@@michaelrichey6783 that’s what we plan to do! I actually sent this video to my husband bc I can see us retired making money like this or more really and me having an idea to make more. He would be like no way lol. I would NEVER borrow against my house though.
Exactly right! They won in life and don’t know it! They don’t “need” the AirBnB money, they just want a pet project. They can still do it, just use the excess cash they’re sitting on. I assume they live a ridged life of going to bed by 9p sharp and their biggest worries involve a neighbors car parked funny, or deciding which show to watch on Friday nights. Basically, they are low risk people about to step into a high risk GAME!
Borrow against her house for an Airbnb? That's insanity If she wants to buy with a mortgage fine, but to put her residency as collateral? That's insanity.
Grew up poor built our wealth in the military. Saved and invested well. I live in CA. Purchased our primary in 2013. Our home doubled in appreciation. We took 200k out in a HELOC. Used the money toward a downpayment and purchased a duplex in FL as a long term rental in a opportunity zone, tenants are awesome, no issues but we have great property management. 2020 we purchased a condo in a resort zone in Hawaii...it does very well, but we weathered the covid shutdown. Purchased a mountain vacation rental...Airbnb beach condo and cabin...cabin can profit as a ling term rental too. You might have missed the party, but I got in just in time and loved how we used the HELOC to supercharge our retirement. Making 10k a month more and combined properties valued at 4M with only 2.5M in mortgages that our renters pay down for us over time. I'm just waiting things out long term as we retire in 25 years. Going to rinse and repeat buying more properties with HELOCs, likely long-term rentals in opportunity zones because airbnb is getting too saturated in certain markets. Maybe a few more Airbnbs if the numbers are too good and can be pivoted to furnished mid to LTR in down times. Just be strategic. I get bored easy so this isn't for everyone. I love hosting my Airbnbs remotely because I'm a big techy and have a good system in place.
This. Dumb financing method that only expands your risk. Why not just use the existing property as collateral if you absolutely have to? Also a pretty tough time given existing interest rates to do well in real estate bought on debt compared to equities. Not impossible, but harder.
@@bespoke4187 These people are in their mid to upper 60s. If you're married you probably still have plenty of time to get divorce fleeced and whatnot before that age.
Totally disagree. I know dozens of folks very close to me who have taken mortgages against their homes for investment real estate. They have made millions.
As an Air BnB owner it is a lot of work, but it can be really fun too. They are right that there are drops in the industry… to the tune of about 40%. It’s not a horrible idea if she feels she wants a creative outlet. I loved decorating and designing ours! But I also hope to hire out more of the work (cleaning and landscaping) in the future. It’s definitely a small business and requires that level of involvement.
I bought a vac rental in Jan 2021. Barely made more than long term rent due to winter lull. Lots of work and headache, but enjoyed fixing up the property and personal use of the lake property. Only made 7K a year after all expenses. Made out by selling 2 years after buying for 175k more than I paid . After all expenses, made a total of 140K for a part time job. Basically all that was selling for a profit
Maybe they're wanting to set up a legacy for the kids? If so, turn the properties over to them now. Have them pay you a royalty. They get income, you get income and you don't have to worry about the management.
As someone that's been hustling on Airbnb for over a year renting out half of my house I completely agree with Dave 😂 It's a near full time job with some of the nonsense you have to deal with.
Needed to hear this today. Thought about getting an AirBnB recently and then read an article that our city is thinking of outlawing them completely and then I see this. So long, AirBnB, I'll stay in some properties on vacations but no thanks for owning one now!
@@efuucdgbjiddvhi I paid for two rentals with cash in my Oklahoma zip code in 2008 and one rental in Rome Italy (with an attached mini apartment for myself)paid with cash since 2001 all occupied full time. I’m prefer uninterrupted steady flow of income and appreciation with zero mortgage long term and not FOMO,debt, and greed.
So these nice people already retired comfortably, and wants to take a lien against their house to fund an AirBnB. It’s like she wants to go backwards in life 😂
@@nikolaig1 Yes, but she was thinking of taking about $250K and put a lien back on their paid off house just to do this. It's insanity. I understand if this was someone in their 30's and is looking at this long term, but she's 65 and he's 68. "Long term" is not an option anymore lmao
Having a neighbor who runs an AirBnB hotel is a nightmare. Constant noise and disruption to a quiet neighborhood. Should not be legal to run a hotel business in a residential zoned area.
