Five setbacks Preston faced building 7 Airbnbs and how to avoid them

0:00 I'm making $34,000 per month for my seven short-term rental properties and hold up I'm not here to brag but I want to give you the five setbacks that I face when building my portfolio and the mistakes that I made along the way and if you're serious about building a real estate Empire then these five things that I learned will help you scale your business a lot faster it's going to save you a ton of time and also money so that being said let's get into it setback number one was the unexpected maintenance and repair cost let me tell you about our first real taste of unexpected maintenance issues and this was back when we had launched our very first property and we're still learning the ropes so we had our first guest staying in the property they go downstairs to use the toilet they flush it and then suddenly the thing starts overflowing like crazy and I'm talking everywhere flooding a good chunk of the basement so we're scrambling to get a plumber out there and they end up having to rip out the entire toilet and you're not going to believe what they found it was a rag stuck in the plumbing left there by the previous contractor that one little oversight caused about $2,000 worth of damage luckily the guests were super cool and they were understanding about the whole thing but it could have been much much worse and imagine this had happened in the middle of the night and they woke up to a completely fun basement we're just thankful that we caught it in time but man that was such a stressful start here we are brand into the short-term rental game and our very first guess experience involves a flood and a $2,000 repair bill they had a second guessing everything wondering if we had even made the right decision to get into shorter mentals but do you know

1:17 what that ended up being the only major issue we had for a long time it was like getting that big scare out of the way early and it taught us invaluable lesson about being prepared for the unexpected so how do you deal with this number one always have an emergency fund set aside a portion of your earnings for unexpected repairs I recommend setting aside at least $2 per square foot of your property so let's say your place is 1,000 ft you'd want to set aside $2,000 for an emergency fund ready to go on top of that I also set aside a percentage of my gross income each month for free to repairs and maintenance and depending on the age of your property this could be anywhere from 3 to 8% most people make the mistake of running their numbers like this they do Revenue minus mortgage or rent minus utilities equals cash flow but your true cash flow is going to look more like this even if you own the property Revenue minus mortgage or rent utilities Insurance internet software repairs maintenance Reserve minus booking platforms minus property taxes that's going to be your cash flow you're also going to want to build a reliable network of contractors and handyman who could handle issues quickly I found great people on platforms like Thumbtack and when interviewing these potential contractors make sure that you ask for references check their license and insurance and make sure they have experience with the specific issues common in your property type also be proactive about maintenance regular inspections and upkeep can prevent many major issues down the line so you're going to want to schedule regular inspections at least orderly and address small issues before they become a big problem this could also include things

2:33 like checking for leaks testing smoke detectors and also cleaning gutters we usually just send our contract as a checklist we generate from chat jbt to go through every single item and make sure everything is working well here's a prpt thing can use you can take a screenshot of this now stepback number two was dealing with difficult guests we've all heard the horror stories of the party animals who trash your place the ones who complain about everything but let me tell you about the weirdest guest experience I've ever had this guy checks in with his dog everything seems normal at first but then later that night some random woman shows up who was was even on the reservation and we tried to ask who she was but got no response then out of nowhere the guy starts blowing up my phone with angry messages like why did you lock the thermostat that's not Humane and we're like dude just calm down it's not locked just follow the instructions we sent but he's got angrier and angrier and K calling him dumb and the next morning my cleaners show up at the guest checkout time and guess what the guests are still there so we called them no answer of course and the clearing knocks on the door the guy finally comes out looking like he just rolled out of bed and saying hey you know we're just finishing up church just give us a few minutes they ended up staying a whole hour past checkout and when my cleaner's finally gone there they're like Preston these guys who were super weird there's white bread all over the place a strange smell of incense and it looked like they were doing some kind of rituals that they called Church thankfully that was the extent of it but it just goes to show you never know what kind of guess you're going to get so here's what you're going to do to prevent this first thing you want to do is message your guests about

3:50 their intentions for this day make sure to check their reviews from other hosts as well and be wary of guests who say it's just a small get together also the guest that caus them most trouble usually just want to say for one night they ask for discounts or live in the same city these can all be red flags the second thing is install noise detectors like minute it tracks at decimal levels inside the home and if it reaches above a certain threshold that you set it's going to alert you and it doesn't record conversation so your guest privacy is protected the third thing is to install a ring flood light camera that way you can confirm how many guests are actually coming in versus what they put on their reservation and if a guest raises some or all these red flags they need to be on high alert but the good news is this doesn't have to take up a ton of your time cuz I have my virtual assistant develop a relationship with the guest they they call them message them to make sure that they're going to be a good fit for our property number four clearly outline your expectations for each guest behavior in your air listing be specific about things like quiet hours maximum occupancy and your policies on smoking pets and parties number five when issues arise be firm but professional in your communication talk to your guest and refer back to the airb rules for example you can say hey guest I noticed from the noise complaint that there was more than eight people in the house last night as mentioned in our house rules that maximum occupancy is six guests and number six is document everything have your cleaners take photos of any damage safe communication threads file incident reports with Airbnb if necessary this is going to be crucial if you need to make a claim or pursue legal action and in a

