In this episode, The Young Retiree By 33 will be sharing how you can make money with AirBnB.
The Young Retiree By 33 is an AirBnB superhost with a few properties under his belt.
In this episode, we talk about how he got started, how he stands out in the hospitality capital of the world (Orlando), becoming an AirBnB superhost, and his goals going forward.
This is a great episode if you’ve been interested in learning how to make money with AirBnB this year.
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I'll be able to take care of my mortgage and utilities by the Airbnb and the long term. So I'll simply get a live for free again, which is my biggest living expense, typically, and, and be able to invest that money in other areas.
Unknown Speaker 0:18
You're listening to the winning to wealth podcast where you'll hear real stories from real people who are on the path to building real wealth. These stories will show you how to earn more money, pay off debt, start investing, and make better money choices so you can build wealth for your future. Now, here's your host, Michael Lacy.
What's up What's up? What's up teammates? Welcome to Episode 27 of the winning to wealth podcast. Now this is week four of our side hustle series and I brought on an anonymous guest this week. We're going to talk making extra money with Airbnb with the young retiree by 33. Now, just like I said on other episodes, I know we're in a strange time right now. So this is not one of those side hustles that you probably gonna jump right into just this week or even this month for that matter. This series was thought up months ago. And we recorded this episode right around the time that COVID-19 was really starting to get attention here in the US. But I still wanted to add this episode because I believe this is a great way for those of you who are really into real estate to earn some extra income once things settle back down. Now the young retiree also has some great plans in motion to actually reach his goal of retiring by the age of 33, as well. And so we've dabbled in some of those other ways he's aiming to reach that goal. And I want to say if you haven't already, just reach up and tap that subscribe button wherever you're listening to this so that you can stay up to date with the rest of this series. And some of the great episodes that I have lined up coming from You guys. Also make sure you check out the show notes page at winning to wealth comm slash Episode 27. It's going to be there where we have all the links and resources that we're going to mention in this episode. But let's jump right into my interview with the young retiree by 33 on side hustling with Airbnb. The young retiree, thank you so much for coming on the winning two worlds Show. I'm excited to talk to you. I'm excited to learn more about this side hustle you've been doing with Airbnb. But before we get into that, can you talk to me just about one of the earlier side hustles that you had something you did in childhood to make some extra money?
Yeah, so I actually had a really interesting first side hustle, and it started around when I was 12. And I didn't really actually know that was a side hustle until I started looking back at it now. So I got into playing tennis because my brother was I was in high school and he needed to play a sport. And he didn't want to do offseason. So the only sport left was tennis. So that's what he decided to play. And I ended up having to be his playing partner. So I really got into playing tennis and the better you get the more strings that you break on your racket. So if you a lot of people don't know that, like, the better you are like you break strings once a week, and you have to go to a country club and pay them 3040 bucks, sooner racket. And my parents were like, Hey, we're tired of paying this money every single every single month for me and my brother, go get our racket strum so they decided actually to buy us a stringer for our house. So like my brother's tennis coach came out to teach my brother nine how to string our own rackets. And then when it was interesting, what happened was, once I started talking about other people that like, Hey, I'm stringing my own records. Then they were like, hey, well, can you string my records because I have the same problem you do. And I'm not gonna learn how to string rackets. My parents are going to buy something. So So it actually ended up that I started a side hustle when I was 12, where I started taking the rackets from everybody on my team or people that I played tennis with through the different clubs that I played that and I would charge them $10 a racket because it would normally cost them 20 bucks plus the string cost at the country club. So I would charge 10 bucks a racket. And when I first started out, I was really down and it took me about an hour and a half to destroy your racket. So over I mean, but as a 12 year old, you're like, Hey, I'm making money. Like, I don't care. Like I see 10 bucks. Like I handed in the racket. They gave me the cash and I'm like, Whoa, yeah. And yeah, just like it turned into I was stringing around 1520 people charging $10 a racket, I got down to like 15 minutes it took for every racket out a string. And so I was starting to make money and I was like, What the heck is going on like this just this feels weird. Then I continue to actually continue that through through high school and then through college, because I was at the one tennis player up in Buffalo, and I strung for my team that $7 a racket. And I was drinking like, five six rackets at night, every single night. Because I mean, those guys like we're breaking strings every day, two days. Once we're playing at that level indoors, everything's so much faster. So it's definitely an interesting side hustle to start at such a young age. I didn't even realize as a side hustle, though, until I started my blog and start talking about my childhood. And I was like, dang, I hadn't side hustle was.
