me. So we talked that led to a lot of referrals and referrals are huge. It came later to realize that. They also get bonused for referring other candidates. So there's an incentive for them to refer good people and that mutual connection that we both went to the same school, build some sort of layer of like initial trust almost, you know, so networking is certainly huge.

And I I'm glad you brought that up. I forgot. I talked about that in one of those 

Ismail: videos. It's a great hack because I remember doing the exact same thing. I was looking at the time I was working in wall street looking for, so I, I would look at alumni from my school that worked at Goldman Sachs and surprisingly had the same experience as he was like, they were very surprisingly open to helping, uh, obviously to the limits of how much they can do.

But a lot of people responded, a lot of people gave advice if they couldn't help with referrals. So, uh, I don't think many people do that. So it's not that hard to stand out if you do these little things. Um, for sure. So, okay. The other thing that I found interesting about you before we get into the Airbnb stuff is that, um, in this day and age where everyone's like bribing about and showing off their, their money with Lambos and Rolexes, um, You and your wife are traveling around the country in a camper van.

Right. Which I think is it's, it's a little weird for some people, but I think that's awesome. Like everyone has their own idea of a rich life. Right. So I'd love to hear more about that. And, and I see people kind of making negative comments about that on social, which I just, I don't understand. So if you can riff on that a little bit, I'd love to hear what your thoughts are.

Yeah. 

[00:09:55] Michael and his wife’s multi-state tour in a camp van and how some of his followers perceive it

Michael: So my wife and I both love to travel and she certainly gave me the travel bug. She's very well traveled. She took advantage of a lot of study abroad programs through college and had some time to travel with her mom, which was younger. Um, so she's been to like, I don't know, 25 countries or something, so she's all over.

So I did a couple international trips with her. I was like, this is so cool. Like experience, experiencing different cultures, meeting different people, like trying different foods. I loved all of it. Um, and so we had never really traveled domestically across the country. And, you know, we're very fortunate to live in the us and it's a really beautiful country.

And I think a lot of people get so bogged down and, and including myself right in the day to day and wherever you're living, even in your own house or at. That you forget to go explore and see what, like, just walking around different parts of the country has to offer, whether it be national parks, rivers, lakes, all that stuff.

Um, so we had this crazy idea. Like we never thought of ourselves as like van people or RV people, but like, what if we got a converted camper van or an RV and just traveled, became financially free. And that would be like our icing on the cake to quit our corporate jobs and just go for it. Um, especially before, you know, trying to start a family and have kids.

So that's what we did and bought a converted camper van. We did do it ourselves, cuz it would not have come out near as nice as the one we got, but uh, started traveling around. We've been to, I don't know how many states now in the past four and a half months, about 20 national parks, um, all over the place and it's, we're getting a, a little ready to get back in a house and kind of get back in a routine, but it's just been, you know, an unre, regrettable and unforgettable experience, just traveling around and uh, bringing it home to what you mentioned.

You know, a lot of people do leave these funny comments, like. , you know, I'm, as you mentioned before, I'm very open about the cash flow numbers and other income streams that I've developed. Cause I just wanna be transparent with people that give the time to me to follow my content. Um, and they're like, oh man, if you were making this much money, you wouldn't be living in a, you know, a crummy, these worst words, right.

A crummy, uh, van or, or just that or the other. And I'm like, you know, if you were making this much money too, like you could do whatever you want. And like, I have no, no problem with what you wanna do. But for me, it's, it's all about time, you know, freedom of time is more important. Yeah. Um, and then you could focus on growing money and having those fun toys later on in life.

You know, it's a 

Ismail: funny thing that I've noticed too. Like I've had, I have had a couple clips that did really well in TikTok, nothing to your level. Um, but everyone comments like, Hey, are you a millionaire yet? Let me see your bank. It's like 

Michael: how, how they all let the bank accounts, man. How does her tax 

Ismail: statements?

How does me flexing my bank account or my car or my watch or whatever help you. , I don't really understand that whole and those kinds of people, even if you show them stuff, they'll just still find a way to nitpick it. Oh yeah. It'll 

Michael: never be enough. Yeah. They'll they'll say, oh, that's not true. Show me your social security number.

They'll, they'll dive until like, they're just trying to banter, you know? So it's almost like why give them the time of day? It's like, you're trying to provide value there, you know, it's yeah. It's not really worth your time to, to banter. Why not 

Ismail: travel more luxuriously? Well, 

Michael: we could, but then we wouldn't be saving money to make more investments.

Right. I mean, um, I think at some point we, you know, we do like the finer things in life, but I also really enjoy the simplicity of it and kind of like that minimalism approach. And, um, you know, we live in such a consumer economy and the consumer world that we get so bogged down into what's new or what does somebody else have?

It, it was really nice for us to pair down and get in a tiny, tiny little van and, um, just kind of live simply and not have a ton of stuff. It there's something like. , I don't know what the correct word is for for that, but just like, uh, empowering in it, I guess. Um, at some point when we settle back down, we'd love to, you know, uh, build a dream house at some point in the next, you know, five to 10 years and, and travel.

And at that point when we do shorter stints, uh, but if we were traveling more luxuriously, I don't think we'd be able to save a ton of money cuz Airbnbs, you know, I, I know Airbnbs, they could be expensive, you know? 

Ismail: Yeah. It's, it's funny. Um, for some reason, nowadays it's like acceptable to brag and show about flaunt, your wealth, right.

Uh, but the real wealthy people that at least I know in my life are the opposite of that. Like they go out of their way to not show their wealth or flaunt their wealth. Uh, but now for some reason people expect it on social media. But maybe if we have time at the end, I'll ask you some questions about social media and if you guys make it up to New York, uh, and your trip, let me know, we'll treat you to a mail or something.

My wife and I, yeah. Uh, for sure. I dunno if there's any plans to come out this far, but um, let me know if you do yeah. Yeah. Well, I'll keep you posted. Awesome. . Um, okay. So I noticed in the earlier some of your earlier clips, you had this saying where you said, um, you only need a couple properties to become financially free and like over time, I think more recently you started to say, you only need one.

Um, so we don't need to spend too much time on why Airbnb, I think anyone listening to this already knows why, but I'd love for you to elaborate a little bit on, that's a powerful statement that you only need one to become financially free. 

[00:14:47] You only need one Airbnb property to be financially free

Michael: Yeah, yeah, absolutely. Um, well just the cool thing about Airbnb.

