TylerCruz.com: An Internet Entrepreneur's JourneyThe journal of a web entrepreneur on his journey to wealth.

Pros and Cons of Running an Airbnb

In this post, I will outline the pros and cons of running a  listing. As a reminder, I’ve been using the service for just over a year, although just during the summer months. I also host a large “room” from within my house, so it is not a separate apartment or full house. I mention these things because they could affect the pros and cons as they are completely different types of listings.

With that being said, let’s get started.

Cons

Cleaning After Guests

Our guests have for the most part been quite clean. We have been lucky in that we haven’t had to deal with any really gross bathroom or bedding situations. At worst, the toilet might be moderately dirty and the tub have a fair bit of hair. So it’s not so much an issue of guests being really dirty as it is the constant repetitive task of cleaning itself. Calling on the services of cleaning professionals like Modern Maids would be a huge life-saver.

Each guest turnover means a new complete cleaning of the room to avoid problems such as infestations. So the guest may have arrived at 11pm and left at 6:30am the next morning, but that still means that you need to wipe things down, vacuum, make the bathroom spotless, put everything back in its place, and then do a ton of laundry (towels and ALL the bedding). If you want to make sure the house fives a nice aspects as soon guests arrive, we also recommend to hire local Driveway Cleaning services specially during winter and fall.

It’s almost fun the first few times, but then it quickly gets old. You could hire somebody to do this for you, but what happens if they don’t show up or are late? You could risk a horrible review and non-payment from a guest. And it will also take a huge chunk out of your profits, and is really only possible in listings that command a high price tag ($100+ a night).

Checking in Guests

While I enjoy meeting new guests, it can also quickly get old to have to go through the same routine for each new guest during the check-in process. I greet them, show them their room, then give them a tour of the rest of the house, explain the house rules, ask about their trip and answer any questions they have… it just gets a bit boring after a while.

In addition, I don’t like having to wait for guests to arrive. It means I cannot leave the house until they arrive, and often guests will be late or even early.

Sharing a Kitchen

Not all listings will share their main kitchen with guests, but many like ours will if there is not a kitchen within the room or suite. Unless you’ve had a kitchen remodeling done recently, you’ll be sharing a kitchen with others.

While guests don’t eat with us, it still means having to co-ordinate who will be cooking when, and it also means that one party will end up having to eat extra late (especially since the one party will not only cook, but cook, eat, then wash the dishes). This is not usually an issue for short-term stays, but for long-term stays it is, as guests are more likely to be cooking for themselves.

Setting Up Breakfast

Again, not all listings will offer breakfast, but we do. What we do is set up a huge breakfast spread the night before (so we don’t have to get up extra early) – this means making sure the kitchen is clean and then setting out the huge spread. It’s not that difficult to do, but it’s just one more thing that you need to do.

Angry Neighbours and City Bylaws

We haven’t had any issues with angry neighbours, apart from the next door neighbour politely asking me to have our guests refrain from parking in front of his house (which I’ve gladly obeyed). But other neighbours may not be so forgiving and could complain to the city or your strata if you have one.

Start-up Costs

If you plan on having 5-star ratings, you will need to make sure your listing is very clean and has everything a guest may need. This includes a quality bed, preferably new or newer, brand new sheets and bedding, proper towels, and then little things such as disposable shampoos and soaps, drinking glasses, etc. Don’t forget to check your plumbing now and then since some guest tend to clog the toilet and drains. When this happens, you can connect with plumbers such as this emergency plumbing in Carlsbad, CA.

This is only a one-time expense for the most part, but cannot be ignored.

Shakey Customer Support

I have not had to contact support yet, but I subscribe to the subreddit and have read a lot about their support leaving a lot to be desired – namely giving hosts the runaround when responding to queries. I have not experienced this first hand though. In fact, come to think of it I actually did have to contact their support once, and that was because I saw somebody had copied our address and house photo – likely to create a fraudulent listing, and they took down the listing and banned them about a week after I reported them.

Possible Bad Guests

I had had a guest that I did not particularly care for (he was rather rude), but other than that I have been lucky. If you screen your guests by making sure they only have positive reviews and avoid first-time guests, then it is pretty rare to get bad guests.

That being said – they are out there. I haven’t had any, but I’ve certainly heard my fair share of horror stories. Stories that include blood, semen, broken and stolen items, guests that try to bring in more guests than what was agreed, etc.