So can you talk a little bit about just kind of what you learned from that experience, if anything about you know, managing business side hustle, making money, all that like what did that do for you?
I think one of the biggest things that I learned from a side hustle was that I learned how to monetize a unique skill and ability that I had, that shooting rockets was not a common skill to have and like nobody in my town strong rackets other than the country clubs, or the big the big schools, like they would have a shredder but I was able to leverage my unique capabilities and talents that I had to make money and monetize off of it. And I would say, I continue that as I got older and I grew to be a top five player in the state of Texas, I would have these parents that would see me at tournaments, and especially the like younger girls, dads would always want their girls to hit with a guy because we have more spin, we hit the ball a little bit harder. So like, I would start like having these dads come up to me and said, Hey, can you coach my kid and just hit with them for an hour, like every single week, and we'll pay you 50 bucks an hour and I'm just sitting there like, yeah, like I have a unique skill and ability to like, I'm a good tennis player, and they see this number leveraging that to be able to go out and do stuff and I continue doing like leveraging my skills was my background in engineering and operations. And a lot of data analytics to continue and progress that as I as I've gone throughout my career and work even even after school, so I would say definitely leveraging your unique skills and abilities and being able to monetize off of that.
Gotcha. Okay, so let's talk about your pivot to real estate investing, right cuz now you've got house hacking. You've got Airbnb s and those sorts things. Was that something that you were introduced into at an early age or did you just kind of stumble across that one day?
Yeah, that was that was really interesting because my parents and everything that talk about money growing up, there's no real estate talk my my uncle and cousin we're big into real estate in in Arizona, Phoenix, Arizona, but I never talked about it with them. I never knew anything about real estate. It really didn't start until after graduating college and I had a buddy of mine that I was working with, who was an office manager at the building that I was at and He we started talking one day and he's like, Hey, man, have you ever heard of this book called Rich Dad, Florida? And I'm like, no. And I'm like, I hate reading. And I'm like, I don't want to, I don't want to read a book. Like, don't come to me and like, say, Hey, I like read this book. And I actually took the book. I took advice, and he's like, Hey, man, you got to read this. Some of the books, I read the book and I was like, holy crap, I there's this whole other world and this mindset that I've never even experienced or thought or further though, and that was really my, my jump into looking at real estate. Now at the time, I was still renting in Pennsylvania for my job. But once I got relocated down to Orlando, I knew at that point, I didn't want to rent. I didn't know what I was going to do. Like what ended up happening with house hacking. Like everything has happened since I didn't realize that all that was gonna happen, but I just knew that like a renting for me in my personal situation. I just it just didn't matter. Makes sense, because like, there's no reason to throw that money out every single month at rent when I was I was never going to receive a return on that money.
How old were you around this time when you read the book and you started kind of having these thoughts?
That was 22 when I read the book, and then after reading the book, I got into, like, I literally googled real estate. Like I can only learn about real estate and that's when BiggerPockets popped up. And then I just started consuming all their podcasts from I literally went back to podcast one, and started consuming all their content. So when I my first house that I bought, I was 23 and I moved to Orlando, I think I was 23 when I moved to Orlando now is the first house that I bought, and and then yeah, it's kind of spiraled. From there snowballed from there.
Okay, so let's talk a little bit about what your portfolio looks like today. Because I mean, and talk about just kind of how old you are. So how much time has passed and then what you've been able to build your profession. Do to in this amount of time?