Um, there are, there are different strategies to, you know, use an asset, whether you buy it or you're basically renting it and subletting, you know, getting landlord's approval, signing corporate lease, um, and re renting it out. Um, but it really doesn't take in some cases, but one property become financially free and the financial freedom number.

It's hard to explain sometimes online, but it's different for everyone, right? What's your financial freedom number. how much money do you, or maybe it's you and your spouse, or maybe you and your whole family. What is that number to where if you lost your job today, it wouldn't matter. You could still pay for all of your living expenses.

You could still pay for the lifestyle that you guys desire to have. Um, so yeah, that's why I fell in love with Airbnbs is cuz at first I was overwhelmed. Like I don't know if I can or I, I know, I know I probably could, but I don't want to scale to like a hundred units to achieve some level of cash flow.

When I know I could achieve a similar level of cash flow with maybe one to five properties. Um, so with Airbnb, you know, you could charge more per night, especially if you cater to creating a really cool experience, people are willing to pay for that. Um, and then you have the same level of expenses as a single family home or as a rental.

Um, and then anything you bring on top of those expenses is, is your take home. Um, so I don't know if you want me to elaborate anything specific, but that's kind of like my mindset on that. I guess 

Ismail: I, I, you kind of touched on a little bit, but I wanted to ex explore why Airbnb short term rentals versus long term rentals.

Uh, it's obviously there's more money in it. Uh, but I know you're big on cash on cash. So I had interviewed someone recently who invested in long term rentals and you're probably familiar with this, the, the Burr method mm-hmm it was fascinating to me because you can, your, your cash on cash return becomes very high because your refi, your, your money out of the property.

Right. So right. For someone who's so focused on the numbers, in cash, on cash, how do you think about going that route versus doing the Airbnb. 

[00:16:46] Michael on BRRRR Method

Michael: Yeah, I think the bur method is an amazing model. I read that book by David Green. Lovet, I'm a big fan of the bigger pocket guys and gals. Um, but if I had the choice between I'm looking at cash on cash, but I'm thinking how fast can I get to that financial freedom number?

And it's a cash flow game, monthly cash flow. Um, one Airbnb property, especially if a larger one could cash flow. You 10 plus thousand dollars a month on average, um, where if you bur a property and it's traditional long term rental, you still may only be cash flowing two to 500, maybe a thousand bucks a month still great.

Right? Especially if you pull that equity out, you can just rinse and repeat. Um, the bur method for me also would take a longer period of time cuz you have to take time to rehab it. Um, wait to pull your money back out through that refinance. So let's say it takes, I don't know, six months or so within Airbnb, I could buy a place.

Maybe it needs a little bit of work. Um, rehab it stand up within 30 days and I'm already cash flowing day one. Um, so that that's kind of my mindset on there, but I nothing against the Burr model at all. I've actually know somebody he's on TikTok. He's actually pretty big Mr. Burr. Um, I think his name's Michael Burr last name's literally by it's hilarious.

but, um, he does a very interesting strategy. It's almost like an infinite banking strategy, but it's a Burr model for Airbnbs, so, oh. You've seen him check his content out is pretty interesting. I have not heard of him, but 

Ismail: I'll definitely check that out. That sounds interesting. Um, alright. So some here are some concerns, cause I gen I was looking at, um, getting a property for Airbnb.

Uh, let's say a year and a half ago. Uh, and some concerns that I had I'd love, maybe this is a long question. Uh, so you can tackle however you want. Um, it seems like there there's a, there's this fear of it being overhyped at the, at this point in time, um, trying to buy a home for myself, plus an Airbnb, I've realized that the market's gotten crazy across the country to buy real estate.

So that's one thing it's expensive to buy property. Now, the other thing is that it seems like the. uh, rentals are inflated because there's a lot of people traveling now. Um, so how reliable are these average nightly rates that we're getting now? Um, and then even stuff like furniture, like everything's more expensive everything's on back order.

So it seems like it's a lot more costly to get something now. And I'm worried that there's this boom in Airbnb, it's overhyped. There's a lot of people coming into it. Um, you mentioned the margins are much greater and I've known for almost any business I've analyzed when there's fat margins. It eventually Slims down cuz of all the competition and people flooding into it.

So that's kind of a long thing with a lot of, uh, concerns, but I'd really love to hear you talk about that from your perspective. 

[00:19:20] How Michael chooses what property to buy

Michael: Yeah. Yeah. And that may be the case long term. Um, you know, I guess we'll just have to wait and see, but that's why we're, um, trying to acquire several properties now just to be ahead of the game.

But I think even in saturated markets, like we're in Nashville and Gatlinburg, Tennessee, um, or housing prices certainly have been just crazy. Um, as long as, and we're very conservative in forecasting, average, daily rates and occupancy. So you guys can use tool, uh, called air DNA. Um, I use that tool. I have the subscription for the entire us, but usually have to buy the specific market subscription.

It's worth it. Cuz it's a direct data poll from all short-term vacation rental data in the market. It'll give you like market grades for each place. For example, Gatlinburg, it'll tell you can carve out. I only wanna look at three bedroom houses that sleep up to eight guests. What's the trailing occupancy been like the last two or three years.

So you can view all that data and you see a spike in the past, like six months in average daily rates one, cuz it was busy during the summer two. There's still a travel boom. You know, people getting outta the house finally. Um, that may hadn't in the past from COVID. So like Airbnb V R B O V CASAA. All these CEOs came out and said they've experie.

All time high in demand from guests. So if that continues, I don't know, but at least we have trailing, you know, two to three years worth of data to be very conservative with our daily rates and our occupancy. Um, and, and all of our rentals. I've been surprised by more cash flow than less. So I do try to be very conservative.

I think that's important not to get over zealous, cuz it's really gets really exciting when you change those numbers even just slightly and all of a sudden your cash flow and cash on cash, just like skyrocket. And you're like, oh my gosh, I wanna make so much money. Right? So you gotta kind of bring it back to earth.

I also do a low forecast to make sure that in a worst case scenario, like another COVID lockdowns all this. If it's barely renting, am I still, you know, cash flow positive, even if it's a couple hundred bucks a month. So, um, it really all comes down to the numbers for me, certainly don't wanna overpay right for a property, um, in today's market.

So I think where we found opportunity is finding places that are not turnkey, meaning they're fully furnished, ready to rent with rental history. Those places are, you know, there's 50 people bidding on them over in 24 to 48, 48. So for us, we're looking at places that maybe need a cosmetic rehab, maybe a little more involved, but mostly just like new pain, maybe new floors, uh, and new furniture, cuz there's a lot less competition.

