My Airbnb Lost Money... Here's The Truth About Being an Airbnb Host 

That new HVAC system should lower your power bill to the point that you will kick yourself for not installing a new system at the start. In fact, you likely lost return business because your customers were not as comfortable as they should have been. Would love to know what percentage of power savings you experienced after one year. Just make sure the system is well maintained by a competent company so future problems are caught in advance when possible. Keep it clean and you will be happy with the performance. Congratulations on the venture; no better way to learn than jumping right in.

You said that your home gained value and therefore taxes were higher than expected. That’s literally not how California works. Property tax is always 1% of purchase price, meaning tax is fixed. Why are you making things up on your video? You sound like you have no clue what you’re talking about 🇺🇸

Passive income = being a leech

@@alunmorgans Nope. I make my tenants homes better than they were and work with them however they need, within reason. 🇺🇸

@@alunmorgans Have you lost your mind? How did you come to that conclusion?

The cleaning fee is wild in some places. I've seen the place be super cheap like $50/night but then the cleaning fee is like $120/day and I'm like..... wait a minute, cowboy

The pademic might have something to do with it especially if people want a super clean and sanitized place. Labor costs have gone up, cleaning supplies prices have gone up, and maybe with the drop in bookings owners need to recoup some of the cost by increasing prices if they want to stay in business. Hotels have the advantage of economy of scale, a full time staff, and cheaper overhead cost. It cheaper to house 100 guests compared to homes that house a handful of guest every few days. Pricing on everything is all screwed up. I think once things normalize, hosts will realize they can't charge that much or that hosting Airbnb isn't that easy as they thought it was. Look at big companys like Zillow who exited buying homes and reselling them. They lost a lot of money when they realized they can't sell houses for prices that the market wasn't willing to pay.

My buddies stayed at one in Vegas with a pool. If they wanted to use the hot tub the owner said there was a $50 charge per day.

@@Callmebigwilly That's insane! Gee, I wonder why the greedy owner isn't making as much money?? "Honey, why won't anybody use our hot tub?" "Did you forget to fill it with sparking water from France and include the caviar?"

I think air Bnb's (can be) "worth" more though because at the end of the day you're getting a different experience. With a hotel you get a single room and a bed and bathroom. There isn't alot of room to "roam around" or relax in other areas. With an air bib you get an entire space with a kitchen and the ability to cook food and the privacy that comes along with it.

Everywhere I travel to - even small places that have one or two hotels, airbnb prices are INSANE. I've found hotels with breakfast and a pool at a cheaper rate than airbnb backyard room at someone's beat up house. It's insane

This 100%!!!

I feel like if it’s just a couple staying somewhere 100% staying in a hotel is cheaper but I also feel you don’t have the luxury of what a home has eg. Proper kitchen, extra living areas, etc. I think Airbnb is a great option and worth the price for families or a group of people due to the extra space, privacy and multiple bedrooms

Companies are buying houses lile crazy too... to rent it back to us. We will own nothing and be happy

AirBNB takes zero risk. You're stupid to be a part of it.

There is no greater freedom than handing back the key to a airbnb apartment knowing someone else has to maintain it. If you enjoy renovating and decorating then perhaps home ownership is for you. For me, property is another way we get tied down

@@hunter-bourke21 I suggest you offset your real estate and get into stocks, A recession as bad it can be, provides good buying opportunities in the markets if you’re careful and it can also create volatility giving great short time buy and sell opportunities too. This is not financial advise but get buying, cash isn’t king at all in this time!

@@Believer292 You are right! I’ve diversified my 450K portfolio across various market with the aid of an investment coach, I have been able to generate a little bit above $830k in net profit across high dividend yield stocks, ETF and bonds.

@@edward.abraham Glad to have stumbled on this conversation. Please can you leave the info of your investment advisor here? I’m in dire need for one.

@@james.atkins88"Julia Ann Finnicum, is my adviser and she is highly qualified and experienced in the financial market. She has extensive knowledge of portfolio diversity and is considered an expert in the field. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.

She or her management are doing a poor job at revenue management to react to monthly price and competitor movement and it’s costing them a lot of money. Mismanaged property.

I was about to say the same thing. Price should have definitely been adjusted after 2 months of loss.

This is poor financial management.

