4 Reasons I Prefer to OWN my Airbnb Properties!!

[@imrichardfertig]

Let me know your thoughts everyone. Do you currently own or rent (or a mixture of the two)? Like I said, I'm not 100% against renting but I prefer to own. Thanks!

[@brianholleran6340]

I want to get into this but do not have the money to buy. I agree long term buying is the best but I definately see the value in renting if you can find the owners who will sublet that way. And I guess thats a big IF since I have heard a few people say how well they are doing with that model but have not witnessed it first hand. but if you can build a cash flow business that way I would think it would be a great way to get in and eventually use that cash flow as a way to buy property and pay it off quickly and repeat the process and THEN from that point on focus on equity rather than cash flow. Agree or disagree?

[@imrichardfertig]

Agree!

[@TheCherrytree123]

It depend where you live. I own property in Melbourne and Rent in Sydney. for same property the renting price is 1:1.5. The buying price is 1:3. I live in Sydney and think use my rental home's spare room as airbnb to cover the rent. Is buying still better than rent?

[@davidb1286]

I prefer owning, but plan to try managing for a friend who's buying a property. Currently prefer owning for all of the reasons you mention, but also want to add that there is also value in having the autonomy and flexibility to do to the property what I want. Investment into the property will be captured by the owner, not the leaser.

[@marianwheeler3816]

I prefer owning because I could make changes/redecorate the way I wanted to without any skeptics from others. Also best thing is I don't have to worry paying multiple people such as the owner (arbitrage), HOA and other misc expenses that I know is temporary.

[@rdspeedfab]

You know how I know your a person of good character? Because you're giving this advice away. You are steady telling people how to become millionaires... not selling it like the fake KZbin celebs. Thank you for what you're doing. My wife and I watch you together and are buying our first short term rental next month.

[@imrichardfertig]

I just want to add as much value to you all as possible. Thanks for your support. Good luck on your first STR and keep me updated.

[@rdspeedfab]

STR University we absolutely will. Just watched the video about removing emotion. Loved it. Thanks again!

[@TrunxKraft3000]

Roadworthy Not giving away info for free doesn’t mean a person doesn’t have good character.

[@rdspeedfab]

Steven Joseph I don’t disagree. But giving info to better ones life just because... is a sign of good character. To me anyway. Have a good one!

[@kusinaniboyeng5076]

I agree 100%.

[@yvonnerodriguez5049]

I've owned my 2 family home for 40 years and just as I was about to pay off my mortgage in 5 yrs because of a major renovation that my then husband decided to do without letting me know while I was away, I found myself having to refinance. I live in a very nice area in Brooklyn and recently decided to rent out my spare room as Airbnb over the holidays and was amazed how much money I made in just one week. Now I'm considering the possibility of perhaps buying a vacation rental down South with some of the equity from my home. I just stumbled today on your video and I will keep channeling in. Thanks

[@runek50]

I currently own a manufactured home. I'm glad I found your chanel. Next step is renting the bedrooms through Airbnb. So exciting and thanks for sharing! Kim

[@jasonpatino]

If I wanted a job I would have stayed in the six-figure roll I had in Corporate America that provided manual short term gain. I do this to establish wealth. Ownership of property being used at its highest and best use, establishing itself with a history of high-income is real wealth in perpetuity.

[@funmiester]

As usual Richard NAILED IT! My fav example he PERFECTLY illustrated is the long-term RERURN-ON-INVESTMENT (ROI) you get from buying property with a mortgage with a 20% down payment. Our 20% is CONTROLLING the 100% portion (value) of the entire property!! The ROI on this really works well (on the long-term) and I have had this happen on several investment properties.

[@imrichardfertig]

💪

[@Noldy34]

I agree with what you say here completely! Thank you for sharing your knowledge! Keep up the great work!

[@CPTRedBeardFPV]

I think you can combine both, especially if you're just starting out and don't have a lot of extra cash to buy.. rent and use that cash flow to save up for a purchase, continue to use the cash flow to pay off said property faster...