And then you kind of pad your equity by doing that. It's almost like the birth strategy. You kind of pad your equity by rehabbing it, you know, the after repair value is a lot higher than what you acquired it for. So even if the market were to correct or you know, it wouldn't rent out as much in the future, you kind of had that padded a little bit of wiggle room.

So that's why I like Airbnb, especially with the housing price increases, you know, part of that is due to inflation, you know, there's low supply and all those other factors, um, that I'm sure you've talked about before in your show, but, um, with inflation, you know, not just average monthly rent for long term rentals, but also daily rates are gonna increase too.

You know, you mentioned furniture, all these things are getting more expensive. So I think over the time you're gonna be able to charge more per night. Um, so yeah, I, I 

Ismail: totally with that and listeners of the show know that I'm, I'm a big believer that there's. a lot of inflation coming and the idea with real estate of locking in that debt of acquiring the property, even if it's inflated right now, but locking in that payment and benefiting from inflated rents going forward is appealing to me.

Um, is, is there any advice that you have on finding great properties? Because it seems like the, the good thing to do is to find something near an attraction or some kind of tourist destination to have a constant influx of people, but then don't you fall into the seasonality problem where it's really packed during the summer, but it's dead price of the year.

[00:22:54] Seasonality as a big factor in Airbnb

Michael: Yeah. So seasonality is, I'm glad you brought that up. It's definitely important. So, um, that's why air DNA is very useful. Cuz you can look at seasonal trends. Um, you can look at occupancy data for like the 50th 75th and 90th percentile for the slower months. Some, some markets like you mentioned are like you have big booked, almost a hundred percent from let's say made to September and it's very quiet.

The rest of the year. I try to avoid those markets. You can still be very profitable. Um, but you have to make sure that you're rented out during those summer months and crush it. Um, but other markets like the mountains, or maybe like Florida panhandle, beaches, there's markets like Scottsdale Nashville that are slower some months, right?

Like January and February, like post holiday kind of hangover, um, less travel, but the rest of the year, I mean, people are traveling. Uh, that's why I kind of love Airbnb is I just don't. I don't see people ever, ever not wanting to travel. They're never gonna stop taking PTO. Um, they're never gonna stop celebrating special occasions, weddings, bachelor, bachelorette parties, birthday celebrations, family reunions.

So I think that's where the opportunity is. I, especially in the traditional vacation markets, so beaches, mountains, lakes. Um, but yeah, you definitely want to, you know, factor seasonality, uh, into the equation for Sy. I wanna be casual, positive every month, even if it's less some months. Um, I really don't wanna be in those super seasonal markets.

That's just me personally. . 

Ismail: What about the, the negative Dans out there that are concerned about like the horror stories of terrible renters that damage your property, prop, these parties going on, or even like, um, the fears of unhappy neighbors. Um, yep. And maybe like regulation of the town or communities clamping down on this.

Anything, any concerns that you have over this business? 

[00:24:35] Considering HOA and states’ laws and regulations

Michael: Yeah. So, yeah, that's a good point. And I think the biggest thing for everything you mentioned is just understanding that before you make an offer on a property. So if it has an HOA understand what percent of those properties in the HOA are short term rentals, because if most of them, if near all of them are not, then at any point in time, if the board votes to ban short term rentals, you're outta luck.

Right? So I try to avoid places like that. And then, uh, in a lot of cities, especially, you know, larger cities, Nashville, for example, um, some have more strict laws than Nashville, but it's more around zoning. So there's different zoning ordinances in place to prevent short-term rental permits from being issued in residential areas.

And now they're banning, um, mixed use residential or multi-family areas too, starting in 2022 there. Um, but commercially zoned areas are still allowed. And what you're seeing in cities is a lot of UN uh, plan development units that are all short to like basically zone for short term rental. So they're almost like Airbnb communities that are being built just to specifically, so they don't annoy residents, but yeah, that's certainly something you have to consider with neighbors.

Uh, and couple of our properties that we know they are neighbors nearby that are permanent residents. Uh, we just introduce ourselves, give 'em our phone number. You know, if there's ever just make, 'em a part of like your little team, right. If there's any ever any issues, let it me know I'll address it immediately.

I want you guys to be happy. 

Ismail: So how, how does that, I'm curious, how does that conversation go? Like, do you go up to them and say, Hey, I'm gonna be renting this property. They're probably not excited by that idea. And then like, how do you handle that specifically? I think people would learn a lot. . 

[00:26:08] Handling neighbors as you set up an Airbnb property

Michael: Yeah. So actually in Nashville you have to write a written letter certified mail to all of the neighbors that are adjacent, all four directions, um, to you letting them know that you're planning to do it.

Um, which it, it is what it is. I think it's kind of silly, but there's only really one property where we had a neighbor that was a little bit concerned, but they live in Gatlinburg, in a community where there's a ton of rentals. I mean, there's thousands and thousands of rentals out there. So it's a huge vacation market.

It's the number one most visited national park in the country is the smoking mountain national park, which the main entrance on the Tennessee side is through Gatlinburg. So, you know, she's that she knows that rentals are huge there. I think they own rentals themselves, but we just approach them and say, Hey, we're operating as a rental.

I just wanted to, uh, let you know that, uh, we're tr we're catering to families, right? So I'm hoping most people are, are very quiet and extremely respectful. We have very strict house rules and quiet times. Um, but here's my phone number. Here's my email. If any issues ever bubble up or any concerns, please don't hesitate to call me at any time of day and I'll make sure to nip in the bud right then and there.

But I haven't heard from them since we launched that, that place, um, like seven months ago, I think. So I think all things are good there. Nice. 

Ismail: Um, one other interesting thing, and I don't know if you've talked about this, but there's this concept of like, uh, geographic arbitrage, where let's say I live in New York, it's very expensive, but you make a lot of money.

Um, and you can do use that benefit and buy investment properties in lower cost areas around the country. What's your thoughts on investing in, Airbnb's not in your area and dealing with it from afar? Like, I, I, you've been honest about sometimes there are issues with tenants and, uh, plumbing and, and whatnot.

Um, is that something that you are, uh, fearful of recommending or do you, do you recommend people who go out of their town or stay local? 