This

Her costs were simply too high to lower prices all that much. They got excited at the prospect of huge profit margins but hired out all the work. A property manager for their only single occupant/group property? Pest management for a single property? You can get those things when you scale up and get a bulk discount per property. There's no such thing as free money and easy money doesn't last long and quickly gets divided up as people start to crowd around fresh prospects. I turn a good profit on my airbnb because I do 100% of the work (managing the listing, cleaning, repairs, updates, etc) also I don't have any mortgages at the moment. It's definitely not passive but it fits me where I am now. Definitely plan on scaling up and doing long term rentals once I get enough properties. If she wants a passive income, long term is the only LONG term way (rental wise) or scaling up big time (which even that isn't working out as cities start to clamp down on short term rentals). Simply put, she didn't do enough market research and didnt fully run the numbers. For example, the electric bill history of a property is frequently available for the past year even if you weren't the owner back then.

sure thing! I still think it can be worth it, but it would be VERY tough to make the numbers work with how interest rates are right now, and the possibility that many people could be cutting back on travel for the next couple years... it can still be a great business in the long term but I think it is important to have a savings in case there's a low season

@@ShelbyChurch ❤️❤️❤️❤️❤️❤️❤️

Shelby has managers taking care of the bookings - and other people are handling the clean-ups, repairs, etc. You also need to pay them. This house is in a good location - since many of her future travellers will be from California. As she stated, they might not be travelling across the country due to very high plane fares. People still like to "get away" from their every-day lives. It is now risky to purchase a property and expect to make money - with the high property taxes/maintenance, the price of the home - and the times that the home will be vacant.

100% agree! Such useful perspective. We also started hosting not long ago and feel the market has slowly shifted.

Airbnb makes a ton of money. You need to know what you’re doing

This is true. My husband and I are heading for a week in Monterey, and first looked at Airbnb thinking it'd be cheaper than hotels. It isn't. We were able to get a "Boutique" hotel (downtown) stay for $71 a night, as opposed to $150 for the cheapest Airbnb in the same area. Even including eating out it was by far cheaper just to stay at the hotel a two min walk from the area we were there for. We had thought of buying property here in the SF Bay Area for Airbnb rental, but the market here is already swamped with them.

I think air bib is moreso a luxury where people will go for vacations not because they need to just stay somewhere IMO

@Liz bth what it’s supposed to be and what it has truly become are two totally different things

Hopefully your property manager in evaluating the market for rates and increasing during events or high travel to the area. They should also be lowering to match other rates during the off season. It’s better to be getting SOME money than none at all and in hospitality as soon as someone doesn’t book that night, you can never make that money back. Just some tips!

Agreed!! Even by 50-100 that would put her in a whole new search bracket.

So not fair but business wise it does make sense. 😢

Don't forget Pal Springs only permits a fixed number or rental contracts per year, lowering the prices considerably off season could not only be unprofitable because of higher summer utility bills but also reduces the quota for more profitable times of year.

Probably using a bad property manager who is expensive lol

property managers are on year contracts and the pool has to be maintained monthly - those costs would not be cut.

Terrible advice.

Never close. Lower prices in slow season. Some income is better than none. Make sure you are financially prudent and have savings from the peak season to help during slow season. It just seems like a stupid idea to start a business in California, there is a reason business is fleeing that state.

Best advice so far!!!❤

@@fajrdn I think he was probably thinking along the lines of nursing/engineering contractors and not construction.

I had to travel for work to San Diego and short term rentals saved my company when I needed to stay somewhere during Comic Con!

I was about to state this exactly, I work at an Apartment service for about 8 years and you have to compete with the market around the area the property is.

Personally I'd just use her fanbase - offer to hangout, if they book her AirbnB. She is pretty massive on social media - properly advertised, the place should be full at all times - with fans or RU-vidrs who want to shoot something with her. Win-Win :D

You could say the same about a long term renter. Why not buy a house with a $2000/month note and rent it for $1800? Why not... because you'd be an idiot.

Unless your property price is underwater, for example, you are paying a mortgage for a $1m house that can now only be sold for $400k.

Thats not really true. Take depreciation into account. Within 30 years you paid again for that house with your reinvests you must do. If you dont make it with your cash flow than its a bad invest. Also consider the total amount of invested capital.

I have a few rentals and after you pay loan, taxes, insurance, rental fees, basic upkeep, lawncare, turnover costs ( loss rent, painting, flooring, damages) you don't make anything. Many turn into money pits. This is why more are wanting to do airbnb. If its not a large rental property many times it's not cashflowing well unless you rent it way high. Small properties such as a house or duplex have way to much maintance and repairs to keep up on.

a hotel is cheaper, but can only sleep 2 people. Are 3 hotel rooms cheaper than 1 Airbnb, though? That's usually why I book an airbnb- I'm staying with a group. Otherwise I agree and prefer a hotel room if it's just me or one other person.

You also don't usually get a kitchen if you book a hotel

I think the trick is to keep the fees low enough and the "Airbnb experience" with enough amenities that it becomes worth the added cost

Cleaning fee’s and rules making me go back to hotels 😮

Absolutely!!