[@tominator3]

Dang! You've got a great channel. Glad I found it! Subscribed.

[@imrichardfertig]

Thanks!

[@jayaustex]

Great info. Just scheduled my first and second guests in a property I own. Scary and exciting at the same time. Looking forward to more of your videos. Keep up the great content! Thank you. Jay

[@imrichardfertig]

Thank you Jay

[@mikestevens2053]

This is excellent advice, esp. for people just starting out who haven't yet experienced a major recession. I myself have always thought of rental arbitrage as being akin to day trading: very likely to vaporize with economic fluctuations (or government regulation), leaving you with nothing but broken leases and a trashed credit rating. When folks are able to wisely combine the leverage/tax advantages mentioned here with an LLC structure the results can be incredible. You just have to understand that building wealth is a process, not an event; it does take time.

[@imrichardfertig]

You're always so spot on with your comments Michael. Kudos and happy to have you as part of the community.

[@mikestevens2053]

STR University I really do owe you a debt of gratitude for all your great ideas and advice. We’ve incorporated quite a bit into our hosting practice and it’s been very cool to see it work! You’ve helped us speed up the learning curve tremendously!

[@jenniferthomas9502]

You exude a really positive energy. I wish you the best in your business.

[@Truthhunter]

Your forgetting about the interest the bank charges

[@palmbeachescapes7144]

Can you do a video how to market your home off the usual vacation rental platforms eg. airbnb, vrbo ect.

[@ZackScriven]

Well put together video Richard. There are people watching this video that have never owned real estate before who will achieve that goal through short term rentals. You are helping us make it happen. That is inspiring.

[@imrichardfertig]

You're the man Zack. Thanks for your kind words as always

[@noahtemple602]

Thank you so much for this content! I am 20 years old and I have recently been interested in owning myself an Airbnb business. This content has set me on the right path.

[@EstebanOquendoJr1955]

You make complete sense of what you are talking. Now I am learning to be a Real Estate Investor and I hope this explanation will help me move forward!

[@Blitzenkitten]

The best content ever! Well presented, right on point and so much value. Subscribed immediately, and I am looking forward to expanding my portfolio implementing your tips and strategies..thank you

[@manifestyoureverything3972]

What's a good way to find a rental property to start out with, and preferably a shorter lease like 6 months not 12 months?

[@alexanderchenf1]

How do you manage 6 properties in 6 different states? What if suddenly a cleaner could not show up the same day that a guest is checking in in a different state that you are living in? You fly there? Or you employed a manager as well?

[@imrichardfertig]

Check the video on my channel about managing properties remotely. Thanks Alex

[@jahremvaldes3071]

Great advice and analysis, but I just keep thinking that if you wanna be stable and bear less risks, buying is a goodsolutions, but if you wanna grow fast and generate a lot of income, renting (negotiating low rents) is far more profitable solution.In London you will need to work ten lives to buy 5 properties, instead you can rent them in a week! The question is what people really want to do: do they want to live an entepreneuria-likel life or become real entrepreneurs? If the latter is your choice renting is the answer.

[@imrichardfertig]

I think everyone is in a different situation in life and depending on where you are should influence whether you should buy or rent. If you don't have capital to buy and get started, then RENT, I have no problem with that (as mentioned in the video). There is no right answer for everyone nor do I claim to have one. This is just what I do with my investments and I've done well. I'm not trying to stand on a soapbox and tell everyone exactly what they should do. I want you all to learn and do what's best for you. But, remember there's many benefits to buying real estate instead of short term cash with renting (watch this: kzbin.info/www/bejne/rH3FpYuDgMqXb7c) Lastly, I strongly disagree on your take that "real" entrepreneurs would rent. The most successful entrepreneurs in the world have major real estate assets as investments and it's not by mistake. Long term > short term my friend. Thanks for watching.

[@SandraReaMcGinty]

I agree. I've done lease purchase options, which I like because I use OPM to get them. And I'm doing a lease to try that out. We'll see how it goes.