[00:27:56] Leveraging investment in property away from your city

Michael: I highly encouraged to go out of town. Um, there's one real main reason. Um, you can take advantage of a secondary home loan and only put down 10%. There are some rules that apply.

And one of them is it has to be typically 50 miles away in radius from your primary residence, um, because the lender uses it as your vacation home, but when you're not using it, cuz they don't expect you to use it all the time. As long as you can service the debt based on your own income and debt to income and, and credit score and things like that.

Um, you're legally allowed to rent it out a certain amount of time throughout the year. So I think the general threshold is you're supposed to use it like 14 days out the year, which that's why I think Airbnb so cool is you, can you live in New York or what if ILOP a, a vacation house in Florida right on the beach, like a pop one in the mountain somewhere I go skiing or snowboarding, whatever you wanna do.

And that's what's makes Airbnb so unique is even like a worst case scenario. I mean, you should be making really good money on Airbnb, but even if you're breaking even some, like you getting a paid for vacation house to use whenever you want. So I think that's like the coolest thing. So I always encourage people.

You know, that's one of the most common comments I actually get is, you know, too bad. I live in a small town and I'm like, I look at other markets, like I encourage you to look at other markets. Um, totally take advantage of that. Uh, it's one of the unique things about short term rentals, uh, that secondary home loan that you could, that you could 

Ismail: leverage.

Yeah. That's obviously that's very appealing to me is I was actually looking at where do I want to travel and can I get an Airbnb there and turn it into a cash flow thing? Uh, the other thing that I think is interesting is investing a way far away, kind of forces you to analyze it as a business.

Otherwise you fall into the trap of let me clean it, let me, uh, mow the lawn and all the other stuff. And then you start creating a job for yourself as opposed to the financial freedom that everyone's really, uh, chasing after. Um, one, one other thing that I, I thought was very interesting, cuz a lot of a huge chunk of my audience is from the event industry.

And I think this would really resonate with them. You have this thing where you try to make every property Instagramable. Like something about it. Uh, and I think that's genius, especially in this day and age where everything's about social media and, and taking photo, like people are going on vacation. So I'd love to hear you talk about why that's important.

And then are you like the interior designer of these properties? Are you like coming up with the idea and, and the furniture and all that stuff? Uh, yeah. 

[00:30:13] Instagrammable Airbnb’s advantage

Michael: Yeah. So that's a great point and something we realized very early on in our first property ever. I'll just explain an example of it, but creating an Instagrammable moment or one to three key moments within the house, depending on the size of it, that earns you a higher click rate on Airbnb.

Because for me, it's, it's like no different than TikTok or Instagram or any other marketing online is what's gonna earn a higher click rate. And then what's, how long is it gonna hold someone's attention for the longer, the higher click rate, the longer the attention, the greater chance that they're gonna click book because in their mind, they're already there.

They're having a great time having a beer by the fire with their friends or family. Like taking a photo, Hey, everyone in my little social media world look how great of a time I'm having look at the sick Airbnb. I just booked like, look at me, people do that. Um, so we were like, well, Nashville when we lived there, one of the top bachelorette capitals of the world, and I realized that very quickly, going out downtown and on a weekend, I mean, you see like just tribes full of bachelorette parties everywhere and bachelor parties too.

But, um, it's such a fun place to visit with the music and the bar scene and all that. But there's also murals all around the city, like interactive murals with wings, all sorts of stuff. So I've seen lines of hundreds of people waiting to take one photo because they see a celebrity take a photo, you know, with the wings or whatever.

Um, so I was like, how can we bring that experience inside? So we found a property, it was a new bill, but had a huge living room wall. And it looked awkward just that long of a wall, no windows or anything. So it's like a canvas. I was like, what if we get a mural artist coming here and throw me like, whatever his Nashville above it has butterfly wings, the exact colors that I wanted when my wife wanted.

Um, and now we have bachelorette, mostly bachelorettes booking that like six months in advance and we're charging 25 to 50% more than our neighbors are. And they have the same floor plan. So creating that moment is so crucial because you're creating an experience and a memory for somebody else that they'll cherish forever.

Like they love that photo op and the photos they send us are so cool. Right. And self it's free marketing too. They'll post it. Who knows how many followers? They have thousands, hundreds, you know, whatever. Um, other people will see that. And Hey, where'd you stay? You. Um, so it's almost free marketing. There's other ways to make, you know, it Instagram bull or those key moments.

And for me, you gotta have that. What's your first photo on Airbnb. That's gonna earn you that click. So I really like doing outdoor spaces. Um, and to answer your question about design, um, my wife and I, nor neither of us are interior designers by any stretch of the imagination. But, um, we spent a lot of time on Pinterest, believe it or not, and looking at other successful Airbnbs in the area and just kind of cherry picked ideas and kind of pieced it together.

And it's a, it is a stressful, that's one of the most stressful, uh, parts of the process is selecting furniture and decor and, and the theme, but just doing something different. So we do a lot of accent walls, whether it's in bedrooms with wallpaper, um, outside, if there's any room outside to hang string lights, do a fire pit, maybe a hot tub, you know, what would make people want to stay here over the neighbor's.

Um, and in turn, you're gonna get booked more further out in advance. Your supply goes down, you could charge more per night in the future, cuz people perceive limited availability with a higher price with value just in the back of their mind. Um, so that's why we've been able to achieve a pretty high, um, revenue and ultimately occupancy rate too.

Ismail: And now a quick message from our sponsors.

If you're looking to earn a return on the crypto that you're holding or just earn more interest on your cash, you've gotta check out Celsius, earn 6.2% interest on your Bitcoin. 5.3, 5% on your Ethereum and 8.8, 8% on your us dollar. They also pay out interest on all the other popular cryptos too, in today's world where the banks give you nothing.

My best personal finance tip is to move your savings into Celsius and earn 1000 times what the banks give you. Literally, you receive your interest every week on Monday. So it's almost like getting another paycheck. Sign up via my link and get $50 in free Bitcoin pro tip. There are also often bonuses that Celsius runs.

For example, right now they have a promo code, stable 50, where if you deposit $200, you get another $50 in free Bitcoin. I was fortunate to interview the CEO of Celsius on episode 13 of this podcast. So be sure to check it out. If you haven't already, the link to sign up is in the show notes.

All right, let's get back to the show. Have you found, um, a lot of referrals come in for Airbnb rentals? Like, like you mentioned, all the people see the photo and they wanna stay ID. Find referrals really happen that often, every 

[00:34:50] The power of referrals

Michael: once in a while, specifically with that house and our mountain houses actually, um, families like to refer others to an awesome stay they had, and we've actually already had repeat customers at the house.

