Jorge Contreras is the founder of The Real System, a mentoring program that teaches you how to make hands-free income through Airbnb but without owning any properties. Why Airbnb? Jorge believes it’s the most effective way to create financial freedom. As opposed to shiny things like Amazon FBA and forex, which require lots of capital and experience. Airbnb is an easy way to dip your toes into entrepreneurship, to get your first win as a real estate investor. Scroll down for more on Jorge’s Airbnb strategy.
How do you get in contact with landlords so you can launch an Airbnb business using their property? Jorge likes to use Zillow. There you can search for properties that are being advertised, hoping to find a long-term tenant. Look for something in a cool, touristy spot. Something that is fully or at least partially furnished. Reach out to that landlord and offer them one of two things.
One, you tell them you run a short-term and vacation rental business. You ask if they’re interested in earning more income without having to lift a finger. Aka co-hosting. You operate the Airbnb for them. You don’t have to pay rent or put down a deposit. No need to buy furniture or appliances. You’re providing a service and chopping future profits. Don’t try to close them on the phone. Get them to say yes to an in-person meeting where you can seal the deal.
Or, two, the other thing you can do is sublease. Rent the property from the landlord. Say it’s fifteen hundred a month. Then go list it on Airbnb. Maybe you make three grand a month doing that. And you pocket the fifteen hundred dollar difference. Essentially you become the Airbnb bank here. You leverage other people’s assets to create an additional spread you can profit off of. All while mitigating your own risk.
Either monetization method can work well, assuming you find the right property. You want one with plenty of free parking. Make sure there’s no ongoing maintenance you would be responsible for. That would defeat the purpose, as it would become a very active income stream. The property must be in good-to-great condition. If it smells bad, if there’s visible structural damage, if the dishwasher is broke, people are going to complain, leave bad reviews, want their money back.
What else? The air conditioning and heat better work well. Especially if it’s in a location where there are big temperature swings in the winters and summers. Jorge prefers single family residences. The renter gets a better bang for their buck. They get a front yard, a back yard, a driveway, something that’s fully functional and homey for their stay. Condos, townhouses, and apartments are too crammed. You get neighbors complaining. It’s no good. Stick with single family to protect your ROI.
Other tips? Get any agreement with your landlord in writing. Protect yourself. Also, don’t offer them any extra money above and beyond a fair market rate for rent. It’s not your fault for thinking outside the box. If they want more cash flow from the property, they could always go and figure out the Airbnb game on their own. Last, before you go through with any deal, double check with the city that they allow Airbnbs in that area. You don’t want to find out, thirty days in, they’re shutting you down and hitting you with a bunch of fees.