[@swatisquantum]

Owning is the best because you can add more units to your property or subdivide one space to multiple units. But renting is lowest risk and a great way to test the market.

[@shnoopio]

Thank you this was highly valuable! Currently, I manage 8 properties that I don't own but take a commission on generated revenue. It's a full-time job so I need to take a salary to pay my own rent etc. My goal is to own properties myself instead of managing other people's homes. However, I simply can't see how I'm supposed to generate enough money to be able to afford the 20% down payment on a place. The costs of running the business along with my own (small as it is) salary is just too large a chunk. Even with saving the tax percentage on earnings each year is so high that. I have to be missing something here right?

[@airbnbempireacademy6797]

Thanks for posting this Richard. Owning is definitely the way to go but some of the biggest operators in my market started in arbitrage. They used that cash flow and eventual lines of credit to massively grow to 150-250 units. If they had not started in arbitrage, in 10 years they might have gotten to ownership of 10-15 units. 5 years in, some of those who started in arbitrage now do a combination of both, but actually, own up to 40-60 units (25% of their portfolio). That's building empires. Also have to politely disagree that arbitrage businesses hold no real value and no one would really want to buy it. VC's are throwing a tonne of money around (even in my small market of Budapest), helping both management and arbitrage 'brands' to scale fast to multi-region businesses (and let's not forget sonder which is basically a big beast of an abitrage / master lease model). We do both management and arbitrage, but also now have the opportunity to get into ownership, so have to wholeheartedly agree with you on the upsides of ownership especially regarding buying in dips and increase in equity value over time. Fantastic value in this video though and thanks for putting this content out!

[@botsle]

Excellent video. Lessons I too have learned. Build the equity.

[@jefffeltes9309]

I'm looking forward to reading the comments on this video. To get started, I plan on arbitrage. When possible I plan to use that cash flow to invest in a property. But I gotta start somewhere!

[@imrichardfertig]

Love your plan Jeff. I believe I mention that as a good way of gaining initial capital in the video.

[@jefffeltes9309]

You do indeed. And I think it's a great plan for someone to get started as it doesn't require a lot of capital, but can help you grow some. I'm just aware there are some strong feelings that it's better to RENT than to OWN so I'm wondering if we're going to hear from anyone that feels that way. I bet we could have a GREAT round table discussion about the pros vs cons. Maybe for the big gathering in Q3?

[@Legosin]

I own 10 studios in Brazil, but I renting only one in short term rental. The others are in annual rental.

[@emi_gatica]

So far the best advice! Great video. Thanks

[@marianwheeler3816]

I own 2 properties, one condo (str) and a single family - yearly contract. My question is I have 2 condos both owners financing with 20% down. What's your thought about owners financing - good business strategy or not?

[@tylerleatherwood2220]

Best video I've watched on your channel.

[@networth00]

100% owning, that way you have full control of the property.

[@Alesandronos]

Pure gold! Ty

[@SandraReaMcGinty]

I'd love to hear your answer to a question I've had on my mind. I know a couple of people who have 20 STRs (Air BnB places), but I think that's too many because it is competing against oneself. These are ALL leases, too. What are your thoughts on having so many STRs? Thanks.

[@astrosntexans]

My thoughts if you care...20 isnt that many depending on size of town and demand. Think about how many hotel rooms there are. Plus if he has them all on leases and he decides that he is competing against himself too much he can just stop leasing some of them.

[@lyneljohnson7067]

I needed to hear this, thanks Richard!

[@imrichardfertig]

You're welcome Lynel!

[@davidyair67]

ok so since the markets dropped in 2007 that was the time to buy - not now since we are topped out and looking at a possible recession correct? i would arbitrage until the next drop - then buy. Do arbitrage and use cash flow now to reinvest and expand - then after you have the cash flow and the market drops again - and it will - you can then buy and hold and continue appreciating safely. if you buy now at the top and the markets drop/recession comes - and it will - you will lose alot.

[@Parkerv12]

Excellent Video!!