Yes, I'm 27 years old right now I have four properties. Two of them are townhomes, one's a single family home and one's a triplex. So the two townhomes are Airbnb specific properties that are down towards the Disney rather. And the first one of those that I bought was in August of last year. The second one I actually closed on about 20 days ago or so, because I wanted to like at that point, I knew I want to get another property after buying my first house, but I wasn't 100% sure if Airbnb or I was going to work. But once I was able to prove that, like, I ran the numbers and like I saw real numbers coming in. And once I saw those installed with the cash flow, it was like that was when I was like, Hey, I got to pull the trigger again. Like I've waited too long already, like I need to continue to trigger and get more properties. And then this triplex that I'm in now I closed on last Friday. And this one's going to be interesting because I'm gonna do like a combination of house hacking and Airbnb that are on Airbnb and long term rental. So there's a two one and then two one one's stabbed in the back I'm gonna live in the one one that's upstairs and then on Airbnb now the other one that's downstairs so yeah, right now I have four properties. And then so to go strictly Airbnb, this is a house hack that I'll do one Airbnb one long term, and then my other house in in winter garden, I actually do long term rental by the room. So it's a little bit different strategy as well. But I found that that works. That works really well and the HOA restrictions and everything in that area. allow for that. So that was another big thing I had to look at when when looking at properties and making sure from Hoa restrictions standpoint, from a county standpoint, what are the restrictions that they have in place by renting out my bedroom or short term rental, minimum lease agreements, all that kind of stuff. So it's really important to understand your area and kind of To understand what strategies work better in different parts of the country,
you got Airbnb , you've got house hacks. Let's focus a little bit on the Airbnb side of things for now. Okay, let's talk about how you started that process how you found your first one and then kind of walk me through that process of selecting just the right property for the Airbnb because one thing that can happen i'm sure is you can pick a property and it's way away. Nobody has interest in it, you never rent it out. So kind of what are some things that you're looking for in a property when you're choosing it?
Yeah, so I started doing a bunch of research because I knew I wanted to get more real estate but I didn't know exactly what strategy I wanted to do. I knew I wanted to essentially want to rent but I just saw this Airbnb and like, I just saw what the potential of Airbnb was. So I started doing a bunch of research on like, how do I find the Airbnb that makes sense exactly like you're saying, it's very easy to like think your property's going to be awesome. And then it's just in a bad spot and location. So, so important. So what I did was I looked at there is a website, there's couple different websites, but the one that I specifically use is called mash visor. And what mash visor does is you can essentially put in a city so I can put in Orlando, I can put in where Portland wherever you want to go. And you can toggle on different views. So essentially, it just shows a map. And you can toggle on like occupancy rates and nightly rate or like monthly income, and Airbnb cash on cash return, you could also toggle for long term rent on and things of that nature. Now the data is not 100% accurate, but it's directionally correct. You have to do more research by actually going into Airbnb and clicking on listings and seeing what calendars look like. But I essentially toggled between the different filters that they have on advisor in a zoomed out view of Orlando knowing that like I wanted to be in the Disney World area, and then I essentially toggle between the different filters Then every every like overlapping area where there was more green between the different filters, I would continue to zoom in and do the filters again. And then I continue to zoom in the filters again, until I really targeted to like a very, very specific area that I found works for me now I'm sure there's other areas in and around Orlando and around Disney World and universal that would work and do awesome. But I found the area that I really really liked and it had a lot of the style of rooms that I'm specifically looking for. And a lot of them in these areas become completely furnished. So like you bought a property and a lot of them are completely furnished in and like the two guy bought a semi. I've really just updated a lot of the decor and added some extra pop for for pictures so that they really stand out on here.
So let's talk about that a little bit because you're in an a really popular tourist destination, right and I'm sure that when you're Looking at that I'm sure some of those houses are more expensive. So how do you run the numbers to see like, okay, yes, this is a little more expensive than something that's 20 miles away, but I can charge more. And so I guess, where do you find that that ideal rate of return when you're looking at numbers?
