Airbnb Arbitrage or Airbnb Re-rental Strategy 2019

Double Your Gross Rents with Airbnb by joining our PRIVATE Facebook Group - / airbnbmastery
Airbnb rentals are an amazing opportunity for existing (and new) investors to maximize their real estate returns. As well in many regions, airbnb has less scrutiny and regulation than a traditional rental property.
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FIREpreneur: A person who has reached (lean) FIRE and uses this freedom as a springboard to operate a business or organization, taking on no significant risk (due to lean FIRE).
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Matt McKeever is a CPA, CA and Real Estate Entrepreneur in London, Ontario. On this KZbin Channel Matt discusses a variety or real estate and personal finance strategies and tactics. Including: How to BRRRR Real Estate, The Importance of Investing for Cash Flow, How to Reach Financial Independence Retire Early, Safe Withdrawal Rates, Frugality and Reducing Personal Consumption & Embracing Minimalism.
Matt began investing in real estate at age 25 by purchasing a student rental near Fanshawe College.

[@CanadianRealEstateChannel]

Want to know the 3 best places to find Landlords to pitch Airbnb Re-Rentals (Airbnb Arbitrage)? Click here to get the FREE guide: bit.ly/Re-Rental

[@Guyontheinternet1]

Airbnb right now might be rough, I'm glad to hear they've allowed them to operate now as of June 5th!

[@Guyontheinternet1]

@@antpalm8 Love the transparency with giving helpful information on running Airbnb profitably! I have yet to try the strategy but will likely hold off for now until the pandemic is over.

[@AirbnbAutomated]

Welcome to the movement Matt

[@CanadianRealEstateChannel]

Thanks!

[@Guyontheinternet1]

Would love to see a video on people who are managing to operate AirBnb in this environment given the pandemic! Not being negative but I'm genuinely curious to see if the AirBnB market is picking up now post lock down.

[@CanadianRealEstateChannel]

Double Your Gross Rents with Airbnb by joining our PRIVATE Facebook Group - facebook.com/groups/airbn... Airbnb rentals are an amazing opportunity for existing (and new) investors to maximize their real estate returns. As well in many regions, airbnb has less scrutiny and regulation than a traditional rental property. Are you currently hosting Airbnb rentals? IF so what city? IF not, why not?

[@CanadianRealEstateChannel]

Reminder guys - like everything on my channel - I’m not saying you have to do it (Airbnb in this case) - I’m just sharing our experience, lessons and perspective

[@Trenttabor]

This is a good over spend strategy. Ive made alot of money with airbnb rentals and this is not how you do it. You get second hand furnishings that are nice and quirky. Airbnb travelers like a homey feeling place, they are experiencing another persons living space. This is too clean, no character and overspending.

[@d.fenestrator9529]

That house has the allure of a sterile operating room.

[@Guyontheinternet1]

I would love a space like this personally if I was the customer or the one managing this AirBnb! Various preferences for AirBnb!

[@JeffWybo]

Good video!!! Thanks for having me on as well!

[@CanadianRealEstateChannel]

Thanks Jeff!

[@Guyontheinternet1]

Great video, would love to see what pivots have been needed in these unprecedented times.

[@ShaneHummus]

Airbnb is a great stream of income if you manage your place well to attract more customers.

[@CanadianRealEstateChannel]

100% agree

[@Guyontheinternet1]

It looks super promising! And with these systems in place, it's an idea I'm getting more interested in, post pandemic though.

[@Guyontheinternet1]

@@CanadianRealEstateChannel I love the flexibility of this strategy, you can always convert to long-term furnished rental!

[@rdk2086]

this is a fantastic video. one of the best so far and I've watched every single one on the channel. The quick highlights of the furniture, the in-between interview questions, the full walkthrough, direct to the point information without fluff but still kept the attention. love it. more, please.

[@theandrewhines]

Great video, Matt. Very informative and Adam killed the walkthrough. I'm a big fan of the level of organization and scalability of the model but it would be awesome if you could take advantage of used furniture etc. Would love to see a follow up on this house to see how it works out!

[@CanadianRealEstateChannel]

Yeah I usually do used furniture - have furnished 3 bed 1 bath house for under 5k. We’ve just been experimenting with various approaches

[@Guyontheinternet1]

Agreed, super interesting model, would love to see if pivoting has been necessary in this landscape.

[@sunrisegroup4912]

External source management = constant worry, even when due diligence is done IMHO, every stay your super host is at risk, one little mistake can ruin your record, many factors involved though not many ways around this unless you keep it in-house, also most landlords/home owners are very reluctant, you bring a great professional image but for most others who approach owners they maybe not as clean and concise as you or without a track record it's damn near impossible, also winter season is big drop in guests yet you still have to pay rent, yes can be offset from summer highs but other than that excellent video and good model for an additional stream of income and to sell to subs as a course. good value!