[@ericgarza3239]

Can I Airbnb a mobile home ? Is not owning that land worth it?

[@GeoffKnoop]

Very educational! Thank you!

[@ToddBizCoach]

Is building real wealth in the STR RE niche any different than the business owner or corporation that rents his office space, warehouse space, or retail business location? If my business model throws off tons of cash that I can use to furnish new vacation rentals why would I risk delay in execution of my business plan by waiting for capital infusions to buy more properties? If my business plan is to manage 20 STVR in two years, which method own vs rent will accumulate the most cash flow at end of two years? Is RE appreciation guaranteed? No Regardless of appreciation or not my property will give me cash flow.Example: $150,000 property rents for $1,500 per month LTR. 1. Buy property with 30%, 50k down. Furnish 3 bedroom ranch for 20k. Total invested: 70k in one property. Non recourse loan at 6%= $6k loan interest per year. Property tax is $3,700/ yr. STR cash flow = $2,000 per month X 12 = 24k/ yr. 2. Cash flow on same property if leased is $18k rent - 6k loan interest- 3.7k property tax = 8.3k higher expenses per year, $700 higher expense per month or cash flow of $1,300 per month X 12= $15,600/ yr X 3.5 properties( same 70k invested in furnishings) = $53.6k per year. Owning = $24,000 per year cash flow on $70,000 investment Renting = $53,600 per year cash flow on $70,000 investment Option 3: get loan for 15k of 20k in furnishings. Pay for 5k of 20k . Loan terms 20% X 4 yrs =$450/mo. Invest 5k in furnishings of each of 20 properties = 100 k invested, cash flow decreases for 4 years at - $450/month compared to Renting= $1,300 - $450 = 850 cash flow/mo. X 20 properties= $17,000 per month cash flow X 12 = $204,000/ yr. Option 3= $204,000/yr on $100,000 investment As good as or better ROI as hedge fund investing?😊

[@imrichardfertig]

All fair points and it’s personal preference. That said, your analysis is only for one year and misses things like: - rental uncertainty- you will face leases terminated and time and energy finding new leases. The owners may dislike your business model, your tenants, sell the property from under you. You are not in control of your destiny. Owning real estate? You’re in charge. - lease payments never cease. You are always paying rental fees. Owning real estate eventually you own outright and then your analysis will look very different as far as cash flow is concerned. So, how long is your investment horizon? 12 months? 12 years? Or like me - creating generational wealth to bequeath to my children and live off of during retirement? - real estate price appreciation not guaranteed. You are correct. However, history as a guide shows that, over timex it does appreciate and is a great investment. - inflation - your enemy in leases. Your cost of business increases as renewals occur. Owning real estate is a great inflation hedge as appreciation keeps pace or grows faster than inflation. We are in potential inflationary period for first time in nearly 40 years. - tax advantages: leasing: none. Owning: depreciation expense, 1031 tax deferred transfers, etc. Please keep us updated as you grow your business. I’m not critical of rental arbitrage. But I do consider it more of a job or business versus ownership which is a long term wealth creator and enhances quality of life (ie creates financial freedom).

[@alejandroviera4656]

I like many of your videos, but what you said you cannot generalize in all countries. In Latam we have 10-12% annual interest in mortgages. We do not have 301 benefits, but below $180,000 value you can exempt gain tax only 1 time every 3 years. You need to much more capital to balance equation on the business, so arbitrage is not bad to start and then you could have some opportunities to buy, but not necessarily with banks. Unfortunately not all is USA & Eurozone.

[@joestrandelldoteth]

The model Airbnb has with Niido where you lease an apartment for a year and can rent out 180 nights... do you think they will evolve into houses and single family homes in the coming years? If so, would it make more sense to do that? Thanks.

[@jaythibodeau6961]

Great point.

[@wiseinnerself]

Excellent advice. Thank you very much.

[@imrichardfertig]

You're welcome!

[@johnm7232]

Hi Richard, I love your video! Very informative. What price range do you suggest to purchase for Airbnb rental?