Yeah! How dare people use their personal property how they want to! We should band together and create an organization that tells people what they can or can’t do with their property so we can be happy! We can call it an HOA and you and 4 busy body old ladies can run it.
My grifter neighbors were running one. Some weird man with a shaved head and wearing a very short baby doll dress walked out of the townhouse one day. I worked hard to buy my place, do not want to live next to that. The area is not touristy nor is it near mass transit.
@@nicholsonks there are places that ban airbnbs. Go buy a place there. Or save up and buy property with more land. But getting mad that people are doing things with THEIR property just because it’s close to yours just sounds childish.
I live in Az. I have lived here my entire life. Media is putting it out there that we've never seen temps like these before. I can tell you we have. These temps are nothing new.
For sure. The caller mentioned borrowing against their primary residence to buy the investment property though, so not sure if the math would come out if they rented the new property at long-term rates. Especially in today’s interest rate environment.
An AirBnb is what you start when you already own the property, with very little fix-up cost required. Mortgaging real estate for the purpose of starting an AirBnb is crazy.
Air bnb has been good to me but there is a right way to do it. And that’s if you have an extra space that you would like to share with others then do it. If it’s a nice space that isn’t too cheap people will treat it well. Renting out a guesthouse is perfect. But don’t just buy up residential properties to turn them into mini hotels keep it in the bnb spirit of sharing your place with guests
I agree with Dave on the constitutionality of cities making these properties illegal. This is why we have the largest lobby in America to fight for these rights.
I could imagine people who were go getters their whole life would get bored during retirement. But i still think this would be too much work and frustration at retirement age.
I own two homes the one that I paid cash for is my airbnb ...a 3 night stay yields me $2,300. It has an in-ground pool...Working on the garage to convert it into a game room. So I won't see too much of a drop. It's less than 15 mins from ATL airport and outside of the zone restriction that was implemented recently. Even before doing airbnb I've been handy with fixing some things. I grew up with my mother grandmother and friends having brownstones and experiencing tenant NIGHTMARES. Neither situation is for everyone.
I live outside of Nashville and our community restricts Air B&B's to only two areas of the city. I used to do rideshare and one of the illegal Air B&B's was in a very exclusive neighborhood and I found out that the owner was cited numerous times with fines (no criminal charges) and he laughed them off and just raised the rent to cover the cost of the fines. Whenever i got a call to that neighborhood, it was that house everytime and a group would come out with booze and they wanted to go to Lower Broadway. 😞
We have a rental and airbnb property. The Airbnb takes SOOOO much more time to manage, if you are doing it right (do you care about your property and about your clients, and you should). Luckily my wife is a successful real estate agent who knows the business and market well enough to manage it all for me. We've had the rental for over 10 years and the airbnb for 1. The potential for the airbnb is HUGE I'm just not sure it's worth the headache. With the negative out of the way I do love the concept of an airbnb. Just know that it's a 2nd job. We did not pay cash on our airbnb. We have about 50% of it financed and our rental property nets enough to cover the airbnb if things go south.
I live next door to a $500K house that is now one of these "residential motels". It is owned by an irresponsible host who realized how much work is involved and he does not want to do it. The yard is in terrible shape and the walks are not cleared in the winter if renters are not there. This house is right next to an elementary school so the children have to manage dangerous ice and snow on the sidewalks going to school. One renter this spring arrived with cookers, and coolers and proceeded to plan a prenuptial dinner event which brought 30 cars and over 60 people to this house. I hope people will see this message and reconsider plans to open a motel in the privacy of our American neighborhoods.
I just don't know why you would give up the security and cleaning service and all the perks of a hotel to rent an ABNB unless you travel in groups. A hotel suite sounds more enticing.
I agree. What's all the fuss about? Looks like people likes every wave that comes around. I rather be in hotel, they are proffesionals and I do not have to deal with random owners that are not. Texting also back and forward to get keys etc... Not for me. I want a smooth ride.
I stay in Airbnb if I’m traveling with my kids and want a kitchen and separate bedrooms. They fill a role, especially in cities without many good hotel options.
