Starting An Airbnb Without Owning Property: Earn $1000/month | SEO: Airbnb without Owning Property

This article is a summary of the YouTube video ‘How to Make $1000 per Month on AIRBNB without Owning Property | Airbnb without Owning Property’ by Michael Elefante

Written by: Recapz Bot

Written by: Recapz Bot

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How does it work?
The video explains the concept of making money on Airbnb through rental arbitrage, highlighting advantages and potential cash flow of up to $10,000 per month.

Key Insights

  • The video discusses the concept of residual income and how thousands of people are making money through Airbnb rentals.
  • The narrator shares their personal experience of getting tired of their sales jobs and finding a better way to create monthly income with little time commitment.
  • The strategy of rental arbitrage or Airbnb arbitrage is introduced, where you can rent a property from someone else and then rent it out on short-term platforms like Airbnb.
  • The advantages of this strategy include no down payment or high credit needed, ROI can be between 100 to 300%, and the ability to scale quickly compared to traditional property ownership.
  • Setting up a rental can involve costs for furniture, setting up lease agreements, and city permits.
  • An example is given where a one-bedroom apartment is rented for $1,200 per month, and based on average occupancy and daily rates, it can generate $1,841 in monthly cash flow after subtracting expenses.
  • The video emphasizes the ability to scale the business and potentially reach $10,000 per month in cash flow within a short period of time.
  • The narrator provides additional resources and invites viewers to like, subscribe, and find more content related to real estate, Airbnb, financial freedom, and investing.

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Transcript

If you’ve never experienced residual income from your investments, this video will blow your mind. There are thousands of people making thousands of dollars per month in cashflow on Airbnb right now. I am one of them.

Nearly three years ago, my wife and I sat down and talked about how tired we were of working our sales jobs. Now, yes, the harder we worked and the more hours we put in, we could make more money. It can be very rewarding, but exhausting trading so much time for money.

In that moment, we understood what the rat race truly was, and we realized that there were better ways to create monthly income with very little time commitment. We studied short-term vacation rentals, which is what Airbnb properties are.

Fast forward to today, we are financially free, have a net worth over $2 million, and cashflow tens of thousands of dollars per month from our investments. And the first thought that may come to your mind is, hey, I don’t have enough money for a 20% down payment on a rental property. Well, the good news is that you don’t even need to own a property in order to do Airbnb.

That’s right. There is a strategy known as rental arbitrage or Airbnb arbitrage, in which you can rent a property from somebody else, garner permission from them, written in the lease agreement, to furnish and then re-rent out on a short-term basis on sites such as Airbnb or Vrbo or a direct booking site.

Why is this strategy so genius? No down payment required, no high credit needed. It’s not uncommon for the ROI, return on investment, to be between 100 and 300%. And you can scale to multiple units very quickly, much quicker than you would be able to by saving up for multiple down payments at 20% down.

Yes, you will need some money. You’ll need money for furniture and any costs associated with setting up the lease. Sometimes it’s just a security deposit or first month’s rent. It obviously can vary depending on the size and location of the property and who the landlord is.

Let’s walk through a quick example of what it would take to start cash flowing $1,000 per month using this exact method. Now, I want you to make sure that whatever specific location you want to invest in and the specific property type you end up wanting to set up for Airbnb, ensure that it works with the local government regulations as it pertains to short-term rental permits.

You can find an apartment for rent for let’s just say $1,200 per month. Now, assuming you have to pay an application fee, first month’s rent as a deposit, and spend about $4,000 to furnish the unit, we would spend a few hundred dollars on the city permit as well, professional photography, etc. So we’re all in at let’s say $6,500.

Now, if you go on AirDNA and you run the numbers and confirm that most one-bedroom apartments in that specific area are averaging about 80% occupancy throughout the year and a daily rate of $125, that equates to about $36,500 per year or $3,041 per month in revenue.

We have to subtract our monthly rent of $1,200 and now we are left over with $1,841. Now, we also have to account for utility bills, Wi-Fi, maintenance, and other operational expenses. The one thing I personally do not account for in the investment analysis is the cleaning fee. The reason I don’t forecast this as an operating expense is because we are going to charge each guest a cleaning fee with every single reservation. So I consider this a wash.

Now, let’s assume the operating expenses total an additional $800 or so per month on average, and this will leave us a cashflow of right around $1,000 per month or $12,000 per year.

The cool thing about this strategy is how quickly you can scale this business. At $1,000 a month in cashflow, you could get another unit stood up in about seven months. Then you’re cashflowing $2,000 a month. Then you get a third unit in about 3.5 months. So you could do the math yourself and see how quickly you could build up to $10,000 per month in cashflow, which would be $120,000 per year cashflow in your pocket. This is possibly the best investment strategy that any person could make to achieve financial freedom in a very short period of time.

If you want to check out all of the resources that I provide, make sure to see the description below. I’ll drop some information there. And hopefully, you guys found some value in this video. If you did, please do me a favor, hit the like button, and then make sure to subscribe for all things real estate, Airbnb, financial freedom, and other investing content as well moving forward. Thanks for watching. I’ll see you guys soon.

This article is a summary of the YouTube video ‘How to Make $1000 per Month on AIRBNB without Owning Property | Airbnb without Owning Property’ by Michael Elefante