Um, but we have it's every once in a while at the butterfly house, the butterfly wings, um, we've had, you know, I saw my friends stayed there. I would love to host my bachelorette party here. Um, some of our friends are people that we haven't talked to in years from college or high school are like, Hey, I'd love to do my bachelorette party there cuz they see photos on Instagram.

We're like, I haven't talked to you forever, but sure. So we'd 

Ismail: love to have you that? That's another random question is I've I've actually, I, I, in preparation for this, I even joined some like Airbnb, uh, online forums and I, I saw people saying that once you have an Airbnb, all your fronts come outta the woodwork and ask for like discounted stays.

Um how do you think about that? 

[00:35:36] Friends asking for discount

Michael: yeah, every once in a while it happens, um, it happened more at the start. I think some people and they just kind of hinted at it like, Hey, we'd love to stay in one of your places we're gonna come. And I think they expect us to just throw a discount. At first we were, you know, eager to do that.

We want to share what we created with other people, but we had to take a step back and say, you know, we're treating like a business. So we usually only do. We'll do a, certainly a discount stay for immediate family for properties that we own by ourselves. Um, but outside of that, we usually don't do discounts.

Um, just cuz we gotta treat you like a business, you know? And I think they respect that for the most part. But if we have friends coming to town, we'll do something special. I mean we'll put out extra good ease or, or, you know, if we don't provide a discount, but yeah, if you're getting overwhelmed with that, you just gotta be straightforward with people and, and treat everyone the same.

I wouldn't give one friend a discount and they other not, if they talk, if they're like tight then yeah. I think, I 

Ismail: think people don't realize that if you give them a free week, that's a week that you're not making the revenue. So it's not, it's not really like, 

Michael: it does hurt your pocket. Huge opportunity, right?

Yeah. Huge opportunity cost for you. And um, yeah, so, but if it's secondary home and you're tech legally supposed to be using it, that's a perfect opportunity to let friends and family use it whenever you can't use it. And it's not booked, you might as well let someone else use it and just tell them to pay the cleaning fee.

You could check two boxes off. Right. I, I 

Ismail: think the, the Instagramable content is genius. And, uh, I dunno if I'm just biased towards that because I see in the events space, that's what people have to do. Right. You have to make the event something memorable that people take photos of. So I love that you apply that to the rentals as well.

Uh, and, and so kind of preparing for this, I, I was like, you know what? I've got young kids. I'll probably go to Disney often. So I'm like, all right, let me, let me see if anyone's doing this. Let me see. Uh, look for Airbnbs near Disney is anyone like theming the rooms? And, uh, a lot of people, I don't know about lot, but there was definitely people that were doing, I don't know about Instagramable moments, but themed rooms and stuff like that.

Mm-hmm I guess, I don't know. I don't know if there's any value that we can create from diving into something like that, but how would you advise me to think about it? Let's say I was like, you know what? I'm gonna go to Disney world. Maybe every year with my family. I might as well buy a property. Uh, cuz then I, I solve the seasonality problem cause there's always demand.

I can theme the rooms and make it special for family. Uh, but then there's also a lot of competition. So is there any advice that you have, um, for me on that specific example, and I think people would get value out of it for whatever they're thinking of doing. Yeah. 

[00:38:02] Leveling up in Airbnb competition

Michael: So one thing you can do is look, look at air DNA and you can actually look at top properties in the area.

So you can actually see what top properties are bringing in, what the size of them are. Um, you could filter that too. I wanna look at top properties that are only three bedroom and just peek at what they're doing to differentiate and try to mimic that and put your own spin on it. There's nothing wrong with, um, mimicking other strategies.

The other thing there is, um, um, just losing my tra uh, thought train there for a second. I'll come back to air DNA, but, um, oh, this is what I was gonna say. So you can actually look at prop, uh, the number of like one bedrooms, two bedrooms, three bedrooms. So on, on air DNA to see the quantity that are on the market and Mo in most cases, there's mostly like two to three bedrooms, right?

Cuz they're more affordable for investors. But if you can cater to larger groups, there's a less supply and you're gonna get booked out further in advance. So I think you limit your competition a little bit there. Um, so that's one thing to think about, but I would just look at, I think amenities are big.

Um, and then just finding a, a little bit of ways to differentiate. Uh, and the thing for me in a lot of markets is you start to scroll through and Disney, no different, a lot of the properties start to just, oh, I feel like I've seen this one already, like dejavu every single page. Right? Most of them start to blend in, even if they're just slightly different.

How can you, especially in your first photo, how can you be different in one area that someone stops? And they're like, Ooh, what's that like, click, I wanna see what more photos. So that's, that's what our goal is. How do we earn that initial click? And, you know, that's different. I want, I want to learn more about this property and ultimately stay here.

So whether it's multiple amenities, whether it's doing like maybe a cool theater room or like an all out game room, Um, you know, a lot of these properties will have a lot of these things, but if you could find one or two key ways to stand out and in some markets like Disney, it's certainly difficult it's with a high competition, but if you can stand out and be in that like top 10th, you know, or the 90th percentile of performing properties, you're going to make an absolute killing.

Right. Um, 

Ismail: so I'm not wrong. I'm not wrong for looking, uh, for thinking about that. No. Yeah. I think, no, not at all. I think you highlighted also the sweet spot is catering to larger groups because also from my perspective, as someone booking it, it becomes more economical compared to a hotel room. If everyone can just book a one house and split it versus everyone getting rooms.

So there's another reason to like, it's, it's just, you're reducing the risk of finding renters that way. I think mm-hmm um, 

Michael: yeah. And you're booked further out in advance, right? Cuz they have to secure places far out in advance. I've seen places in Gatlinburg that sleep 50 people they're booked a year plus.

It's almost filled up completely in their calendar. 

Ismail: There's a lot of pressure though. It seems like, cuz it's all about that one image that, that you're trying to get that click. Right. So do you do AB testing with those photos? Do you have multiple potential parts of the house that might fit and try them both?

Or do you just have one in mind that, you know, you're, you're banking on this living room or this photo being the thing that books people. Yeah. So 

[00:40:54] Optimizing images in an Airbnb listing

Michael: we, you get five photos on the splash page, right? And then a lot of times you can actually click and just scroll through the little photos before clicking the listing on Airbnb.

