All Forum Posts by: Matt Ayoub

@Kathleen McCabe we knew a realtor on the ground. Went for a short vacation and spent a couple of days viewing properties meeting our criteria. Found a couple of viable options. One was at a massive discount due to hurricane damage. Sent a few low ball offers. One was accepted and moved on it from there. Days on market is generally way higher than what we see in USA mainly due to absence of financing and limited cash buyers. 

@Kathleen McCabe hi there. I have an up and running vacation rental in San Jose del Cabo. It’s a 3 bedroom house + casita, pool, and meditation gardens in a community near the Palmilla One and Only. I market it on Airbnb and Homeaway and have good traction. In my case I give a local property manager 10% of revenue to manage it and receive guests on my behalf. If you have any specific questions feel free to let me know. 

@Julie McCoy fully agree with all your advice. Absolutely no need to over complicate at this stage. One question - can you clarify how your housekeeper downloads / syncs with the booking calendars? Thanks!

Hotels are major investments so I think it’s a good sign that they have run the numbers and see the potential. More hotels mean more volume means more opportunities to attract Airbnb guests. 

I don’t really see myself competing with hotels anymore - more so differentiating my vacation rental against the competition. The beauty of Airbnb is providing an option for people or groups that prefer a furnished apartment or house over a hotel or multiple hotel rooms. This trend is exploding. I no longer stay in hotels when vacationing with my family - $10 bottles of water and a cramped room - no thank you. And my guests have realized that 5 couples paying $100 / each a night for a private villa makes much much more sense than 5 hotel rooms each one at $500 / night... not to mention private pool, bbq, and cooler full of beer. I do require a 3 night minimum and have plenty of 1 week stays so agree with other posters to do your research on competitor occupancy and rates.

The real question is can you provide a compelling alternative value proposition to these hotels... eg short walk to beach, beautiful view, tranquility, well equipped kitchen, more space, pet friendly, much cheaper, etc. 

I am currently on the sidelines but then again I live in Southern California where property hasn’t cash flowed in years and invest out of country vs OOS. If rates go up meaningfully or the stock markets plummet I think it’s likely we will see some buying opportunities. 

But with the economy doing well and mortgage standards tightened we are unlikely to see a major drop. I am now seeking investments outside of real estate to balance my portfolio. Real estate is ultimately local, so if there are opportunities where the numbers pencil out and you have a longer term horizon I would not hesitate too much. But in most major metro markets I would not count on much short term capital appreciation at this stage.

Maybe it is less visible on Airbnb however Verbo / HomeAway also charge a large annual membership fee (optional but a no brainer if you have higher volumes).

I like the idea - my main advice would be to try to design it to maximize guest count, eg at least 2 vs 1 person comfortably. That way couples are in play. 

It does frustrate me how homeaway / verbs nickel and dimes credit card and foreign transaction fees in your final payout. Another aspect of the hosting experience that falls short relative to Airbnb.

I don’t think managing an Airbnb is difficult at all. I never managed any type of rental previously and now within 2 years have a property grossing over 100k a year with more than 50 5 star reviews. This assumes you have done your market research and selected a property with potential to meet your financial targets. A few tips:

1. If it’s a remote property you need a good PM or a Maid++ and a reliable handyman. Ability to turn the property spotless and respond to guest concerns is key. I give my PM 10 percent and she manages bills, maid, gardener, handyman, etc. Of course this can all be done yourself depending on your time and circumstances.

2. You should have no problem handling the front end yourself - creating your listing, responding to enquiries, closing bookings, etc. The Airbnb app makes everything very easy and you can benchmark descriptions against other listings. One key is a professional photographer.

3. List on multiple channels. I saw great revenue initially from Homeaway and you don’t want all your eggs in one basket

4. Penetration pricing - get traction with early bookings at low prices, gain credibility with 5 star reviews, and improve pricing / profitability from there.

5. Apply a little hosting love. Send a welcome email to ensure everything is as expected. Flowers. Thank them when they leave. 

6. Most guests are wonderful. Some leave the place a mess. About 5 percent or less are just not nice people. 

7. It’s a numbers game. Don’t get emotionally attached to the property and find the balance you are comfortable with regarding pricing and occupancy.

Hope this helps.

Matt

@JD Martin in an ideal scenario I would continue to work another ten years into my early 50s helping my first 2 get through college. 

Returns aside, I have zero interest in managing / owning 20 doors generating 2-300 dollars a door. I don’t want the hands on stress and in my experience the middlemen, especially in remote set ups quickly eat into your margins. Plus I think the opportunities of the past few years are not what they were.

Attraction to high priced real estate? Well mainly to live in and for my kids to live in in the future. The price of entry in coastal Southern California is becoming unattainable. Our house suits multigenerational living and if my kids decide to base themselves there I think it will help greatly in positioning themselves to save and own their own homes one day... as well perhaps helping us out a bit as we age. But longer term it’s the lower cost of living well overseas that attracts me. I’ll plan to add a couple more properties to balance our risk and provide some additional cash flow.

Thanks for the comments and suggestions everyone!