[@cristoff3]

Such a clear and concise video. Much appreciated. I'm currently toying with the idea of purchasing a small short-term rental place in Europe (I'm European), and this video excites me and inspires me to do more research. My main hesitancy is the changing laws/regulations of Airbnb. If I were to purchase something outright and then it become almost impossible to rent it out due to pushback at such sites, that could prove terribly problematic, no..? Any thoughts on this? thanks!

[@imrichardfertig]

I always search for areas that embrace short term rentals and rely on the tax income

[@PoplarHomes]

Who is here after Airbnb's new COVID policies?

[@KA-rt2vh]

Richard you are on fire! I would enroll to STRU only for your tax advices!

[@imrichardfertig]

haha well whenever you're ready let me know :)

[@BrandonTran]

I'm long term motivated. Help me get there! I subscribed. Cheers

[@redditRangler]

what do you think of investing in Puerto Rico Real estate for short term rentals??

[@fighterflight2492]

Crypto Logan interesting…

[@wtrix]

Thanks for the vid, very informative. I currently own, got lucky buying a home in Los Angeles in 2012 when prices were low. Now I have some equity which gives me options. Shall I pull some of it out and purchase another home? What do I need to know about purchasing in this scenario? Let me know what you guys think, thanks : )

[@mrlopez5009]

I found a livestream of airbnb online...every room, including bedroom. Hotels exist for a reason.

[@astrosntexans]

Like that's never happened in a hotel room before

[@ferniek5000]

Excellent analysis.

[@imrichardfertig]

It's basic but I hope it makes it super easy for people to understand the core benefits so they can continue to learn more.

[@JonathanDomingo]

This is so good!

[@imrichardfertig]

Thank you Jonathan 👏

[@ajmalshah934]

Hi, would you be willing to take an intern in San Francisco/Bay Area? I want to learn this business through practice with the goal of starting my own successful STR in San Francisco/Bay Area.

[@alwaystamcam8849]

Great video!!!

[@imrichardfertig]

Thank you Tamyra 🙌

[@Gierboo]

Mannn i love your videos! Thanks for all the knowledge! #MiamiKid

[@imrichardfertig]

Thank you for the support Joel. Means a lot

[@lydiachirkoff2653]

How do I find you on Facebook?

[@imrichardfertig]

facebook.com/groups/struniversity/

[@th.8868]

This video lacks true data analysis and comparison. Need to have a in depth analysis on how the comparison works. There is no show of property taxes that suck your revenue away as a owner, nor does this the implications of how much EVERYONE is likely to lose on a month to month basis on the interest alone from a home loan unless your rich and buy it outright. WE all know the banks in the states want their fair share in the earlier stages of the loan. Nor does this include the fees you'd have to pay as a owner for properties like condos, hoa fees, etc. It's a much simpler and rapid means for profiting off airbnb.

[@funmiester]

The answer to Richards ? - own 2 STRs & hopefully will own a 3rd one this year

[@80kaco]

This video has aged very well with covid-19.

[@blazayblazay8888]

Geez took long enough to answer my question

[@imrichardfertig]

😑

[@blazayblazay8888]

STR University 😢

[@henrikjohansson4426]

wework

[@fighterflight2492]

Henrik Johansson is that the friend he mentioned with the coworking business?

[@MaxsCognacReview]

I like your videos but Real Estate does not 'always' appreciate. The stock market is looking bubbly... if and when it crashes it will have a negative effect on capital markets and subsequently housing values. Let us bear in mind Las Vegas Real Estate lost 80% of its value during the last crash. Furthermore, in a standard 30-year mortgage, you will have paid 100% interest in the first 15 before you even pay a dollar towards the principal. I am not saying it can not be a good investment, but timing and interest need to be taken into consideration. As the saying goes on wall street, the more leverage used, the higher your chances that you're going lose. Final note, 90% of "day traders" lose money... bad advice ; )

[@imrichardfertig]

Trust me I understand. I'm saying in the long run it almost always appreciates from a general perspective. And yes I don't want anyone "day trading"