So the possibility is certainly out there if you’re not careful in your screening process.

Pros

Money

I only have 5 pros listed compared to 8 cons, but this is a huge pro and the primary reason why people become hosts – the money.

In my opinion, Airbnb is one of the easiest ways to bring in a significant amount of extra money that I can think of. Our 1 listing alone brings in $1,000 a month profit. So running a listing for even just a few months can yield you enough money to go on a vacation.

It is important to have air conditioner in your house, so the guest will prefer your property. Install one with the help of professionals like the ones from Heating & Cooling Services in Snohomish, WA who can provide heating installation in Collierville, TN and nearby areas. So, here is an option to beat the Florida summer heat and a chance to repair your ac coil condenser today. Most importantly, make sure to conduct regular hvac repairs and maintenance with the help of an expert like AirMax Heating & Air or Furnace replacement : Twin Falls.

Meet People from all over the World

If you’re a social person or enjoy other cultures, running a listing will have you meeting and talking to people from all over the world. We’ve had people from the United States, Canada, the UK, Germany, Ireland, France and other countries I can’t remember off the top of my head.

Simple to Get Set Up and Started

If you’ve decided to go ahead and start your very own listing, after creating your listing by adding photos, a description, and other details (you will want to take your time during this initial process), the approval process should only take a few days or perhaps a week, and then you’re all ready to go – you could have your first booking the very next day even. So if you’re reading this and decide this is perfect to you, it’s possible to have a few hundred bucks in your bank account by next week!

Very Good Website

Overall, I am quite happy with their website and app – there are numerous ways to communicate with guests, all of which are very quick and easy to use. They provide a lot of listing customization options such as being able to select various cancellation policies, add extra costs such as cleaning fees, and adjust your listing’s price based on the weekend or other factors.

I’ve had a fair number of older guests who have had no problem using the website and app, which says a lot.

Receive gifts

Occasionally, you will have guests who bring or leave you gifts! We’ve received postcards, snacks, a full Chinese meal, flowers, and the classic cookies  from holiday cookie delivery.

In addition, I’ve heard that the company occasionally sends out gifts to Superhosts, such as brand new mattresses – I have yet to receive anything yet though (It’s super easy to become a superhost though, which is probably why. Plus, I think they mostly send out gifts to hosts in major cities like New York).

Conclusion

Having a listing can earn you a fair bit of extra cash, but it still takes some effort to manage a listing unless you have a high booking rate for a listing rate $100+/night where you can then hire somebody to manage and clean your unit for you.

Broken Link Checker Plugin Review

My blog is 12 years old with over 1,100 posts. Naturally, I have many dead/broken links as a result.

I’m not sure if cleaning up those broken links has any SEO benefit (I’m assuming it must have at least some), but I know that I don’t want dead links on my blog as it will only make my older posts seem even older than they are, as well as lower its credibility.

Fortunately, I found an awesome free WordPress plugin that does everything I was looking for and then some. The plugin is called “Broken Link Checker” (how ambiguous, eh?), has over half a million installs, and is regularly maintained and updated.

Here’s a short screencast review of the plugin I recorded:

Here’s the screencast (you will probably want to watch in HD full screen to be able to view it properly):

(Note: You may need to visit the post directly at TylerCruz.com if you’re reading this via e-mail or RSS in order to see the video.)

Anyhow, I highly recommend this plugin if you want to find and clean up broken links on your WordPress site.

Pros and Cons of Running a Homestay

A few posts back, I shared how I am now a homestay host. I had so much to share in the post that I had to end up breaking it up into two separate blog posts.

In this post, I will outline the pros and cons of running a homestay in case any of you have even the slightest interest in running a homestay as well. Or, perhaps you know somebody that does (it’s really perfect for empty nesters!). Or maybe you’re just interested in learning more.

As a quick reminder, I’ve been running a homestay for 1.5 years now and have had both boys and girls of varying ages from China, Japan, Vietnam, Saudi Arabia, and Qatar.

Cons

The Money is Not Very Good

As mentioned in my original post, I am not making very much from being a homestay host. For the upper rooms, I am charging $800/month which works out to just under $27 a day. I am budgeting $12/day for food, which works out to a profit of just $15 a day. The downstairs room would yield a profit of only $18 a day. It doesn’t feel good to write and reflect on this – considering that you could make the same amount in 1 hour working at McDonalds!

