Gary case study: over $30,000 a month in cash flow from his Airbnb homes

This is one client's story, from one recorded interview between Preston and Gary, posted in June 2023. Every number about Gary's business below was said on that call. Nothing was added.

Who Gary is and where he started

Gary spent five years at eBay. Then he moved to Chegg, an education startup, where he ran the marketing team until 2017. After that he did marketing consulting.

Real estate came earlier. He bought his first house in 2006 and did a lot of renovation work on it. His best friend from school has worked in construction since 2005, and the two have done projects together ever since.

He traveled a lot in those years and first stayed in an Airbnb around 2012 or 2013. One host, in Helsinki, had the same taste in speakers and decor. They became pen pals and are still friends, though they have never met.

Gary listed his first Airbnb around 2020, about three years before this talk. He lives in the Bay Area with his wife and their two and a half year old daughter. His company, Home Collective, does the management, construction, renovation, design and furniture for its homes. Most of its investors are from the Bay Area.

What Gary did

1. He picked a city he would want to live in

In 2020, right after COVID hit, Gary and his partners in a Bay Area construction business saw a chance in Austin. People and tech companies were moving there, and AirDNA data showed the numbers made sense. His top rule is to invest in a place he enjoys, and he calls Austin "one of those places I could totally see myself moving to."

2. He bought homes instead of renting them

Many beginners start with rental arbitrage, which means renting a home and listing it on Airbnb. Gary buys instead, or gets investors to buy with him, because he puts a lot into each home, like a custom staircase and a drop ceiling over a pool table. He does not want an owner taking a house back after two or three years, but he says arbitrage can work well for others.

3. He looked for a pool in every new Austin home

Austin was over 100 degrees in early June when they spoke, and Gary says it can reach 110 in July and August. So for every home he gets now, he looks for one with a pool. He also adds rare extras like a sauna, a jacuzzi and room for 15 people, because each one cuts the number of homes he competes with when guests filter their search.

4. He built each home for one kind of guest

One home sits close to the neighbors, so he aimed it at women, who he finds are quieter. It has an eight foot fence, a custom neon sign and a Polaroid photo booth. A bigger home with a Texas style barbecue grill, a pool table and a ping pong table is aimed at men, who in his experience are louder but almost never complain.

5. He priced low early so planners book months ahead

He uses PriceLabs, not Airbnb's Smart Pricing, and sets prices lower at first so weekends book far ahead, then raises prices on the dates left. He finds people who book four to six months out take better care of the house. One North Austin home had nearly every weekend booked into October, and it had been that full since about February.

6. He kept long stay discounts small

Airbnb suggested about 35% off for a month and about 21% for a week. Gary keeps his weekly discount under 10% and his monthly one in the teens, since guests who stay a month ask for more fixes and leave cleaners a bigger mess. He would rather book every weekend.

He has also started to automate, with Hospitable for guest messages, PriceLabs for prices and Turno for cleaning. His goal is about 10 homes in Austin, and he thinks one city could grow to 20 to 30. San Diego, if its short-term rental rules allow, and the area around Anaheim are next on his list.

The numbers

Every number here was said on the call. Our copy of the transcript has no time stamps, so the last column says roughly where in the 32 minute video each number comes up.

Gross is what guests pay. Cash flow is what is left after costs.

Three things to know about this table. First, Gary never gives a monthly total of his own. The over $30,000 is how Preston sums it up in the opening. Second, the $10,000 and the $5,000 to $6,000 are what Gary says he is "targeting" for each home, not a count of what came in last month. Third, earlier versions of this story said $35,000 a month. No one says that number on the call, so this page uses the one Preston gives.

In Gary's words

The transcript comes from YouTube's automatic captions. Only punctuation was added.

On what happened when he cut prices to fill empty dates:

"When I start lowering the prices, what I actually see is that the quality of the guest starts deteriorating a little bit."

He says he did not get into Airbnb for the money. He used to love Legos and Sims, and he loves the data side of marketing:

"I'm playing real life Monopoly, Legos and Sims all together."

His advice for someone starting out:

"There's many different ways to attack this problem or attack this industry. You really want to just pick the brains of people that are already doing it."

What to take from this

This is one client's result, not an average and not a promise. Gary started with a long marketing career, years of renovation work beside a friend in construction, and investors who buy homes with him. He buys rather than rents, and he spends a lot on design. Most people starting out have far less of that, and he is clear that a different city needs different things.

The habits behind his numbers are plain. He picks places he knows and likes, learns what guests there search for, and prices for the guests he wants, not just to fill dates. He also suggests Facebook groups, local meetups and groups like Preston's, to learn from people already doing it. Nothing here is tax, legal or investment advice. More Airbnb client results are on the reviews and client results page.