That woman is ridiculous! She just needs to calm down, and be thankful for what they have. Just enjoy your life and travel. You’re not THAT young to be starting a new investment.
Why do you think she’s getting excited she’s just talking. And she’s not dead. She still has time to do this if she wants to. I mean look at you you get bad advice, and yet you’re still here
@@Jane5720 well… according to Ramsey’s response, she’d be foolish to do what she said she wanted to do. She even said that her own husband thought it not a good idea.
@@john-robert1961 you said calm down, which makes me think that you thought she was overly excited and she wasn’t. Being overly excited or a fool are two different things.
@@Jane5720 she sounded like to me, to be a bit over zealous about investing into an Air B&B. I concur with Dave, in that, she’s in a sweet spot right now. Why throw a beehive; as he stated in THIS video, into their current, settled situation. She needs to calm those ideas of hers down, and not throw herself and her husband into a financial tailspin. Maybe instead, she could occupy her mind with being of service to her community, perhaps through volunteer work. Or animal shelters. Cause… guess what? That’s right… can’t take your wealth with you. The wealth stays here, along with the ego.
These folks have all their stuff paid off, make 100k a year, are in their 60s, and still want to try to make more money. Folks, y'all made it. You're good. You don't have to make more money. Why even want to go through this hassle? I would just enjoy my retirement stress-free and travel, or do whatever you want
Off topic a little, my wife owns a cleaning business and she said that air b&bs are cash cows for cleanouts. Quick turnover and need to be cleaned for every guest.
Not sure about the US but here AirBNB is considered short-term rental which is business income and note residential rental income. This means the income is subject to sales tax and when you sell the house you have to charge and remit sales tax. Lots of people do not know this until they get caught in an audit.
There was definitely a bit of bias and blanket statement in here, I make a point to speak to every airbnb owner when I stay at them, a lot of them have everything fully automated i cluded cleaning and maintenance, surprisingly passive.
Similar, we are doing ok with both our short term rental and a bed and breakfast. Dave is right, the market is very soft and the risk is high and your cleaner won’t show up and you will be cleaning toilets and floors on your Saturdays. But you can meet some neat people and pay off the mortgage. It is hard work. But the return on your labor can be better than from many current, slave wage, 9-5 jobs.
I know from experience her plan is not that bad. Her timing is off, so I wouldn’t do it, unless she paid cash. Had she thought this up a couple years ago, I’d say go for it. I sold my rental this year for 415k, after purchasing it in 2017 for 285k. before I started watching dave, and felt I’d probably made a big mistake. Well I didn’t. I had just over 20k in the account even after paying a management company every month, plus investing in furniture, and fixing issues. Dave’s advice isn’t the gospel
I have an Airbnb for 6 years, I do all the cleaning, and property management, I am in my 60s and I love it, it keeps me fit and gives me something to do, it also is 95% occupied, I have made terrific money out of it, I say hard work pays of, just do what you want, have a go cause you will never know what you can achieve!!!
My friend had an AirBnB they had a guest give them a bad grade because they found a dead ladybug on the floor. They wrote a bad review about a bug infestation. If you live in the South, I don't know about other areas, you have ladybugs in the fall. My friend is meticulously clean and it killed her to have a review saying they had bugs.
If a lady bug review crushed them, they don't belong in the business. No offense but you gotta be able to deal with more than a lady bug to handle a business 😂
@@getstuk87 I didn't say anything about my friend being "crushed". Their AirBnB was linked to their other seasonal, adventure business so a side hustle. I think anyone who is selling to the public a high-end adventure package would be bothered by a review saying the place was "infested with bugs".
We started Airbnb in our basement 4 years ago and now we have 30 airbnbs. If done properly it can be an extremely lucrative business. But we have four cleaners a warehouse and our own laundry facility. Scaling is the hardest part.
I had 2 vacation rentals houses. Both houses sustained considerable damage. One was a treehouse on a lake that slept 4, but the renters had a big party with over 50 people and broke our dock in half and it floated down the lake. The neighbors called the police. The other house was very large and had 6 bedrooms and every single mattress got completely piss soaked and the marble floors got broken multiple times. I also had to re-clean the houses often after the maid service company supposedly cleaned them, but did a very poor job. We sold both houses and I will NEVER do vacation rentals again. P.S. After taxes, insurance, cleaning, maintenance and damage repairs, you don’t make nearly what you think you were going to make. It just isn’t worth it.