So as you can see, the money is definitely about as low as you could imagine. This is not a get rich quick scheme. However, I actually list money as being one of the pros as well, so don’t give up all hope yet.

It Can be Hard to Get Homestay Students

I have spent a significant amount of time working on obtaining homestay students.

The university here has a homestay program, but won’t accept us due to our house not being very close. We are also part of a homestay agency, but don’t work with them anymore as those students are always short term at 3-4 weeks, which is not worth the effort. As a result, I have had to obtain homestay students independantly instead of just having them sent to me automatically (although there are benefits to this as well though such as being able to set my own rate and being able to choose who I accept).

By far, the best method I’ve used to obtain students is simply by putting up free ads on Craigslist, Kijiji, and another local classifieds site. However, I’m also a member on various online homestay services such as Homestay.com, although I haven’t had much luck with them so far. I even made up posters and put them up around town, such as at the university itself (in the ESL building), in Chinese restaurants, malls, etc.

More recently though, I created a website. It doesn’t rank too well for the keywords I need so I created some AdWords ads which have been doing well (thank god I have some past skills I can fall back on!).

Fortunately, we are now completely filled up with 4 students, and have 3 more on a waiting list! I even had to remove all of my ads everywhere! But this is the busy season – 2 months ago, we had gone 5 months without even a single inquiry for a student!

You Have to Give Up a Portion of Your House

This is a downside to running a homestay that may not be immediate obvious at first. Sure, you know that you’re giving up a room, but you’re also giving up other areas of your house, too. For example, you’re giving up a bathroom, part of the kitchen, the living room, etc. There will be more shoes in the shoe rack. There will be more coats in the closet. There will be less space at the dinner table.

The smaller your house, the more noticeable this will be.

Upfront Costs

This is not a huge con as it’s a one-time expense, but you will need to make your homestay room(s) ready for a student. This means making sure it is clean with decent furniture and everything a student will need such as a desk and chair, bed, lamp, dining room furniture, etc. And when looking for some antique furniture, you may check out a helpful place like antiques.co.uk/antiques/categories/antique-furniture/dressing-tables for more details!

These things add up, especially if you’re planning on having multiple students.

You Have to Cook and Clean

For me, this is by far the hardest part of being a homestay host. I’m not a great cook, and I have to make sure the student(s) get a proper lunch and dinner (breakfast is self serve, thank God!). I also can’t just make macaroni and cheese or instant noodles as I have to make it at least moderately nutritious and tasty.

It also means washing dishes for one more person (or in my case, 4 more people!).

I even prepare bagged lunches for the students for when they go to school. Although, to be honest, I don’t mind this too much as it’s a lot easier than preparing a hot lunch at home for them.

Students Can Break Things

Accidents happen of course, but it is something to consider. We had a 16-year-old student who did a fair bit of damage to his room which we didn’t discover until he left, as well as damage to various other things in the house. In general, though, this is not a huge deal and I’ve learned my lesson and now charge a damage deposit which I highly recommend doing! To get a lawyer go to https://phillipslawoffices.com/car-accidents/

It Can Be Belittling

Most of the time, if you’re doing a homestay, you could use the extra cash it bring in. And most of the time, the students will have a fair bit of money – namely if they are from China or the middle East. Everything they have will be better than yours. They will have the latest iPhone, expensive clothes, expensive laptops, etc.

The worst part for me was when I was a chauffeur for them. It just felt so demeaning, especially when one of our students would sit in the back seat. I would drive him to and from school, making only $1.50 per direction after gas fees. I’ve since increased that fee very slightly, but it’s still next to nothing. I hate the driving, but as mentioned before, I do have to compensate for our distance from the university and the fact that the transit system here sucks.

But hey, desperate times call for desperate measures.

Pros

Live Mortgage-Free

I mentioned the low profits of being a homestay host as being a con above, but at the same time it’s also a pro.

Yes, I only make about $15-$18 a day profit, but once you get into the groove of things, time flies by and having a homestay student is pretty easy. The most effort goes in when you first get a new student, as there is an adjustment period in learning about him/her and getting them adjusted to their new life. This is why we don’t accept short term students anymore – the longer you have a student, the easier they are to look after.