[@andyl965]

Airbnb seems pretty legit. Only thing that concerns me is the occupancy rate. Based on a couple sites I saw it seems like the majority of occupancy lies between 40-60%, so an average of 50% occupancy. The example in the video claims about 6000 per month in revenue, or 200 per day. But for a 750k high end house and at a 60%ish occupancy rate, it would be closer to 300 per day. Factor in the cleaning fees and taxes and guests would be paying closer to 400 a day, right? The funny thing is, the last time I asked a hotel in Vancouver for a quote for a 2BR for 1 night, it was like 570. So airbnb that includes an ENTIRE HOUSE for less, is a no brainer! Nice job

[@MikeRosehart]

So they have 1 year to wait (these builders), so 1 year lease? $15,000 in setup costs, maybe more if you hire all the furniture delivery & setup & staging out? Imagine a percentage of damages etc. What was revenue your first month? If it’s 15k staging costs all in time value, you could imagine the 1700 potential profit is mostly wiped out on that alone amortized over a year or two (depending on the damage route). My experience with furnished rentals has been higher depreciation & damages. Hard to make worthwhile money at re-rentals on Airbnb if you factor in all the costs, margins seem slim for the trouble of it. I’d expect 7000-8000/month and a guaranteed 2 year lease would make it more attractive for the risk. What has your experience been? What costs/benefits am I missing. I’m actually interested though, and if the business case is solid enough I’d be on board as well :)

[@daviddrost7963]

Their model "assumes" 100% occupancy ($200 x 30 = $6,000 Revenue). I don't see it.

[@Guyontheinternet1]

You would have to factor some low periods for sure and assuming we weren't in a global pandemic, would need to factor wear and tear for sure, the low barrier to entry for this strategy makes it a good one, again maybe not necessarily right now though.

[@ChandlerDavidSmith]

You guys are unreal! Don’t know how you do it all! Loved this video! I gotta get in to the Airbnb game!

[@CanadianRealEstateChannel]

Thanks! Thank goodness I’ve got a great team!

[@Guyontheinternet1]

Me too! I want to jump into this game post pandemic!

[@Guyontheinternet1]

@@CanadianRealEstateChannel Good team and leader from what I can tell! Delegating has always been a scary thing for me!

[@DanielIles]

In my experience a single Airbnb or even a few is a lot of work. But if you can scale with dozens of units it really starts to make sense!

[@CanadianRealEstateChannel]

I've been able to outsource most of the setup, management, and have met guys that manage 30-100+ units on airbnb. But you're right - if you're starting out in airbnb by yourself and trying to insource most of the functions - it can be a lot of work.

[@Guyontheinternet1]

Getting a good system with good people to quickly turn it over is key!

[@Guyontheinternet1]

@@CanadianRealEstateChannel Being good at systems is key here in order to scale, that's what I've gathered from these videos!

[@MikeRosehart]

Legal? Rerental is technically not legal (I’ve heard).. apparently you cannot sublet or re-rent a unit for more than the rent on your lease without providing that to your landlord, and they (the landlord) can go after you for the difference). a quick search confirmed this in Ontario. Can you comment on this? I assume getting explicit written permission would solve most of this downside.

[@CanadianRealEstateChannel]

Disagree - we pay hst on Airbnb and discloses to landlord - we’re providing a service

[@MikeRosehart]

Matt McKeever I’m curious on it, so if you sublet the landlord can go after you for the difference, but if you sublet on Airbnb below 28 days stay it’s ok? I’m actually genuinely curious, I’m all for you guys crushing it, which you are!

[@CanadianRealEstateChannel]

Does not the RTA cover only residential tenancies? When I read through the wording my interpretation is you can not rent a residential unit for residential purposes and then sublet it out for residential purposes for more money, if you do the landlord can come after. If we disclose on a lease form that we’re doing Airbnb - I have a hard time believing that an adjudicator would come after us. If they do, it’s only for the net difference (our profit). If it’s a major concern sign a contract instead of lease with the landlord or structure it as a property management deal with landlord. Problems or Profits

[@qwekuleroygyimah7728]

@mike Rosehart. He also mentioned at the beginning of the video that they make full disclosure to the landlord and have his consent to it on the lease. Sounds to me like he is completely covered against any of such claims

[@shorttermsage]

I love short term renting. It's such a great niche in real estate investing.