So if it doesn't, it doesn't have to be just the one photo I like to think of like what are, and it, sometimes it's hard in a larger house to fit like the five best things about this house in those first five photos. Um, but what, whatever you think are the reasons people would book, um, whether it's a rooftop, you know, lounge area, whether it's a game room, a theater room, just a really awesome, well done.

Uh, Just living room. Um, anything mural, for example, you know, have those be your first bunch of photos. And then what I like to do is walk people through the different rooms of the house so they can kind of get a good feel. We actually do Matterport photos in a couple of our houses, which basically is you can scan a QR code on our listing and take a virtual tour.

So people know exactly the layout of the house. They get a good feel for it. Um, but yeah, it, I mean, it's crucial to, to earn those first, at least first few clicks, right? You wanna make sure they want to learn more about that property, 

Ismail: the other side benefit of doing it your way and being unique and charging the higher rates is that you probably attract a different kind of clientele as opposed to just having the cheapest bare bones room thrown up on their, um, so that's probably a very big 

benefits.

[00:42:06] Trends in clients’ behavior

Michael: Yeah. Yeah. It's actually really funny. You bring that up because every time that we lower our prices, for whatever reason, maybe we had a last minute cancellation and we have to get it filled. Um, or maybe it's just one of the slower months and we just, you know, lower the prices trying to track guests last minute.

Those guests for whatever reason, tend to be very picky. Like there's one issue about the house it's not perfect. Like there's one smudge on a counter that wasn't clean. Those are the guests we hear from, and those are the guests that are very particular on their reviews. The people who spend more money for whatever reason, usually leave great reviews.

We hardly hear from them. They're extremely reasonable. If something's not perfect, they say, oh no worries. I get it. You know, it's a rental things happen and I'm like, wow, you guys are awesome. You spend, you know, so much money and you're the most reasonable people. 

Um, it's just weird. 

Not everyone's like that.

[00:42:54] Building your Airbnb team

Michael: Right. There's very easygoing people who aren't gonna be spending, you know, a fortune on Airbnb. I don't mean like that, but it, it's just interesting to see, notice those trends. 

Um, 

and like you mentioned earlier, I didn't really touch on this when you asked, but like the parties typically when you are having maybe a longer minimum night stay, cuz you're looking for family vacations and the price is higher.

You're gonna eliminate a lot of the younger people who are just looking to get together with their friends and just throw a banger. 

Um, 

so we try to mitigate that. You can also do 

a, 

a minimum age requirements to book. 

On 

on different platforms like V R B O or Airbnb. 

Um, 

so it does help avoid, 

um, you know, 

those circumstances.

So you try to cater to families, 

know who you're catering towards and, 

um, 

stay in that lane. I think 

one 

Ismail: other, um, I guess, bigger topic that I'd love to have your opinion on is building that team. Like if you're really gonna focus on out, out of town, the cleaner, uh, you mentioned a lot of these regulations, uh, they depend on each locality.

Like, do you know all that? Or do you have an attorney and an agent in each market? Like how do you build that team that helps you become successful in Airbnb? 

Michael: Yeah. Yeah. Cleaners are the number one part of your team. You know, first you have to use a realtor and I really lean heavily on realtors. I've worked with, um, my criteria for, you know, agents is they have to primarily work with investors and particularly, mainly not, it doesn't have to be mainly, but they have to have experience working with short term rentals.

Cause it's very different. They have to understand that market. And they, they need to know those local laws and rules and be able to maybe even call the city, like I've called the city several times, depending where we're looking at, but they need to know the zoning, cuz it takes way too much time to learn the zoning acronyms like RMZ W1 like all these crazy things.

Right. And is that zone like how do you even know? So for them to just send up, send you lists of properties and sometimes even projected rental income just as a starting point is awesome. Uh, and then you move to cleaners, networking to find great cleaners is the, the best thing. Especially if you're looking to build a business out of it and scale and maybe travel or move, you know, invest out of Mar out of your own market.

Um, those people are gonna be in your property more than anybody else by far. So they're gonna be able to text you, send you photos if there's damage or if an item needs to be replaced, you need to charge a guest. If there is damage. Um, that's crucial because you don't wanna come out of pocket on when damage occurs.

It's inevitable that something's gonna get broken. And if a guest you'd be surprised how many guests break something, whether it's small or even large, and they try not to tell you and see, you know, maybe you won't notice. So having good cleaners, that's crucial because if you're gonna be able to charge the right guests, right, you don't want to not know it could have been the last five guests, if a table broke, you know, how are you gonna charge the right person?

Um, so submitting that and submitting claims through Airbnb is critical. Um, and then cleaning reviews can be detrimental. If you have like a three star and cleaning on Airbnb, I'm not booking a place. That's a three star cleaning for my family. You know, you, people are very particular and they rely heavily on reviews.

So reviews are crucial. Cleaners help you. Um, we tip our cleaners, you know, quite a. bit and we AC we encourage them to leave out tip jars too, from guests. Um, I think that incentivizes them to do an even better job. That'd be meticulous in the cleaning process. Um, if they're, if there's a chance for them to make more money, 

Ismail: how do you vet cleaners?

Like it it's the whole thing. Like how do you find someone that's that, that great? Like, it sounds, it can't be that easy. Yeah. 

[00:46:06] Finding cleaners and using automation

Michael: Yeah. So word of mouth is usually the way we have found better cleaners. We ask our real estate agents, you know, or, you know, mutual connections through the agent. Do you have other investors in this market if it's a new market for us?

Um, do you have cleaners that you recommend? Uh, my wife actually does most of the interviewing cuz she is extremely, extremely particular. on how they, how they go about the process. And for us it's all about communication. The second most important thing beyond just like the direct communication is are they open to different softwares or calendar syncing and automation?

Cuz at the end of the day, I don't wanna spend time sending. Screenshots of calendars or bookings when they come in and then worrying about if they're gonna show up or not. So having that automated is the best thing ever, especially when you got backs back to back bookings, um, having your cleaners show up and they, they, they have access to your calendar is automatically synced.

If they're using their own software like resort cleaning, or you can add them as a team member on an app, like your port or smart B and B turnover, B and B tons of tons of software tools out there to do it. Um, so they get notified when the guest books, you know, when the checkout is how many guests there are staying there, what other, whatever other information you wanna share with them.