Yes. So for me I was looking at and that's really where you have to go on to Airbnb and start doing more detailed research. Because a lot of the nightly rates to be honest, from what I see one is like isn't property really nice, but that's important. Does that have a pool? Does it have a heated pool? Like what is what are the actual inside is modern, that kind of stuff. All that's important, though, what's what's the what's the most important to look at is like, how much you can charge per person or less. That's, that's the thing. So like, you want to look at here you're doing it for free. And you know, two of the bedrooms are gonna have two plans. one's going to be the master. It's gonna have a king size, one's going to be cleaner and other teeth one's like, you're going to be able to sleep eight people in that house. And then if you had a futon Something else downstairs, maybe a couple more. But like it's really understanding what the price points are in different areas by the number of people that are going to stay at that property. Once you really hone in on like what's the high end, what's the low end, so you can understand like what ranges and off am I working with, then you're able to really figure out and run the numbers to understand Okay, in this area for a three two and a half, that's gonna sleep six people, I can't afford to pay this amount monthly and expenses and then back into what the what the price point is that you need to stay in. So there's a lot of that it's not overly complex and I created my own like analysis spreadsheet or Airbnb rentals that you can essentially plug in different occupancy rates and then you can plug in base price and certain price per night increases and you can see what the different cash on cash returns are so that you could really understand like, Okay, well if I want to play a super conservative and say that my base knife nightly rates going to be 80 bucks. You would plug in 80 bucks for the base nightly rate and the and then you can say okay, well what if my occupancy is 60%? What if it's 70%? What if it's 80%? What if it's 85%? And then you can plug it in, okay, well what if I ran it for $85 a night, or 87 or 89 or 90 whatever numbers you want, and you'd see the variation and that it's essentially a sensitivity analysis so you can see the variation and understand Okay, is this a good investment very conservatively if I get it to 75 80% occupancy and increase the price by a little bit what does that do to my cash on cash return? So understanding how how many individuals can sleep in the in the place that you're you're hosting at and then looking on Airbnb for like, what's the sweet spot for like the top people and what is super important to do when you're doing this research on Airbnb is there there's a lot of clickbait stuff in Airbnb. So there's a lot of people that like you Go and like you see on the main page of the listing that is $50 a night $60 a night whatever. Well what they do is you can literally put one night on your calendar anytime in the future and and put it out at low price point and then that's going to draw people to click on that but once you click the actual dates then all sudden as like as like staying in it everything awesome. You see the price double and you're like what like it was $50 a night like what the heck is this. So make sure to like you click on different times of the year, as well as like we are weekdays weekends, because like there's a lot of variation in price weekday weekend. And you can really start to get a feel for average, like over a week. What is a Monday to Sunday stay going to be at an hourly rate during low season and in the middle of the middle season and then during the high season. So getting all that information is extremely important.
Right. Okay, so then, you know, we've kind of touched on pricing a little bit what percentage of that revenue is going towards profit and what kind of percentage of it is going towards expenses like you know this Airbnb take their expenses, obviously you have cleaning and you know all those other things. So kind of what's the breakdown percentage wise between what goes in your pocket and what goes out the door on the other side?
It's I don't know the exact I don't know by percentage, but how I could say is, so I set my price per night. There. There's two things that I said. And there's other stuff that I don't see. So I set my price per night that I want that I want to me, and then I set my cleaning fee. Those are the two things that I said. Now, once the guest sees as far as like Airbnb, like what they're charging or whatnot, I don't see that information that's only seen so that that's only seen by the guests. So I don't look at it necessarily as a percentage. I'm sure I could like break it out as a percentage of like $120 a night 10% of that goes to cleaning or whatever, but like I charge for cleaning because that's another one that like everybody always asks like, well like you Cleaning is a big expense. I'm like, Yeah, but I don't pay for cleaning, I have my guests pay for the cleaning. So like on my four three that has been up and running since August, I charge $110 per clean, and I charge so I charged the guests $110 and I get charged $100 by my cleaner. So I have a $10 buffer that I use for additional things or like their stuff, there's scenarios where like something breaks or it doesn't happen often but like there's always gonna be something that could happen. So I use that additional $10 buffer as like hey, if I need to replace things I also like provide some stuff to the guests that cost couple bucks to be for each booking. So there's ways there's ways around eating the entire cost of certain things. But all in all I said is the price per night that I want to make in the cleaning. Airbnb takes a very small service fee out of my portion. It's usually like 10 or 15 bucks. It's nothing crazy for booking Depends on how long the booking is and how expensive it was. But that's usually not that
expensive. What has been the highest grossing month for you with Airbnb? Do you know that off the top of your head,
so highest grossing for one property? So was 5400, and my four bedroom, three bathroom with a pool. Now, once that's fully matured, which is home going into the high season, unfortunately stuff happens and whatever. But I think the highest grossing level will be 5500 to 6000. And then I think at from a net perspective, it'll be between.
Gotcha. Okay, so you touched on, things break in a little bit, how normal is property damage within Airbnb? And what do you do to kind of account for that when that happens?