We have 2 AirBNB cabins in a popular rural destination area. Demand is through the roof because the area is still underdeveloped but that is my market condition not other people's. We also pay 35% of the rent to a management company so we don't have to manage bookings, complaints, repairs (other than the cost of repairs), or any of that hassle. 40% is common if you don't want to do everything yourself. Dave is right, it is a lot of work or a big expense if you want help managing it, our numbers still work even with all this and during recessions rentals went UP because people downgraded from Disneyland to a local vacation they could drive to but again, that's just our market.
I'm an airbnb owner and I've found it good in general. I only work a few hours a month and built up quite nice savings from it and not had a 9-5 for the last 3 years. That said if i was well off i wouldnt do it as is it can make you quite anxious about stuff breaking especially when they are there and u get a message saying the beds broke or shower pumps broke etc and it is a bit of a faff.
Dave is about playing it super safe and secure. That’s fine for the average person but if you wanna be very successful in life and have fun, you gotta take risks.
I started an Airbnb in my house for my upstairs to keep my mind busy and earn a little extra. I did all the cleaning. It was exhausting on top of my full time job. Don’t take a HELOC with saturation of Airbnb to start it now. Buy the property and move in it, rent out your current home long term, but I’m sure as someone that’s older, that is not something they want to do. This way it’s owner occupied and less money down, lower risk and interest rate.
We had rental properties at one time and when we retired, we retired from rentals. We had various nightmares. And constant renovation etc. yeah we made money but only in appreciation. Otherwise it was terrible.
I retired debt free at 49 in 2020 and selling my two local rentals this year. Bought with cash in 2008 practically half price after housing crash.. Preferred the KISS approach without FOMO and greed. Two fairly new small 1bed/1bath/den with in unit laundry room with gated security which are in high demand now.. No issues and little to no maintenance. No family/kids to tear up the place.
My father bought a house that he was going to help finance with Airbnb. He got a great price on the house, but the work makes him miserable. Every week I hear a “worst tenant ever” story. I think there are less stressful ways that he should have invested in to
Successful Airbnb Owner here. Dave points out all the negatives and none of the positives or ways to combat the negatives. The insurance claims on Airbnb, should there be an issue are super easy and money happens fast. Having short term renters vs tenants in there for 1 year. I would take short term every time. You aren't in and out of a property every couple days in a long term rental. Also short term renters already tend to not be lower income like he points out with selling drugs or whatnot out of the property. There is a rigorous application process to get an account on airbnb as well. Paying cash for a $280k property should yield about $3k a month to make it worth while. Even if you pay a management company half that its worth it to them. I make about 3x airbnb than long-term renting.
It’s never enough for some people no matter how much. They would probably not help a single soul but give to the preacher with the private jet but enough never.
Ironic that’s the attitude around here when this community seems to fetishize people who work insane hours until the second they retire, then they want them to sit around and do nothing.
4 weeks after posting this NYC enacted a law to start banning Air BnBs there (not all, but it requires an air BnB to be someone’s primary residence in NYC because people can’t afford housing with all these investors having multiple properties)
Airbnb is nice. but it's just an ad platform. One client could trash the place with a party. Airbnb wont do anything unless you sue, and your insurance can drop you. it's too much risk for such a small income
You HAVE to run it right. The neighbors love me because I take care of the property and don’t allow nonsense. There was an investor that bought a house next door and let awful tenants run it into the ground. I took over that property and have turned it around. Now the neighbors are keeping me up to date on anything else in the area that will be coming up for sale. You have to be an excellent neighbor. Bad guests are a thing but it’s really around 1% bad, 4% ok, 80% good, and 15% outstanding.
I agree that if they buy one airbnb pay cash. I don't agree that it's that much work for the money you make on one airbnb in a good area. I have one and it's a few text messages to the cleaners and guest each turnover day. A small thing needs fixed here and there and that's a text to my handyman. One time I had $400 in damage and airbnb paid for it.