Uh, but having that automated is 

Ismail: crucial. I think I remember in, in one of the talks you were walking through your month, um, one of the properties was booked like every night, like 30 nights. So that cleaner with all that turnover, you never run into any issues with them showing up on site. Cause I imagine it's a tight window between checking out and checking in, uh, and they have other clients like, do you ever have problems with getting it done and ready in time?

Michael: No, not really. Um, every once in a while they, they tell us, Hey, we're running a little bit behind and you know, most guests are okay with it. We'll if it's like a worst case scenario and they can't get in for an extra, like four hours, we'll just give them a discount on that night. Um, but that's very rare.

Usually they're in and out and cuz they know the schedule ahead of time. Most of our bookings are not last minute either. So they, they know their, their schedule well in advance, um, in the mountains, for example, they actually, those cleaners are awesome. They provide all the linens, the towels, soaps and everything.

So the turn is much faster, especially for larger properties. They strip all the beds and then re you know, with the clean linens and towels to put all those out and then they'll clean all the surfaces and whatnot. And everything else they need to do, but they don't have to spend time doing laundry and Nashville, our cleaners, actually, we provide the linens and everything.

They do laundry on site while they're flipping it. And we have backup, you know, two or three X, the amount of linens and towels and whatnot. Um, but yeah, they have it down, man. It's, it's really amazing to see them turn the house. Cause we've cleaned on our own before, when we were in between cleaners and we had a, like a, we were in a pinch and while we lived in Nashville, we went over and cleaned our, a couple of those houses several times.

And I mean, it's, it's hard work one and two it's stressful. Like you don't wanna be spending your time. Like you said earlier, is it more comforting to invest locally? You're gonna be more eager to do the cleaning, to help save that money. If you wanna operate as a business. I learned this quickly, cuz we thought about what if we just clean it ourselves?

It's like, eventually something's gonna come up or you'll be out with friends or something and you have to go clean or it's late night. You have to go do it. You do not want to do it. Right. I'm telling you if you wanna just focus on the business and scaling for sure. I 

Ismail: totally agree with that. Um, as we near the end of our time, just one before I get to the final wrap up questions, I ask every.

Um, generally, I guess, is there any barometer or what's, what's kind of a realistic cause I have friends that are getting into Airbnb and I, I hear crazy stories about like within hours or like the first day they list it, they get tons of bookings they're booked out for the first couple months. Mm-hmm is that realistic?

Like what is realistic for someone that's investing in a property, putting it there? How much can they expect to really make, um, any kind of general guidelines around stuff like that? Yeah, 

[00:49:46] Reality of earning in Airbnb

Michael: so it depends on the, uh, the location the time of year. So if it's seasonal and it's during busy season or right before busy, like if it is a busy season, um, you could expect a list and get a ton of bookings really quickly, especially if you're pricing is fair.

Um, you also can opt into the new listing discount. So which I recommend doing, cuz if you do that, I think Airbnb N V R B O does it too. It gives 20% off, um, to guests. Um, for the first three guests that book and they'll list, you like top three in their property search. So if you're looking in Charleston, South Carolina, uh, your property would pop up first.

Um, so that's, that's interesting. And they showed the discounts like a slash through pricing. So it's really, oh man, I get a 20% discount. Um, but I mean, I actually, there's a funny story. I accidentally published our first mountain property in Gallen cuz I was onboarding a new software tool and I didn't know it published.

So my pricing strategy wasn't set up. Luckily the pricing wasn't too bad. Like I didn't have cleaning fees set up or security deposits. I had like 10, like 10 or 15 booking inquiries or bookings in the first like 15 minutes. Wow. Um, and that was in October. So like that is one of the busier months there people wanna go hiking stuff, but um, other times we've listed and it take a couple weeks, but most of the time we're profitable month one.

And I think most people, um, will probably find that as well. Especially if you do a good job and it looks nice, right. In photos, professional photos and um, people are very eager to book, especially if they're looking. 

Ismail: any advice for growing on TikTok? Cause you're killing it there. Oh, thanks man. 

[00:51:13] TikTok advice

Michael: i, I don't know.

I think cha like find like a niche or niche. However you say that. Um, and stick to it. Um, you'd be surprised at how many people also have interest in probably the same things you have interest in. Um, so for anyone looking, I just recommend being consistent. Some people recommend posting like two to six times a day.

I prefer to post three to five times a week and have it be more quality content, but be consistent, um, and treat every video, like a new audience, uh, like new eyes cuz tos algorithm is meant to go out to the masses. And it does like testing. If some, if this group likes it, their attention was good. They'll do a broader audience.

So that's why you see like a hundred views, a thousand views, 10,000 views, a hundred thousand views, like for those viral videos. But it only takes a few videos to go viral and start building that following and like credibility. And then it just starts to like compound from there. Like I never thought I would be a content.

Creator say those words. So it's kind of weird, but, um, I actually really enjoy it. Yeah. It's kind of fun to create content and share ideas with people. I like 

Ismail: the, the creativity aspect of it. And I've noticed that the videos that do the best for me are the ones that are more controversial. Like I've done some videos on compounding returns and there's a lot of hateful comments of people.

Oh, well, let me see your bank account da, but then those are the ones that get me like 20,000 subscribers. So it's like, yeah. Do you listen to the haters? Or do you keep putting that content out because the 

Michael: results are working. Yeah. Sometimes you gotta feed into it. Yeah. And it sounds bad, but I politely, you know, poke and prod, same, someone will, someone will say like, you're the reason, you know, there's housing crisis.

And I'm like a little guy with four houses is not the reason, but usually I'll just be like, well, why do you think that I'm, I'm curious to hearing what you are through your thoughts and then they'll pump off like four comments trying to explain. And I'll just say like, you know, thanks for sharing your opinion or share my opinion.

Just politely, you know, I try to be polite to people, even if they're super negative. And then all of a sudden when you you're gonna see all these other people jump in. Yep. And then they're just fighting on your page and it's like, it's kind of funny. I, I do the same thing. I 

Ismail: engage the trolls cuz it boosts your video.

Yeah. All these 

Michael: comments and rewatch the algorithm. Exactly. Yeah. It's playing in the background constantly. So yeah. I always say I try to respond to as many people as possible until I get in trouble for being on my phone too much. But 

Ismail: um, so the last two questions that I ask everybody, um, if I go back to your high school, uh, playing baseball and I, they speak to all the people around you, then the teachers, the friends that you had, would they be surprised at your success?

Or would they say, uh, Michael Manny, he always added in him. 