So the great thing about Airbnb is they have a million dollar insurance policy. Now I know how to use it. What I have had to do in one scenario, I had to guess that didn't leave the place nice that they had a dog, they had a dog there, I would have my listing as no pets. And then they just left a lot of trash and it just took my cleaners extra amount of time. All you have to do in that scenario is have your cleaner take pictures of what it looks like when they get there, there's any damage, you submit a ticket to Airbnb, and then you and then you submit saying, Hey, this is exactly how much it cost me to be able to fix all this. And then for this particular scenario, it was 250 bucks. And like, I submit everything, the invoice from my cleaner to Airbnb, and within two days and with all the pictures of like this exactly what happened. And within two days, Airbnb, as they saw I had all that like it was literally a I submit everything right after the guests left, there was no way that they could say, Oh, that was the next guest or whatever, like you have to submit at times. But if you submit all the right stuffs, not a big deal. Typically you'll get paid out, at least for my experience. got paid out. I don't know if that's always gone, but I provided enough information to them to get paid out. But that's the only guess that I've had anything major happen. I've had like a couple small things where a curtain rod falls, and like the edge of the curtain rod breaks is $5 to go fix that is not that big of a deal. And at that point, I'm not even going to charge the guest, I'm just going to let them know like, hey, not a big deal. Like, stuff happens in the house. Like, if the AC went out, that's gonna happen. Like it's gonna happen when a guest is there. So I made sure to let them know up front that like, this is a house things break. But let me know if something breaks. And I'll fix it as quick as I can for like, I want to make sure that you have a good experience and I want to make sure that you're relaxing. Just let me know something breaks and I'll take care.
Let's talk about the properties a little bit. I mean, you again, you're in a high tourist area. There's a lot of competition, there's hotel hotels, there's nords there's other Airbnb. I mean, there's just a lot of money. position where you are. So what do you do to make your property stand out in an area like that?
Yeah, so Airbnb SEO, Search Engine Optimization is one of the most important things because like you're saying, Orlando, extremely competitive environment. We're known as the hospitality capital of the world. Like, everybody comes to Orlando for the parks for the beaches, whatever. So understanding Airbnb SEO, and understanding how to optimize your listing for people to click in and for people to book is extremely important that there's multiple things that are important, but the most important thing is you have to have a opening picture on your listing that pops like it needs to like wow, the the people that are scrolling through you got to think these people are scrolling through 50 100, Airbnb s and a lot of them like you get two seconds like you get that quick scroll like they're looking at that first picture, that first picture doesn't excite them, then they're going to just keep on scrolling. You got to really make sure that first picture off and I highly I highly recommend getting a professional photographer, it is worth $200 it is worth $500 to get a professional photographer to set your place up in a cool way so and when so when a photographer like I set up the dining table with like the plates out with a little napkin ring and a nice napkin with glasses out for like wine glasses out, like you got to really make it pop. And then professional photographers can can just make your property looks so much better in a picture than you'll ever be able to do like iPhones and all like all this technology is great. Don't get me wrong, like the cameras on these phones now are incredible. But what these professional photographers can do with pictures is is just unbelievable. So like that's the first thing you really got to have good pictures of your property. Another thing is you have to have good reviews. five star reviews are so important if you it like If you do not start getting five star reviews immediately from the very beginning, like your listing, just gonna drop an SEO and in this market, you're not gonna be able to save up, like you're just gonna be on page 30. And there's no way anybody's getting to page 30 to see your listing, there's 10s of thousands of Airbnb s in and around the Orlando area, plus all the hotels and everything that you were talking about before. And the resorts that people say, you have got to get good reviews, you don't get five star reviews, you're going to be putting your your listing on. And I'm really, really that spot. And then I would I would say being a super host is also extremely important. Now that comes with time that comes with reviews that comes with a few other things. But being a super host is really important. And it makes a big difference because now even like people can go online and filter just for Super host listings, because they know that host more than likely is going to deliver a great experience or have an awesome place
to stay Right. So I mean, talk about some of those steps that that you took to become a super Host.