[@Guyontheinternet1]

And easy to pivot from in the event of a global pandemic!~

[@jennycarrier]

very nice but need some shower dispenser for shampoing ..body wash..its more simple plus you loose les product! plus the product do not go everywere in the the shower.

[@jj1562-e3m]

just wanted to say the math is wrong by something insignificant at the end by $300 , bus just wanted to point that out, it should be anual profit 6700, not 6900.

[@Guyontheinternet1]

Very interesting strategy nonetheless, in a normal non pandemic environment, I would dothis!

[@AirbnbRentalEmpire]

Informative stuff, keep it up!

[@CanadianRealEstateChannel]

Thanks for the support

[@thepodlabs]

$12,000 of IKEA products, I hope you were getting credit card points for all those purchases

[@Guyontheinternet1]

You can probably earn it back in a short amount of time, it would be interesting to see how to change this strategy for this environment.

[@amolgill7480]

Great video 👍 Do you think you can give us a video on which area you should look to rent ? I understand some areas make less money, some make more. Which area in Ontario do you believe in ?

[@Guyontheinternet1]

AirDNA is a good resource! I've used it before! Gives you good market data for AirBnb in every market, you do have to pay though!

[@carsonemery1846]

Can you depreciate the furniture you have setup?

[@Guyontheinternet1]

I think so! Depreciation rate would be different than depreciation on a building. I'm not an accountant though so you will want to confirm that!

[@1232bluejays]

So in the dead of winter in Ontario I bet occupancy takes a big hit

[@Guyontheinternet1]

Perhaps! It probably depends on area, maybe they get families needing a space for CHristmas and new years but after that imagine it would slow down, eh?

[@ggilbert4548]

Wow. Was surprised to find out this is in London Ontario

[@Ahem2002]

Interesting comments :) This model works well, and this type of business is as passive as you want to make it or as active as you want to make it.

[@CanadianRealEstateChannel]

100% agree

[@Guyontheinternet1]

It definitely has flexibility in that sense and you can also pivot into another strategy if ever needed!

[@Guyontheinternet1]

@@CanadianRealEstateChannel Super flexible strategy on multiple fronts, especially ability to pivot into other strategies when economic conditions change!

[@sheilag9345]

Great video ,well done as always ! Question ,no artwork is that because its not done or was it on purpose??

[@Guyontheinternet1]

Art would definitely help with creating a theme for this Airbnb, for sure!

[@wallihaley5194]

Nish of All Trades, I definitely would put some art there. It looked so sterile,

[@MikeRosehart]

I really enjoyed this video.

[@CanadianRealEstateChannel]

Thanks Mike!

[@Guyontheinternet1]

It was super instructional and informative.

[@Guyontheinternet1]

@@CanadianRealEstateChannel Same, this is a great guide that I can use in future!

[@danielfigueroa5534]

Great video! Lots of useful insight. I have a question, you talk a lot a bout moving on to the next property with your furniture and stuff... Are you moving out only after a year? It seems to me like the second year, when you finally got the return of your investment, would be the one to really generate big profits, so it doesn't make sense to me to be moving out of a property you've already worked really hard for a yewr to get all the 5-star reviews and the love from the Airbnb algorithms...

[@CanadianRealEstateChannel]

I just meant that if you need to move your operation you get to take furniture with you. Your right - once you and operational there’s no need to move unless landlord makes you

[@Guyontheinternet1]

True, 2nd year you would really see that income grow! The longer the airbnb is kept there, the better, I would think!

[@Guyontheinternet1]

@@CanadianRealEstateChannel I like the idea of writing off nice furniture!

[@thepodlabs]

I would be more focused on what’s going to hold up in a long-term then if it’s cute and Instagramable.

[@Guyontheinternet1]

The quality of the furniture, is IKEA, and IKEA is generally pretty decent! The nice thign about this strategy is that you can always pivot to another strategy very easily, very useful in a pandemic!

[@narutoowns266]

great video guys!

[@CanadianRealEstateChannel]

Thanks!

[@Guyontheinternet1]

Very detailed walkthrough of tactics applied using this strategy!

[@Guyontheinternet1]

@@CanadianRealEstateChannel I love this detailed walkthrough in the process.

[@gregsgrowth530]

Love the content! How has Covid affected this?

[@michael2275]

sounds like a decent amount of work for ~$10k. Especially when it's a short term setup I would hardly call it passive.

[@MikeRosehart]

Mike it’s definitely an active business that pays Ok. I can think of more lucrative ways to make use of my time, but it’s still somewhat passive after you’ve established it and setup managers.

[@dat604]

@@MikeRosehart interested to hear if you have a video on it

[@MikeRosehart]

Francis Vinh I don’t specifically have a video. I did a video interview with Candace about Airbnb, and sharing my experience. These guys are also experts. Happy to share my 2 cents as well, as with most things it situational. Sometimes Airbnb works well on properties, on others it doesn’t.