I have 2 AirBnbs generating 100,000+ in revenue each year. I am adding another in 2024 that is projected to add another 60-70k in revenue. Cost is typically 50% of top line revenue counting mortgages as cost including all other costs (consumables, insurance, etc). The cash on cash return is 20-40%. Having a new renter ever 3-5 days is awesome as you don’t get stuck with a long term renter that is terrible. Dave Ramsey is small minded, he doesn’t think any other way than his own to make money.
there are plusses and minuses. my fear would be the city I'm in bans it. it also is work so people should understand that going in. I'd also be worried about getting 1 bad guest who really destroys my house. i can see both sides to it- but I agree he is small minded. People need to weigh the pros and cons.
@@tommyfu9271 💯, zero chance i would invest in a city. Only looking at vacation destinations that depend on tourism. That’s the only way I go into a STR investment.
@@tommyfu9271 I would also get commercial insurance. If a guest damages the house so bad it’s a huge issue financially companies like Proper Insurance will pay you the revenue you would have received during the repairs.
I have a 30 acre Airbnb with multiple cabins and RVs. I make over 20 K a month. I can also confirm that Dave is 1000% correct. I’m 30 and I don’t recommend doing it if you aren’t wanting a full time job.
Good video and comments here. We have a place in CO that rents on airbnb, vrbo,etc. It does not cash flow (has a mortgage) and we started in 2017. But we use it too. Appreciation has been great but I am also at our place this Labor day weekend doing painting, carpet repair, cleaning, etc. I am happy with our decision but you need to go in with eyes wide open and extra cash for repairs, remodels, new furnace, etc. If you enjoy using it and keep $50K in reserves for maintenance, slow seasons, Covid scenarios, etc., it can be something to consider, but really research it.
Love my Airbnb business. Currently have 4 + my day job. Super intense to set up correctly and costly to do it right, but returns have been amazing. The key is to be super unique and/or figure out how to get a permit is the most regulated areas.
If I didn't own an abnb remotely. I would be scared of Dave's advice. Just hire a cleaner, handyman, and lawn care guy if needed. Put the charge for them into your costs. It's not that hard. You just need to be smart and a bit tech savvy. I semi automate almost everything. My cleaners have an app that let's them know when to come clean. I have an app that messages guests their keycode to the house and checks up on them to make sure all is well. I have cameras to make sure my things aren't being stolen. I even have an app does my pricing strategy. I just check my group chat with my crew to make sure things are done well and move on. It's not THAT hard, you just have to be smart.
A great way to set up an airbnb is for 1-3 month rentals. especially in cities that are growing. people move/come to town. They can get a place to stay with all the utilities and furnishings already done. then they can spend time looking for a more permanent place. or price your listing low enough that they decide to just stay
Universities send professors on sabbaticals. A typical sabbatical is from one to three months long. That would be a way to use an air bnb. My husband tried to talk me into staying in an air bnb and I turned it down flat. I am a hotel girl.
I rented an Airbnb in Augusta GA for 1 month to visit my son/DIL who were also hoping that I eventually move there . . It was a great way to get to know the town yet us both have our privacy (they both work Ft & school pt) . . And I am a great tenant. Airbnb was the only way I could bring my dogs (for a fee . . But a whole lot less than boarding them for a month!). I left it cleaner than when I arrived but that’s the way I am. My landlords were good to work with too . . .
As someone who has done airbnb for a little while, mid long term term rentals through airbnb is not a realistic business model. Only during the summer is it really possible to find people who want to rent longer than a month on average based off my experience doing this and being mostly booked over the past 18 months
I have 2 identical homes in Perdido Key. One is a long term rental and the other is an Airbnb. I make 50% more on the Airbnb after expenses, however it is more hassle. I might convert the second one to Airbnb once I retire.
A recent news story: Air BNB in Mexico. Family takes toddler on vacation there. Toddler dies of fentanyl exposure apparently from traces left by a past tenant. This is just too risky. People are doing so many unsafe things while 'partying' these days. And an Air BNB is all about partying.
I've got three Airbnbs. I'm retired at 31 thanks to the excellent income they provide. I literally do about an hour of work per week. Dave is the champion of the working poor.
Hello I'm young and interested in ways to make some money I was just wondering if you'd have any tips for me since it seems you've already done what I want to do
My buddy has another property he uses as an Air BnB and he’s constantly maintaining it. Had a broken pipe this week and flooded the place. Always cleaning. It doesn’t seem fun.