Yeah, so a lot of research. And really, a lot of it is providing that information to the guests that they need to be able to have a great day. So everybody wants to have the Wi Fi, I provide like Netflix automatically for all like the downstairs rooms so they can literally just turn it on. They don't have to sign in on their account, like it's logged in for them already. Providing all these extra things like when you when you come into my properties, you'll get a handwritten note plus, like two pieces of candy. It doesn't take a long time for me, but like a handwritten personalized note to guess. Plus like some like treats and stuff like that like that goes a long way along with your communication and other things you provide. I also provide before they check in like super clear checking instruction. So like I've never had an issue with a guest like through the check in process everybody's been able to get in without me having to like Talk to them or they have to ask questions because I'm extremely clear and and like tell them exactly what to do and what their code is and all that stuff. So I think delivering a seamless check in process over providing information before they get there. And when they're there, I have guide books that are printed out that have like recommendations for what to do what to see different areas to go to different restaurants to eat. And then I provide everything that you could possibly need in the kitchen. So I have a spice rack with 20 different spices. I have oil, cooking oil on the Keurig. And I provide some k cups for them. toaster blender, everything that they could possibly need to really, really have a good day and never have to, like get on the app and text me or message me through every day saying hey, do you have this? I want I want to guess never have to ask. I just want to have it for them and never have to worry about
gotcha. Okay. So then, I mean, let's talk about Because that sounds like a, it could be a pretty intense setup there. And so what's been the time commitment for you in managing your Airbnb? And like, do you outsource some of that? Or do you manage most of it yourself?
Yes, I hundred percent manage myself. Managing the process is what I enjoy the most. And when you were touching on before, the setup is definitely the hardest and most time consuming is making sure that you have everything that you need, making sure that the place is set up. So you can come get a professional photographer in there. That's the biggest time drain early on. It's that first couple of weeks of like, making sure everything that the guests possible candy is there, and that you go above and beyond. I have a checklist now of like, hey, here are the things that I need to petition. Here's the things that I need and all the bedrooms that I'm going to start providing on my website and through my Instagram. And it's essentially what I use in all my places. So I already I remember the first Airbnb I got, I took 30 trips to Walmart because I would go to Walmart I was like, I know I have to get these three things come back and then I'll walk into another room I'm like crap, I need to get these five things I go back to Walmart and come back again. So like really just being able to take one trip over there or order everything online and get it the the stuff that you need, and get it to your place and get it all set up instead of the really doesn't take that long. But making sure you buy everything that you need, definitely does. So from a management standpoint, I would say hello managing the properties myself, I love interacting with guests and and communicating them and making sure that I deliver a great experience for them. And the only thing I've outsourced is cleaning. Now my cleaners in current state my cleaners are co hosts on my account so they can see my calendar they see when people are checking out to see when people are checking in. So the only thing I don't do myself is
I'll pay and outsource outsource that.
Right. Okay, so I mean, we've mentioned all the good right? This sounds like an incredible side hustle, but in your own words, I mean what have been some of the challenges that you faced with Airbnb? So I
would say the biggest challenge is what I'm going through right now with the Coronavirus like everybody freaking out and all the travel bans and everything so this month and next month are in in the Orlando area are two of the busiest months cuz Yeah, Spring Break that's going on through this time. So those are always staggered out. And it's two of the busiest months outside of a couple other times, which means it's usually the month that you can charge the most well with all the stuff and news and media and travel bans currencies and all that stuff. I've had literally almost every single my calendars were booked like entirely both I two days on one property that we're on both on one day on another property that was on both and then this property in the world. One downstairs, I have two days that were on both. Well now, like, my calendars are clear, everybody canceled, and it's like 100% cancellation, and they get 100% refund and all that. So it's like, I would have never guessed that Disney would close. Like Disney's close. I think I was talking to a friend of mine who works for Disney a day. He's like, disney world has closed maybe five days since it's been open. And now it's been closed, like it's scheduled to close to the rest of the month. And who knows, depending on like, what could happen with this. So I'd say like the unforeseen stuff like that, like it's completely outside of my control. Like there's no reason for me to worry about because there's literally zero that I can do to fix it. So like what for me, I think that's the it's definitely been an awesome experience. It sucks but like it's been an awesome experience to go through. You got your head and mouth couple times and like stay standing to be able to like go through and really create your own business and and really try to create something that's sustainable and scalable and with my w two income that I still have coming in. And then through house hacking, like my expenses are super low. So being able to carry those mortgages on the three other properties isn't that big of a deal because I set myself up in a very unique way where my expenses are extremely low, and then all the cash flow I get from my Airbnb properties, and my house hacks really help pay for my living. So I say you gotta you gotta set yourself up to in case something happens like this. I would have never guessed that Disney would close and the Coronavirus and like all this stuff, what happened? What happened and like everybody's reacting to it in the initial return and in hospitality growth. And it's just you got to be able to roll with the punches and you gotta gotta have a game plan for Worst case scenario. Never want to think worst case scenario is going to happen, but you have to have a game plan or if it does,
so just there we were talking about you know, you're done. W two income and your house ads kind of carrying you through this this challenging season that we're in. And so I do want to kind of transition to the house hacking part. Can you just talk a little bit about your house hacking experience? I know there are a few different ways that you can do a house hack. So what's that been like for you?