[00:53:43] Looking back at Michael’s pastker

Michael: I think most people would probably. And I say this humbly, um, would probably say I'm not surprised and only because I was kind of that kid, I, I always worked hard. Right. Especially in sports, but classroom, all that stuff. Um, and I really tried to, to go against the grain a lot of the times, which, you know, I butted heads with some people, but I think you need to do that.

I mean, pretty like most successful people do not go with the status quo. Um, you know, even like conversations with my parents, you know, if I ever butted heads with them, but I, like, I was very confident on my reasoning and I tried to explain that. So I don't know. I think just having a free and open mind, um, and just a high ambition, um, I don't think people would be super surprised.

I hope not. Maybe I'm wrong. 

Ismail: No, I, I tend to find that most people have the same answer. Uh, if they're being honest. Um, so obviously you're financially free and that may seem out of reach for people. Uh, just imagining like you have everything paid for and you can live life. Uh, it's not all about money though.

So the last question I ask everybody is what is a rich life to you? 

[00:54:50] What “rich life” means for Michael

Michael: A rich life is waking up and being able to do whatever you want and. , you know, you could still have a job or create a company, do whatever. But that means, you know, when my wife and I have kids, it means I could drop them off at school. I could go, I don't have to ever miss something with my family, a special occasion, but be there for all the little things.

Being able to travel all over the world at any point in time, I don't have to wait to take PTO. So it's like a rich life for me is just spending time. How I, or my family want to spend that time. And, and without having to worry about money constantly or worrying about where the next paycheck's coming from.

So money is an aspect of it, but it's more of, you know, the vehicle to get there with investments. Um, but for me, it's all about time. Cause that's the one thing we don't get back, you know, I don't think anybody's ever been on their deathbed and say, Hey, you know, what is one thing you did? You wish you worked more in life?

You know, that's probably like the last thing they would say. I wish I spent more time doing this. I wish I did X, Y, and Z. I wish I chased that passion. So. That's a, you know, that's a fruitful life for me. I, I 

Ismail: totally agree with the not missing, uh, moments because, uh, when I was working in my financial job, I had a coworker at work, looking at his daughter's first steps on the phone live.

And I'm like, gosh, yeah. When I had my first child, I quit my job. I'm like that. I'm not gonna allow that to happen. So that was kind of my motivation. Um, everyone's got something different, so I'm glad that you shared yours. Um, so what can we hand people off to that wanna learn more that wanna follow you?

By the way, I strongly suggest people, um, you're big on TikTok, but I find that YouTube way more valuable personally, because you get to go into things more in more depth. So I really urge people to subscribe to you on YouTube, but what else can you hand people off to? Yeah, thanks. 

Michael: Um, yeah, outside of social media and you could find links to all my socials on any of those platforms, uh, by the way.

But, um, in like my biolink on TikTok and Instagram specifically, I do provide additional resources, uh, some free, some recommended things that I personally use in my. Um, and then other options for those looking to learn. Um, so I do have a group mentorship currently, uh, which is awesome. We meet once a week on a live zoom call.

Um, and I usually have planned topics to cover. I give you access to all my investment templates, uh, and all that's included and it's just open Q and a, and just looking to help people out there so that group's growing really fast. Um, and then beyond that, uh, something that I've gotten a ton of positive feedback for, and I never thought I'd be someone who creates like a, an, an educational course that sells it on social media.

But for about a year, I was taking free calls from anybody that was willing to chat about it. Cause I just loved it so much. Anybody that reached out on social media that became overwhelming with the amount of people that were reaching out. And I had a lot of people say, if you created a course, like I would be interested.

So I said, fine, like if I'm gonna do it, I'm gonna do it. Right. So sat down for a few months, created the course, um, curated it to a very easy step by step process for, um, I have two of them, but one of them is specifically for Airbnb in shortterm rentals. So even if you're a complete novice. You should feel, you know, extremely confident and be able to invest, you know what?

I consider like an expert level from start to finish in short term rentals and I go over different strategies like everything. Um, so if you guys want to check that out and you could view the entire curriculum, everything in there super open transparent. I was just gonna say, 

Ismail: actually was looking at that in, uh, the description of what's included it's obviously is very detailed.

So, uh, the good thing about you doing all those free calls is that you got to find out what people really wanted to learn. So I'm sure that helped yeah. Build the course and everything else that you're doing as well. So, 

Michael: yeah. And, and I also, you know, I take feedback, um, constructive, you know, feedback as well as positive, um, to heart.

So I always ask people, if something's not included that you wish was, let me know, I'll go back and update it cause you have lifetime access. So I plan on updating that as needed. Awesome. I, 

Ismail: I will obviously link to all that stuff in the show and that to everybody that's interested. Um, otherwise, Michael, thank you so much for your time.

I thought this was really valuable, so I hope people, I can't wait to get it out there. 

Michael: Yeah. Yeah. I appreciate you having me. I enjoyed our conversation. Thanks. 

Ismail: If you've been a longtime listener of this show, you know, my opinion on the dangers of inflation, if not, you should revisit my popular cash as trash episode.

One of the most common ways people protect against inflation is to invest in real estate. So I'm happy to say that as I'm recording this, I'm in the process of purchasing my first Airbnb property and on track for multiple within the first year, the education from Michael was a key component in my journey.

Fortunately, he has a very thorough course on Airbnb specifically, and he has offered a 10% off promo code for listeners of bound to be rich. If you got value out of this conversation and you liked Michael style, I strongly suggest you purchase his Airbnb course. There's a link in the bio and you can see for yourself the entire course outline.

It's extremely detailed and very thorough. Pretty much. If you take this course you'll know everything you need to know in order to grow your own Airbnb empire. Make sure to use promo code Airbnb 10 for 10% off. That's Airbnb 10 for 10% off. And of course, you know, I'm always here to help you and that I like to Sweden the offers.

So if you do decide to purchase this course through my link, DME proof of the purchase on Instagram, and I will personally send you a $100 Amazon gift card. Now let's make some move. One quick reminder, before I let you go to join my email newsletter, it's gonna be like a personal note for me to my friends of all the cool things that have come across that morning from hacks and tips.

Interesting stories, products, books was TOIC money and who knows what else? It's totally free. And if you don't like it, you can always opt out. Anytime the link to join is in the show notes, and I hope to see you in the list and there you have it. If you enjoy this episode, please remember to leave a review.

I may even give you a shout out and read yours out on the show for any and all resources that we discussed. Check out the show notes are head on over to bound to be rich.com until next time.