How To Become Financially Independent On Airbnb
Airbnb is a great way to earn extra income, but it can also be a great way to get started in the world of entrepreneurship. Here are some tips for how to become financially independent on Airbnb.
- Choose a Location Wisely
The location you choose when listing your space has a huge impact on how much money you will make. If you live in an area where there is high tourism or a lot of business travelers, then you will probably have more success with your Airbnb than if you live in an area that doesn’t get many tourists or business travelers at all. It’s not always easy to find the right location, but it’s worth it when it comes time for tax season!
- Host Only The Best Guests
You don’t want to host just anyone—you want to host only the best guests! This means that they should have good reviews and be friendly people who respect others’ homes and belongings while they’re visiting them. You should also avoid hosting people who tend to cause problems with other hosts in the past because this could lead to bad reviews for both parties involved (and no one wants that).
How To Become Financially Independent On Airbnb
In part 1 of this 2-part blog, I discussed the importance of financial freedom and why it must be your primary focus. In part 2, I share the simplified steps I took to achieve financial freedom with Airbnb in 4 months. I also share what motivated me to keep working toward this goal and when and how I decided to quit my corporate job.
The Cost of Making Money
When I talk about financial freedom, my biggest focus is not on actual income figures, rather the time you will get back and the freedom you can get if you have enough income. In the beginning, You should be aiming for freedom so you can get your time back, then once you’ve attained financial freedom, you’ll have all the time in the world to go after more money and increase your standard of living.
A lot of people focus on how much money they can make, but most don’t consider what it costs them to earn that money. Study after study shows that money can only make you so happy. Once you earn $75k annually, happiness levels tend to plateau. Now, this may sound strange coming from me because I’m all about making money, but money is not the most important thing to me. Time is.
Your Most Valuable Asset
It’s important to realize that your time is your most valuable asset. Building a successful business is all about incremental improvements and creating a system that scales. Time is the only thing in life you can never get back. If you’re not yet financially free, your time is the one thing you should be focused on getting back right now.
Why I Do What I Do
Why do I host on Airbnb? So that I can earn the freedom to spend as much time with my family as I want. So I can watch my daughter grow up and raise her myself instead of a daycare facility. I do this so I can travel with my family whenever and wherever we want. In one word, freedom.
Another reason I do this business and the reason why I created the The Airbnb Course is so that I can teach my parents and other loved ones how to build their own business so they too can be financially free. You’ll need to find your “why” too. Your “why” is like a goal—whatever it may be—it’s a powerful motivator that keeps you going when things get a little rough.
Here’s How I Did It (and How You Can Do It Too)
Here are the simplified steps I took:
- I calculated all of my monthly expenses (to figure out how much money I needed to earn from Airbnb)
- I did market research to forecast how much money I could make with Airbnb and how many properties I needed
- I gathered furniture and items I would need for the listing
- I found a property, moved in and listed it on Airbnb
- I repeated this process until I had sufficient properties to cover my monthly expenses
1. Calculate your monthly expenses
Before you can be financially free, you first need to figure out what your current lifestyle costs are. You need to determine how much you spend every month on mortgage/rent, utilities, groceries, gas, entertainment, dining out, cable, internet, etc. Calculate all of your fixed expenses as well as your variable expenses. This number is very important because it determines how much money you need to earn from Airbnb in order to replace the income you’re getting now from your day job.
2. Conduct market research
The second step is to do your research. You need to figure out how much money you can earn with Airbnb and how many properties you need to cover your monthly expenses (the amount you got from step #1).
This might sound like a complicated and overwhelming step (and it can be if you don’t know how to start), but don’t worry, because I’ve created a free video that goes over this exact step.
It’s video one in a free three-part video series I created. You can sign-up for the series here so you can learn how to do the market research for your area. Once you watch this video, you will know how much money you can earn and how many properties you will need.