[@Guyontheinternet1]

Once it's set up it's fairly passive though, based on the systems their using. I love the low barrier entry on this, you don't need a down payment or qualify for a mortgage.

[@Guyontheinternet1]

@@MikeRosehart Low barrier to entry for this strategy makes it a clutch way to get into the game, obviously not the best strategy at the moment I imagine!

[@lucafigueiredo6005]

Is this strategy with new AirBnB regulations in major cities still effective today?

[@1232bluejays]

You better have a high rental occupancy rate

[@Guyontheinternet1]

Seasonal demand would be at play for sure!

[@sunrisegroup4912]

Do you have a wholesaling, VTB, private deal event coming up ? I though i saw one

[@CanadianRealEstateChannel]

YUP, Mike Rosehart will be one of our guest speakers too - here's the link: www.eventbrite.ca/e/writing-offers-and-sourcing-private-deals-tickets-61536986784

[@Guyontheinternet1]

More virtual events please!

[@Guyontheinternet1]

Sounds like it would be a very valuable event!

[@absonsimon5444]

So what insurance do you go with, that covers short term rentals?

[@vincenttsang3257]

I too am interested. Which insurance company did you use?

[@faustodazs3356]

@@vincenttsang3257 Abson, did you find any insurance companies that would cover this?

[@Guyontheinternet1]

Many insurance providers will cover Airbnb rental, Try CCV Insurance, Desjardins, Insurance Hero, Square one Insurance.

[@Gixxer600]

Does this still work in 2022?

[@davidsabroe421]

In DK it's only legal to short-time re-rent 70days/year 😭

[@Guyontheinternet1]

Donkey Kong? xD That acronym brings me back to my childhood. Those are quite the restrictions!

[@laxshooter15]

Can you use the depreciating furniture as a tax deduction w/ Airbnb?

[@thepodlabs]

No free Netflix? you’re dropping the ball on that one.

[@thepodlabs]

Alana Weaver I was joking

[@Guyontheinternet1]

Most do have their own subscriptions these days, it'd be unusual if they didn't, maybe more value would be free cable as that is super rare to see these days I imagine?!

[@Guyontheinternet1]

@@thepodlabs D'oh! Good one!

[@janicehussock7735]

When he laughs about people asking about taxes, you know this is a snow job. This may be a good gig for a very few. But a casual view shows many problems are being glossed over. One is the finances. Two is taxes. Three is consistency in renting. Please go to a business development course offered by your county. Beware.

[@adblackwood8452]

Where can i find this property on Airbnb?

[@CanadianRealEstateChannel]

On Airbnb

[@adblackwood8452]

@@CanadianRealEstateChannel very funny

[@ianjphillips67]

Nothing listed at this price in Lambeth

[@Guyontheinternet1]

You would have to look for it in the specific region it's in.

[@Guyontheinternet1]

@@adblackwood8452 Lol, potential customer!

[@brianpaton6687]

Airbnb Arbitrage or Airbnb Re-rental Strategy. Are we talking about two different rental strategies.

[@HungarianExperiment]

Second

[@CanadianRealEstateChannel]

🏅

[@KellanJames]

First!

[@CanadianRealEstateChannel]

🏆

[@Guyontheinternet1]

Winner winner chicken dinner! Luv the flexibility of this strategy with regards to being able to pivot into others in changing economic times.

[@misterzord2318]

Third!

[@CanadianRealEstateChannel]

🛎thanks for having notifications turned on!

[@aresinnet]

Stop taking units off the market in major cities. There are severe housing shortages going on in many cities. Housing units are difficult & expensive to replace.

[@accomplishedtheory9502]

Interesting... I think they should be able to do whatever they like with the property they've purchased.

[@4spremilimone]

Money sears consciences...

[@Guyontheinternet1]

Housing supply could be augmented if municipal regulations and processes were better steamlined to facilitate and encourage the building of secondary dwelling in existing homes. Bureaucracy is contributing to the problem big time!

[@jj1562-e3m]

but great video i like the ideaa!! love it.. !😃😃

[@Guyontheinternet1]

Genius idea, low barrier to entry, and easy to pivot out of in say.. a global pandemic!

[@Trenttabor]

Lol building equity in furniture, what a shitty debt paydown strategy.

[@rickymagicanada]

Great information guys

[@CanadianRealEstateChannel]

Thanks!

[@Guyontheinternet1]

Very nice walk through and explanation of the process, and the nice thing is you can pivot out of this strategy, eeasily into furnished rental