My point is that after a while, it barely feels like work at all once you’re accustomed to your student, which usually takes about a month to become really comfortable with each other. Then, the money is almost (but not quite), like passive income, and it adds up fast. This is not making money online, so it’s not “maybe” making $15 tomorrow – it’s a guaranteed $15 tomorrow. So that’s $450 a month for 1 student. Get 2 students and you’re living mortgage-free. Get 4 students and you’re living mortgage-free, utilities-free, Internet-free, Cellphone-free, etc.

I will have 4 students by the end of the month, so that’s $60 a day, or $1,800 a month.

Basically, it’s a great way to make extra cash on the side. If you had no mortgage, you could effectively retire immediately.

Enjoy the Culture Exchange

As a homestay host, you get to experience other cultures. In most cases, students will be “fresh off the boat”, and so a lot of things will be new to them (not everything though; you’d be surprised how westernized other countries are these days).

I actually really enjoy this aspect of things and enjoy showing and teaching students our culture as much as I do learning about theirs.

Two of our students and their friends (16-22, Korean, Chinese, Chinese, Japanese) trying Trick-or-Treating for the first time!

Relive your youth! My first time carving a pumpkin in 20 years!

Eat Delicious and Exotic Food

I love to eat, and my bulging stomach will attest to that.

I have eaten so much authentic exotic food over the past year and a half, it’s not even funny. As mentioned in my other post, I offer discounts if students want to cook dinner for everyone once or twice a week, and clean up afterwards. In fact, our Vietnamese student is cooking us dinner tonight.

Most Asian students know how to cook, and can cook very well. This is in stark contrast to the 20-something in the west, that can usually only make Kraft dinner or instant noodles.

All of the food I’ve eaten from the students so far has been restaurant quality (or above).

I also learned that I absolutely love pork belly, and am learning how to make it now.

Pork belly dishmade by our Vietnamese student and Chinese vegetables (I made!)

Most dishes prepared for us are very healthy.

Enjoying a Chinese “hot pot”. The chinese students sure love having hot pot with their friends… probably the equivalent of young people here having a pizza night.

Vietnamese spring rolls.

Squid, bun cha (if I remember correctly), and a vegetable dish.

Vietnamese BBQ (so good).

This was part of a soup; noodles were served, then broth, then we added the other ingredients.

Part of a dinner prepared by our 16-year-old Chinese student who could really cook!

A ramen lunch.

One of the best meals I’ve had in my life, made by our 16-year-old Chinese student.

More People to Socialize With

If you’re lonely, or just generally enjoy having people around, then being a homestay host is a great option. Dinners will have actual interesting and stimulating conversation, you might find yourself doing activities that you haven’t in years (such as taking the students out bowling or mini-golfing or perhaps indoor golfing with the use of gadgets such as a skytrak golf simulator), you might have a blast playing board games, etc.

Conclusion

Being a homestay host can be extremely rewarding if you are interested in other cultures and helping people. You will be compensated for your time and effort, but it is not a get rich quick scheme.

You could always try it for a month or two and see how you like it, or even find a local homestay agency and perhaps try it with very short term students (1-3 weeks) first.

I’m Making $86,000 a Year From TRUE Passive Income

First off, a warning that this title is somewhat of a clickbait, although not entirely. In fact, it’s mostly accurate. Keep reading.

In a recent blog post, I gave an update on everything that happened to my first income property during its first two years. I also shared my numbers in regards to rental income which in case is you are not being able to fully rent there are options like real estate text message marketing  which can help you with your income.

In this blog post, I will be focusing purely on numbers from my apartment investing income in regards to appreciation.

The plan for my income property, a house with an upper and lower unit, was always to act in the capacity of a holding property to gain value through appreciation. I balanced the cashflow so that it would just cover its own costs and taxes, as well as a bit more to keep as a contingency fund. Where I live, it does not make sense to own property from a cashflow standpoint; house prices are simply far too high. Where we do benefit, however, is through appreciation – that is, the value of a property rising over time. My strategy was therefore a longterm one – to hold onto the property (hence it being a “holding property”) until it appreciates enough to where it makes sense to sell, and then to rinse and repeat.

Now, I will be the first to admit that some of what follows is from pure luck; I bought at a good time right before the market completely blew up. Actually though, the market had already been starting to explode for about a year or two before purchasing, but it really went crazy afterwards and is still climbing. This is due to hordes of rich Chinese coming in and buying up real estate here left and right, causing a housing shortage and raising property values. The problem city near me, Vancouver, has since added a 15% foreign buyer tax, but this has only slowed down the Chinese by a small bit – they still have money to burn.

