I PUT ALL MY MONEY INTO AIRBNB
There was a month that I spent every last dollar of money I had on doubling down in my Airbnb business. I didn’t have enough money to pay my rent the next month. There are some scary facts I’m going to share with you so, in a similar scenario, you don't lose your cool. After all, this is all about not losing your cool because you could do so many awesome things if you can just do risky stuff and stay chill.
The facts
The first day of this month in question, I had $28,000 in pre bookings on Airbnb for the entire rest of that month. My rents for that month alone were $73,000. At the same time, I was still setting up properties within the first seven days of that month, so I had extra expenses still going into my Airbnb property (like another fifteen hundred dollars into furniture and stuff for these two that I’m doing in Fort Worth). Not only did I spend every last dollar I made the prior month, I was still spending some of what I made that coming month on the properties that I set up coming into that month. I was coming in with “negative money.” I had just put all of my liquid capital into my Airbnb properties.
Here’s why I was not all messed up about the fact that I was fifty thousand dollars short for rent. Here's a way to look at it. It was the 7th of August and my Airbnb account said we had something like forty-eight thousand dollars in bookings when day one it was twenty eight thousand dollars. That's twenty thousand dollars in new bookings in the first seven days, about three thousand dollars a day in new bookings. Projecting hat trend for the rest of the month that calculates at another 50 to 60 thousand dollars in revenue and that puts us at around ninety-eight thousand dollars in incomes right there. Rent was 73 and incomes 98.
It doesn't really end there. We had new properties being activated. Four of them that didn’t (on the 7th of august) have any bookings yet that are coming live, which means final revenues for august will likely be at like 105 to 112 thousand dollars by the end of the month. That doesn't also include the fact that someone at the end of the month like on the 25th could book a month long or longer stay which we get a lot of these and give us an extra two to five maybe a grand of revenue that belongs to September that will get paid on in August.
Another thing that goes in favor on this business. Let’s imagine you now, your rent is due on the third. If your auto debits are set on the second, they're going to pull money on the third. Know that Airbnb pays out 24hours after someone checks in so people who check in on the first or second you'll get paid on the third.Wow, right? If you pay your rents through a manual check and you drop it on the third and it takes a couple days for the bank to clear it you might not even pay your rent by the fifth. Think about it like that; even thoughI came in the month with $28,000 in bookings and seventy-three thousand dollars in rents that I owed I’mwasn’t worried about it.
Managing your finances is the key to taking calculated risks and doing things that make your friends shat themselves while you're sitting back rolling in the dough because you're the boss that built a huge Airbnbbusiness the smart and fast way. (if you can do both at the same time)