Yea it seemed like a bad idea from the beginning. I also feel like by only having a whole house for rent you are missing out on a lot of the market. I think there are a lot of single travelers that need a lot less space.

Yes, this is why people lost money. You can’t just do something like this on a wing and a prayer, you have to have a plan and if it doesn’t add up, you don’t do it. No emotions, all business.

Shelby seems really personable, but clearly a bit of an airhead and not a businessperson. Absolutely insane video with multiple internal contradictions. in the 3:30-4:30 window, she complains she only rented out 2 bookings in June, the "nightly rate wasn't that high, it was $4 or 500 dollars" it wasn't that bad, it was kind of what I was expecting " are you kidding? one booking in July, renting $500 for night, for only $1500 . then at 3:50 she says we could lower our nightly rate but it would get eaten up by the AC? again, are you kidding?!? at 6:00 she says her "building manager" had left the AC on all month June and July and the electricity was $850 per month. Then in August and September it was turned off when the home wasn't being rented out. (duh), which resulted in a $300 drop in electric. So one additional night rented out at $300 would have covered the entire month's entire marginal additional electric. Not what Shelby made it out to be (it would be $2,500 if we had the place rented out every day!) The "property manager' is incompetent, and something Shelby should have done on her own. if you have to hire "pest control" instead of getting some ant traps from Home Depot, you really shouldnt' be in the business of If you are NOT a DIYer, and can't fix anything or maintain anything yourself, running an airBNB with a POOL and pricing yourself out of the market is insane, and will guarantee to lose money. what rate are you paying on your mortgage? when is your mortgage due for renewal? Good luck getting the same rate. Anyone who has no business sense and buys a home with a pool, trying to rent it out for $400-500 per night to large groups of people is an idiot, sorry. Was any consideration given to breaking the house into two sections, or renting out individual rooms rather than renting out the entire house all as one unit? I mean, what is the market for renting an entire $400-500 house with a pool? Surely there are 3-4 bedrooms in the home, and 2-3 bathrooms, and each bedroom could have been rented for $125-200 depending if they had their own bathroom or not. This is atrocious property management, and the property manager is incompetent (or just plain lazy). Pretty, but pretty stupid.

Yes, they are exactly the problem. Find a nice thing, pump it for money and ruin it for everyone. She is the problem.

ABB used to be a good deal. It feels like prices have skyrocketed lately. I suspect it's because early on it was just people trying to recoup costs for vacation homes and such, now it's an entire industry. There's a lot more competition and everyone is trying to not only turn a profit but also pay off the property from the rentals. Like even Shelby here thinks the property is kinda failing. If she lost $3300 every year, in 30 years when she pays off the mortgage she'll have paid $100k for what's likely a $1mil property. Which is ridiculously good.

I used air BNB 2 times and then I saw a thing on the news a creepy guy was putting a camera in the toilet and never again. I just realized it's actually dangerous no way. At hotels there's lots of people and security and background checks I'm not just going to some strangers house.

@@WooweeYT over 30 years she would have paid well over 300k mortgage interest, 360k in property taxes (low end), plus maintenance, pluse the money the capital costs of putting money into the property, down payment, making up for losses, home insurance, etc. There will be some tax write-off along the way but when you sell you will pay gains and tax recapture taxes.. its a lot. Think of real estate as a piggy bank and not an investment - they will be lucky to breakeven if they are honest about the costs

@@sterlingmarshel6299 Ya but she was already calculating all that and she only spent $2500 for the year out of her pocket. And that was with a $15k repair (that wasn't out of her pocket). She's not paying the mortgage and property taxes, the renters are. If she only gets a few more rentals next year (and/or doesn't have a huge repair), not only will the renters have paid the mortgage, taxes, maintenance, etc, but she'd actually be making a profit on top of that.

Yeah especially in Palm Springs with all their resorts and local casinos that also have hotels etc. Coachella/Stagecoach would really be the only time of year where renting an AirBnB makes sense.

Hey Mike 👋 I’m thinking about making a video on this. Let me know if that’d be helpful. P.S. If you have any questions about starting & growing your Airbnb business lmk.

Yep, I live in the most popular beach town in Australia and the rental crisis is so bad there was a protest in town last week. The cost of long term rentals plays it's part but Airbnb means there is less competition in the long term rental market as well. Businesses can't find employees because the young people they hire can't find homes/afford to rent, we still have families who are homeless after the floods last year but can't leave the area because their businesses/extended families are here, and to top it off, a property manager friend of mine said this summer in our peak season 60% of the short term rentals are sitting empty, because everyone with money is going to Europe now they can travel again. It's a joke.