Hot Market

According to the July 2017 VIREB (Vancouver Island Real Estate Board) market statistics report: “Nanaimo’s benchmark price [of a single-family home] rose 19 per cent to $490,500“.

That means to purchase an average house here, you will need to fork out half a million dollars.

What shocks and excites me more though, is the fact that it rose a staggering 19% over the last year! Take a look at the table below to see how significant this is:

A-mei-zing!

1 year ago, the average house was worth $433,500. 12 months later, that value is now $490,500, a $57,000 increase in just one year. If the market continues at this pace (it shows no signs of slowing down), then the average house will be worth $625,000 in just 2 years from now.

The graph below shows the appreciation from just the past month, with my city sitting at 2.33%.

That means that the average house value rose $11,000 in just the past 30 days! I must be missing something or calculating something wrong though, as that doesn’t seem like it can be right… can it?

The thing is, this increase is not just from this year… it has been like this steady the past 2 years. I can’t remember the exact average appreciation from the previous year, but believe it was around 20% as well:

My Properties’ Appreciation

Okay, so the reason I wrote about my market’s numbers above is so that you can believe me what I tell you how much my properties have appreciated and that I wasn’t just throwing out some pie in the sky numbers. In fact, I have been in close contact with my realtor, constantly asking him the value of my house and income property, so the numbers I will present here are actually the estimates he think we can sell the properties for. If you want to venture into the world of property investing as well, then you must know that it pays dividends to work with a highly-esteemed professional, such as the best realtor in sarasota.

Income Property

I purchased my income property almost exactly 2 years ago for $274,000. It is now worth double that, according to Property Pricer.

It therefore appreciated $86,000 in 2 years, making me $43,000 a year (not counting taxes, realtor fees, closing costs, etc.) passively, or $117/day if you like.

I put $140,000 down, which leaves me with a whopping 61% ROI – certainly a hell of a lot better than the 1-3% I might get by keeping it in the bank or putting it in a GIC.

If the market stays the same and it appreciates another 20%, it will “make” another $72,000 in the next 12 months. It’s a crazy snowball effect. Again, I am not factoring in closing costs and taxes though.

Residential Property

My girlfriend and I purchased our residence around 4 years ago for $405,000. It would now sell for $580,000 if I want to sell my house fast (a similar house sold just down the street a month ago for this price). This is an increase of $175,000. Over 4 years, this works out to an average of $43,000 a year. Does that number sound familiar? It should, as that is what my income property has averaged above – this is purely a coincidence though, although a funny one since it’s literally the exact same number.

As a result, you could say that I have been passively making $86,000 a year via property appreciation. This is really more for the clickbait title though, as I didn’t factor in closing costs and taxes on either property, plus I only own half of the residential property so only half of that appreciated value would effectively be mine, or $65,000 a year.

$65,000 a Year Passive Income

So my properties, and I’m only counting half of the residential property since that is my legal owned part, that’s $65,000 a year from true passive income. Sure, you could argue that it’s not technically income until I sell the properties, and that the market could crash and the homes lose value. But I don’t live in the US – while the market here is headed towards what looks like the edge of a bubble, it will never completely tank like the US did in 2008 – the lending regulations here are far too strict (it’s very difficult to get a mortgage here and the rules are very firm). Honestly, I believe the worst that is likely to happen is that appreciation slows to a crawl.

$65,000 a year works out to $178 a day. That’s $178 a day I’m gaining in equity, and at a 20% appreciation rate this has a huge snowball effect. If things grow at another 20%, that is $130,000 I will gain in equity in one year from now (only my share, not including my girlfriend’s). Suddenly, that’s $356 a day. A year after that it would be $156,000 (just my half of residential) or $427 a day.

It’s impossible for the market to keep this rate up as nobody would be able to afford a house in a few years time, but even if rates were “only” 5%, you can see the tremendous value of property appreciation.

Wish I Could Buy More

As I have mentioned many times before, I only wish I had more money to throw into real estate. Not only are the returns fantastic, but I absolutely love real estate. I love calculating the numbers, I love watching the market, and I love looking at property to purchase. If you would like to invest, I highly suggest you get help from luxury real estate brokers in Marbella.

If I thought people would invest, I would actually consider offering shares in my holding company so that I could go purchase more Pinetree Hill property. The properties I’ve purchased have appreciated $261,000 so far though, so at least I have a good track record with real estate so far 🙂