Neighbor where I used to live bought a house to run air BNB.... She thought it was going to be an easy income. Essentially she bought herself a job being a maid.
Me and my wife have two nightly rentals and one is doing fantastic and makes us good money, my wife manages that one and does her own cleaning. It’s a full time job. The other one we purchased and put in a management company in hopes it would be passive income and has Been very disappointing. Luckily we don’t have a payment on either and both our house are zoned for short term rentals and licensed. Basically if you want it to make money location is very important and you’ll have to make it a job, and expect getting messages at inconvenient times. Having said that my wife loves doing it.
In my opinion Dave should have just said the Airbnb was a bad idea all around. His comment to use the Thrift Savings (Fed Gov’t version of 401k)to pay for the Airbnb in cash is a terrible idea. The distribution would be taxable as ordinary income. In other words, to net $300k, they would likely need to withdraw ~ $450k gross just to cover taxes. This would significantly deplete this couple’s liquidity. Even though their $100k income is great, they’ll need the liquidity in the future for unexpected expenses, and to supplement income when one of the spouse’s Social Security payments goes away at death.
The cleaning alone … sometimes daily … and stripping & remaking multiple beds , washing allllll that bedding including bedspreads and / or comforter , multiple towels & bath mats , kitchen towels … buying tons of laundry soap & cleaning products, paper towels & tp & toiletries & garbage bags … coffee , dishes , bottled water ( gotta have extras if u want a good rating ) . Wiping down / dusting all flat surfaces, cleaning dishes, emptying garbage, vacuuming , sweeping & mopping .. investing in a primo vacuum cleaner, washer & dryer, curtains , beds , furniture. Communicating with guests. Booking the place, dealing with special requests. Cleaning common area, salting & shoveling snow. Getting calls at 1 a.m. from weary travelers who dont know how to let themselves in. Dealing with cleaning out the smell of pot smoke. Dealing with noise complaints … not worth it
I know of a property that was bought to be turned into an airbnb. It was in a primitive association, but only for road maintenance, waterfront access, and maybe utilities. Predictably, the airbnb’s tenants caused so much mayhem in the neighborhood and on the waterfront, the association banned any airbnbs. Now the owners can’t sell it without taking money to the table.
@@MrMds414 They bought it when properties were up-balled for AirBnB potential (AirBnBs were a rising phenomena, and zoning hadn’t yet caught up). So I think they planned on a high RoI when they bought the property. It’s a highly sought vacation area, but the year-rounders (aka long-term tenants) aren’t nearly as affluent. So any long-term rental they could realize would fall far short of their original expectations and ability to finance their debt.
Can some viewers please share some airbnb horror stories? I know of one in my area: Teenagers rented an airbnb house for weekend and threw a party with 200 people turning up. The police arrived and the place had been completely trashed.
To mortgage her home that is paid off at her old age?!! Naw brother that is not a smart investment or idea! They make 100k a year in the south! They are living large! Why get greedy and become a landlord at their old age?!! She needs to get a hobby or better yet do volunteer work at a hospital, nursing home to veteran’s facility! She is just plain GREEDY!
I suppose running an Air BnB from your property it's like running a hotel - the advantage is you don't have to buy a hotel because you already have it. The downside is that you have to run a hotel. And realistically, you will only be running ONE hotel room, not a full hotel of rooms
We are a company that manages Airbnbs for investors and it’s becoming too saturated. There are many moving parts to managing Airbnb’s and it’s demanding.
So instead of paying $1000 a month for taxes and upkeep, she would pay $1300-$1500: a small Loan to finance a small business that may generate some extra income. I don’t see the big deal with taking a small risk for the potential of reward. Time is a big factor when it comes to investing and some low rate leverage can be very useful. If everyone saved to invest or start a business, most people would never get started. Calculated risk has worked for a lot of people and a lot of big businesses. Worst case you default and start over.
@@alinatamashevich3354 what difference does a few hundred bucks make when you still have to spend thousands per year on the house to keep it. You won’t accomplish anything unless you take a risk
I have an airbnb for 3 months now. I have experience but im not an expert. Revenues for 3 months already are currently 83% of what i was told to expect from a good tenant over 12 months. I have a co host and a cleaner so i do have expenses but the property is in tip top shape. Im learning a new business and skill set. Its not easy, but nothing with a reward is.