Yeah it's a huge issue where I live in the UK. Airbnbs have taken over properties in normal residental areas as well as the tourist areas and there's just nowhere for locals to live. You look at housing for long term rent in any town in the south west and there'll be about 2 to 3 properties available and so many have closed viewings because there's so many people looking for properties. It's having such a huge effect on local communities and places can't find employees let alone seasonal workers because there's nowhere for them to live.

⁠​⁠@@jeanettemullinsI’m really thankful that my city places heavy restrictions on airbnbs (e.g., you’re only allowed to run an airbnb out of a home you actually live in, and you have to have a license to rent out rooms which they only give to about 200 people at a time).

Real estate is going down not up. It’s going to take a decade to turn around. Think: housing bubble 2.0 ☹️.

@@lossangeles if you could accurately predict the future you’d be making millions lecturing around the world, not writing RU-vid comments.

@@lossangeles okay, but Shelby didn’t buy at the height of the market and she isn’t planning on selling anytime soon. So, I stand by my statement.

@@mybrassmonkey I wasn’t trying to predict the future, just stating that “typically” houses tend to appreciate. Historical data does back this up. Shelby didn’t buy at the peek of the market and she isn’t in any hurry to sell, so it’s reasonable to expect that her house is appreciating in value.

Housing prices are going to drop by 50%, returning to pre-covid levels at a minimum. It's going to take about 20 years for RE prices to return to covid-level highs

Thanks for watching and showing love.!❤️ by leaving a comment let's talk in👆private✍️ Text📝 via telegram you're selected among my Christmas ongoing giveaway 🎁🎉!

Hey Amir 👋 I’m thinking about making a video on this. Let me know if that’d be helpful. P.S. If you have any questions about starting & growing your Airbnb business lmk.

How is it hard on electronics? The moisture?

Yeah this is asking for mold too.. yikes

I think Shelby should shut down the Palm Springs property in the slow-moving months of the year. Not worth to keep it open because the few bookings made are outstripped by the expense of keeping it open. It makes more sense to open it in in the months when full occupancy is a certainty and that’s a sound business decision. Anyway else, I guess you could keep an Airbnb running all year around in other regions but Palm Springs is such a hot place maybe its not where most people want to spend their summer.

Yes, really tough on wood. I had wood floors and subfloors buckle due to humidity build up after turning off the AC. Maybe in the desert you can get away with with it. Maybe a dehumidifier would solve this issue at a significantly lower cost than AC.

Shelby, how do I find your property listing? I’ve mentioned before that I am there in PS every 5-6 weeks (from nearby Huntington Beach) and I had family there just 2 weeks ago and booked a property for 6 days through Vacation PS (about $3000) and I normally spend about $2k for 4-5 days for my stays. I’ve never don Air B&B. Hope to book your property sometime.

It's time to sell before other list theirs also.

I have a lakefront home that I'm not at often. I'm getting ready to airbnb it also. 1:45 min. From Chicago

a lot less risk and hassle. Airbnb works only if you are earning 'super' profits above rental.

One of the challenges that happened during 2020 and on was the Moratorium in NYS. Really turned off the prospective Landlord. I do not know about other states, but Airbnb seems like a better option.

🔥 I’m with you on this Danielle! This was a great video! P.S. If you have any questions about starting & growing your Airbnb business lmk.

I'd look at AirBnB and rentals more as a long-term investment. Even if you break 'even' it's a win, you have an asset (land/house), a tax deduction (losses). Every bit of profit after that is a +1 overall. This is assuming it's an alternate income stream. Also solar is WAY more pricey than the estimates / websites want to make it out to be if you want a backup/battery reserve. Still a great choice, but not a 'no brainer.'

@@CaseyFerguson I used to think like that when I was a teenager. Nobody wants to go through all this trouble and invest lots of money to break even.

🔥 I’m with you on this @Malc4dead! This was a great video! P.S. If you have any questions about starting & growing your Airbnb business lmk.

Fears of recession? We're already in a recession - soon to be worse than '08.

Yep!!

People like going to big cities or the beach now since everything costs alot

There are more platforms other than Airbnb. Also Airbnb made more this year than previous year so they're fine. The STR platform isn't going anywhere.

🔥 I’m with you on this @patches! This was a great video! P.S. If you have any questions about starting & growing your Airbnb business lmk.

Yes and give a brief explanation of how the technology works too!

🔥 I’m with you on this Vicente! This was a great video! P.S. If you have any questions about starting & growing your Airbnb business lmk.

🔥 I’m with you on this Ben! This was a great video! P.S. If you have any questions about starting & growing your Airbnb business lmk.

This is such an excellent point.

RU-vid == big money