5:07 worst case scenario if your property does get damaged or guest gets hurt you can use the information you've gathered to file a claim with Air's host damage protection or host liability insurance also this host damage protection covers up to $3 million in Damages to your place or your belonging is caused by a guest and host liability insurance offers up to a million dollars in case you're found legally responsible for a guest getting hurt or their belongings being damaged or stolen the the third setback is navigating local regulations and permits the last thing you want to do is to launch your Airbnb only to get shut down a month or two later just as any short-term rental owner in New York City here's how you can avoid the setback number one do your homework start by checking your city and county websites for informations on short-term rental regulations look for things like zoning restrictions permit requirements and tax obligations I also want to add a note to this sometimes the websites can be outdated so make sure they call the city or county directly and see what changes might be upcoming number two is Type in short-term rental regulations and then your city or county name and then click the news tab to see if there's anything coming up number three is to attend City Council meetings and join Local Host groups this is a great way to stay informed about any changes to local laws and also connect with other hosts who have navigated these issues number four is consider hiring a lawyer who specializes in short-term rental regulations they can help you interpret complex legal lease and also ensure that you're fully compliant number five look at Market that have made up their mind on short-term rentals so for example they require permitting

6:25 this is actually a great way to protect your Airbnb for more competition coming in as it creates more friction from Supply hitting your market and number six once you have all the necessary permits make sure you're following all the rules this could include things like collecting and remitting occupancy taxes posting your perit number on your listing and also adhering to your occupancy limits the fourth setback is managing multiple properties and scaling the key here is to make sure you set a solid foundation from the jump from our very first property we set up the systems processes and Technology to ensure that we could scale properly however we did run into some hiccups along the way like calor not sing correctly this led to double bookings or cleaners not getting notified when a guest checked out so the next guest would arrive to a dirty home but it's all about ironing out these Kings for both your on the ground team and also your back office Tech as my business grew I found myself drowning in the details like over bookings cleaning mishaps you name it I had to learn to create these systems and processes to keep everything running smoothly and if you're planning to scale be prepared for the challenges that come with growth it's not just about buying more properties it's about managing them effectively number one create standard operating procedures or Sops for every aspect of your business this could include cleaning checklist step St bystep guides for handling bookings and guest communication and having protocols for maintenance and repairs having these systems in place will ensure consistency and make sure that it's easier to train new team members as you grow invest into technology to automate and streamline

7:41 your operations I use tools like guesty for centralized booking management price last for dynamic pricing and properly for Cleaning Management these tools save me countless hours and help me prevent costly mistakes building a reliable team as you scale is going to be the most important thing so you're going to have your cleaners handyman movers for each property you're going to want to vet them very carefully and provide them thorough trading and communicating regularly to ensure everyone is aligned a key note I want to mention here is adding a virtual assistant to keep everyone and everything in place for example I have two virtual assistants who I pay $600 per month each VA number one handles all the day-to-day stuff like communicating with guests coordinating cleanings and repairs you name it virtual system number two is more of a big picture thinker they focus on optimizing our listings adjusting our prices based on demand and automating as much of the process as possible and the thing here is to not to grow too fast it can be tempting to want to add more and more properties but growing too quickly can lead to Quality Control issues and also burnout I recommend mastering the systems and processes for just a couple properties before you gradually start adding more and that's exactly what I did number five is adapting to Market changes and competition for one of our first properties we designed it well and had some great amenities but as more listings popped up in the area we knew we had to keep reinvesting to stay competitive so we added a mini golf area a hot tub streight lights to the backyards for guests to enjoy those additional amenities helped us increase revenue and stay booked even as the competition grew here's how you can say

8:57 ahead of the game number one you want to conduct condu regular market research at least once a month I analyze my competition on Airbnb and other platforms I look at their prices their amenities and reviews to see how I stack up and identify areas for improvement number two stay informed about local events and Trends I subscribe to local tourism board newsletters and also follow City Event Calenders this helps me anticipate spikes in demand and also adjust my pricing and marketing accordingly for example if there's a big conference coming to town I'll make sure my listing highlights my properties proximity to the conference center number three is differentiate your property I'm always looking for ways to make my listing stand out and the goal here is to offer something your competitors don't and number four encourage and leverage guest reviews reviews are crucial for building trust and attracting new guests I make sure to provide exceptional service and then kindly ask guests to leave a review I also use positive reviews in my marketing highlighting quotes about our cleanliness and also great location and of course our unique amenities and that's it if you got value from this video then you're going to love my 30-minute free training in there I break down step bystep how to set up your first profitable Airbnb how to find profitable markets how to talk to landlord to they suas their properties how to send from your competition how to manage it for no more than 30 minutes per week and most importantly how to set up an Airbnb completely remote without having to buy it if you're interested the link is in the description anyway running an airb business is not for the faint of heart okay you're going to face setbacks and there's always going to be days where you question if it's all

10:13 worth it but if you can learn from these setbacks and if you can adapt the rewards will be tremendous remember every challenge is an opportunity to learn and improve embrace them and use them to make your business stronger and as always always keep your eye on the big picture if you found this video helpful make sure you like And subscribe for this video I'm going to put out more content like this to give you actionable steps to build your air beam Empire and also your real estate Empire and become financially free and remember every setback is a setup for a comeback so with that being said we'll see you in the next episode