So house hacking is essentially buying a house and renting out buying a house buying a multiplex, small multifamily or even larger multifamily and renting out either bedrooms or units to help pay for your mortgage. So I've done two different strategies. Now. The first strategy I did was running out by the bedroom long term. So I would run out by the bedroom long term that would bring in 2400, around 20 $400 a month. I created it was a three to create an additional bedroom because I had a walk in office that was just like empty space that I wasn't using by drywall that out the door there, create a fourth bedroom and I was bringing in 2400 dollars a month my mortgage is 1650 1770 you would like some of the tax stuff that happened with reassessments. And then after all expenses are paid, mortgage, utilities, hoa, water, all that stuff after all of that was paid. I made $100 a month, typically around $100 a month. So not only did I live in my house for free, but I was paying them I was the people that were living in my house, were paying down my mortgage, and I was making money. And so like when you when you read books like set for life by Scott trencher, or these different books that talk about what your expenses are typically 30 to 35% of most Americans expense monthly expenses are housing, utilities, internet, all that stuff. And being able to cut that largest expense out will allow you to now if you want redeploy that number or that whatever money that is that you're saving on your housing, what you invest that or why you use that in different in different manners. that maybe is more valuable to you. And I would say like during the house hacking was extremely important for me to get to where I'm at today. Because once you cut those expenses and you start having more cash coming in that, like you start to see your bank accounts or your investment accounts increase, like it's just a snowball effect, like it's just like compound interest is real. And the earlier you started, the faster you're going to get wherever it is that you want to go in the future. And with this house, I finally I don't know why it took so long, finally is like, hey, I need to do house soon, because there's no reason not to, and I could move out of my house in winter garden and move. I wanted to move towards South East Orlando, which was the area that had a lot more like young professionals versus where I used to live was very much family oriented, which wasn't bad, like it's great for house but I want to get a spot that had more young professionals that this house is a little bit different. So I wanted to dry clothes which essentially three units it's a two one and two one ones and I live in one of the ones I'm going to Airbnb the one of the ones and then I'm going to long term rent the two one so it's a little bit different style house back then what I was doing right by the bedroom in winter garden, but again, it's it's I'll be able to take care of my mortgage and utilities by the Airbnb and the long term room. So essentially, it'll live for free again, which is my biggest living expense, typically, and and be able to invest that money in other areas.
So you have essentially eliminated your largest expense. You have a W two income and then you have these Airbnb s and all these other properties that generate income for you as well. So with all of that, I mean, what are some of your biggest goals that you have from this point going forward?
Yeah, so I have three big goals but what I'm what I'm really trying to figure out right now. So ever since I started doing the Airbnb and the house hacking, I just have really had this entrepreneurial itch that just like continues to, like get stronger and stronger. So I'm working on trying to do is continue to develop my side hustle to develop the other side income streams that I have to be able to fund my lifestyle and the lifestyle I want to have because I learned a very minimalist myself. I'm right now and I do the house hacking. So I save a lot of money through through doing that. But I want to be able to transition my income. If you look at you look at income as a percentage, I want to transition a lot of my income from right now it's very heavy w two and slower on the on the side hustle side. I want that side hustle to continue to grow and grow and grow and become more than what my w two is where I'll be able to take that step and be like, hey, I want to go full time into this side. Hustle an entrepreneurial gig that I have going on but need to continue to expand and grow and scale. This side hustle, it's doing well right now and I could I could quit my w two tomorrow and be able to live because of the house hacking and Airbnb, but I want to be able to continue to grow it so that I would have I'd be able to do stuff like I quit now and and live of crap life for ever felt like it just be like super, super minimalist. Like I want to I want to get to the point where I have time for you. Like that's my goal. I don't want to sign a number. Like I want to have the ability to do what I want when I want with whoever I want and not have to worry about like I don't want to have to, oh, that's like a cost too much. I don't want to have to worry about that. So I think continuing to hustle and grind like I'm doing continuing to go down the short term rental plus house hacking has been a really, really good way to start.
Transcribed by https://otter.ai
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