3. Gather furniture
You’ll need to start gathering all of the furniture you will need to furnish your new place. You’re going to need a bed, a dining table, a sofa, coffee table, etc. It’s better to have all of these things ready so that when you find a place, you can move in and furnish it over a weekend. Facebook Marketplace and Craigslist are great places to find good deals.
4. Find a property
There are many factors that need to be taken into consideration when looking for a property. For example, location, competition in the area, and size of property. There isn’t a one-size-fits all method for doing this, it varies by market.
One of the ways that The Airbnb Course has helped students succeed is by teaching them the step-by-step method of finding a property. This can be a daunting task which is why it’s a really good idea to have someone in your corner that has done this and can teach you the most effective ways.
If you already own an investment property that you want to use, that’s great, however, keep in mind that there are still some important factors to consider. Let The Airbnb Course guide you in figuring out the best path.
5. Repeat the process
Once you’ve opened up your first property, it only gets easier and easier to open the next ones. You repeat this process until you open up the number of properties that you need to be financially free.
The beauty of this process is that you can do the steps when it’s convenient for you on your time off. I did all of this on the weekends and in the evenings after work – all with a newborn baby. It wasn’t always easy and there were some long days, but keeping my “why” in mind kept me going.
A Very Simple Life
Growing up, my family didn’t have a lot of money. We lived a very simple life. As long as you had a decent job, worked hard, and treated people with respect, everything was going to be fine. Going to college wasn’t expected nor encouraged. As a teenager, I used to cut the neighbors grass and do small jobs to earn money. By the time I graduated high school (barely), I had worked at every fast food restaurant under the sun. Naturally, I didn’t last long at any of these jobs and bounced around from job to job. Little did I know that even though I was simple as a boy, I would later be the only person in my family to become financially free with Airbnb.
Fast forward 4 years and $80,000 in school loans later, I became the first person in my family to receive a college degree. I studied business management and got a job shuffling papers at one of the top commercial real estate brokerage companies in the U.S. This is where I was introduced to real estate investing and the massive amounts of profits that are possible. At that point, I knew that real estate was a path I wanted to pursue long term.
My relationship with money and time
After college I started listening to a lot of entrepreneurship, business and self-help audio books. I listened to books like Rich Dad Poor Dad by Robert Kiasaki and How to Win Friends and Influence People by Dale Carnegie. These books made an impact on my life, more so than college ever did.
Through these books, I learned that time is our most valuable asset and that money is a mindset. I learned about financial freedom and why I should make it my number one focus. The more audiobooks I listened to, the more I knew that entrepreneurship was the path for me. I hated the idea of working for someone else and not being in control of my destiny.
I tried several venture business ideas but none of them got any traction. It wasn’t until I started hosting with Airbnb in my home that I realized that this was a real way I could achieve financial independence. And it was. After hosting outside of my home I was able to quit my day job in only 4 months.
When I Decided to Quit my Job
After having nearly full occupancy at all of my three properties, I realized, to my delight, that I was earning enough to replace my income from my day job. It only took THREE Airbnb properties and I was financially free! I gave notice to my employer and in mid June 2017 I worked my last day as an employee. 100% of my time was my own to decide what to do with.
At the end of my last day, I left my employer and picked up my daughter from daycare for the last time. That was also the last day she ever spent in a daycare facility. Honestly, I’m happier about the fact that I’m raising my daughter myself than I am about having a business that supports me. To me, that’s priceless.
We’ve opened more properties and as of January 2018, my wife was also able to quit her full-time job too. We’re both now stay-at-home parents and have been able to travel all over Mexico creating amazing indelible memories. All while the vacation rental business runs itself. It has been a truly amazing ride!
One final note
I used to think that achieving financial freedom required having millions of dollars in the bank before I could sail off into the sunset. It turned out to be much simpler than I thought, and it certainly didn’t require millions of dollars.
I’m not a genius. I’m just a simple person who values time over money. I’m a simple person with a simple upbringing that has a “why” moving me forward every day. As you think about how you can become financially free, keep in mind that If someone simple like me can achieve financial freedom, so can you.
