Airbnb, Short-Term Rental Landlord, Passive Income Becomes Active Income, Real Estate for Physicians

This is What It’s Like to Be a Short-Term Rental Landlord

A good friend of mine, Dr. Dave Draghinas, is a Frisco-based anesthesiologist who finds himself plunging into the many facets of physician side-gigs. He hosts his own podcast called Doctors Unbound to bring incredible “unbound” physician stories to the limelight. A side-gig of his, subsequently a passive income stream, is managing short-term rentals using the Airbnb platform. Are you curious about being a short-term rental landlord? Check out Dr. Dave’s top tips for doing Airbnb the right way for more passive (and potentially active) income.

For blasts of inspiring stories that will keep you motivated to achieve more, be sure to subscribe to the Doctors Unbound Podcast on iTunes or Google Play.

For a direct link to Dr. Dave’s charming rental on Airbnb, click here.

Do you know what it’s like to be a short-term rental landlord?

Being a short-term rental landlord has many benefits and it has this money nerd all sorts of excited. For this episode, we discuss exactly what physicians need to do to run a successful short-term rental that will almost guarantee you more money in your pocket!

With Airbnb being a worldwide open platform standing independently at $30 billion dollars, it helps physicians appeal to the platform’s customer base bringing in more side-income. Who doesn’t like more money?! Listing your rental on Airbnb has its perks, so let yourself be the receiving end. List your rental, but first, listen to Dr. Dave’s expert tips!

What You Will Learn:

  • Using Airbnb guarantees you a solid platform to market your rental.
  • Consider these things before becoming a host on Airbnb, including what your time-commitment could potentially be.
  • Get more from your return with a single-family home than with a traditional rental.
  • The Airbnb app helps a short-term rental landlord gauge other rental homes, price points, schedules, and calendars.
  • Good communication skills are important when potential renters inquire.
  • Be a data-driven landlord by using a paid software called AirDNA to help you accurately estimate the returns of Airbnb rental properties across the United States.
  • Being a short-term rental landlord can help you pay the bills during seasonality rhythms.
  • Compare your listing and price points against competitor data as a short-term rental landlord by knowing your market.
  • What the furnishing costs look like when you focus on your target renter.
  • Elicit a professional photographer to improve the aesthetics of your ad on Airbnb (and accentuate your home’s best features).
  • Bring your costs down as you furnish your rental home by being creative.
  • Presentation and thought-fullness go a long way for good review.
  • Avoid a bad review from a pissed off guest by doing this one little thing.
  • This recourse option can be used for a bad guest experience, including a high deposit that might self-select your renters.

Don’t Forget to Add to Your Toolbox, Get Involved and Help. Here’s how:

If you enjoyed this episode, I’m sure you would enjoy reading this: Should You Rent or Buy Your Home in Residency?

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Full Transcript: This is What’s It’s Like to be a Short-Term Rental Landlord

Ryan

Well, David, thank you so much for being on the show, I’m really excited to have you here.

Dr. Dave

Thank you for having me on. I’m excited to share some interesting conversation here with your guests.

Ryan

Of course. So, David and I talk a lot on some various other things, and as we’re chatting on one day, we talked about Airbnb and David is like an expert on Airbnb. He’s got a unit that he does. He been doing it for a while and I was like we need to talk about this on the show. So, excited to kind of jump right in. I have several long-term rentals that I manage or actually have a property manager that helps me with it. I was doing long distance and now I’m obviously in town, but not doing it, and I’ve never, ever, jumped into this Airbnb scene. So, I’m curious, like, you know, what are your thoughts on it? What are some things to consider before becoming a host on Airbnb?

How you can get more from your return with a single-family home than with a traditional rental.

Dr. Dave

Yeah. So, I started reading a lot about Airbnb. Of course, it’s kind of in the national consciousness, maybe internationally even, with the share economy. So, I had read a lot of things about it. We have this home that was a rental, single-family home, and I was interested in seeing if we could get more of a return than with the traditional rental. So, that was kind of the initial impetus. I kind of started learning more about Airbnb. I would say some things to consider because this is a little bit more hands-on, is, are you interested in interacting with people? Because it is more hands-on, unless you get a property management company to do that for you. So, that would be number one consideration.

Short-term rental landlord for physicians

The Airbnb app is intuitive enough to help you gauge other rental homes, price points, schedules, and calendars.

Dr. Dave

And then number two, if you are, then I would suggest maybe doing a little bit of reading on Airbnb, but jump on the app. And if you already have a home that you’re considering, you know, you can jump on the app, the Airbnb app, and take a look. And take a look and see what kind of homes are being offered, you know, what the price points are, what the schedules look like, what the calendars look like, are they full, are they not, and get a feel for it.

Ryan

So, I know it takes a lot of time, right, to kind of jump into this, or at least that’s my initial kind of expectation. And maybe this is my hurdle and my bias, if you will, towards Airbnb. I feel like there’s a lot of time to turn over, to get things booked, to kind of dig through the app, to find out what things are. Like, how much, kind of, of a time commitment, if I decided to pull one of my long-term rentals off, I think I’ve got one that’s coming in August, off of a long-term year lease, I’ve just decided, you know what, let’s try Airbnb for six months, like what am I really committing to at that point, I guess?

Dr. Dave

So, I would say, you know, your time commitment is going to be kind of two-fold. Number one, there’s going to be certainly a learning curve, just like there is with anything. So, your time commitment, in the beginning, is going to be higher, because you’re learning a completely new business model. So, you’re going to have to learn the app, you’re going to have to learn pricing strategies, you’re going to have to learn how to best furnish your home, things of that nature. So, I would say, you know, there’s initially a learning curve and then from there, yes, it’s going to be a little bit more time intensive than a traditional rental, but I guess it depends on your perspective.

Dr. Dave

You know, my wife and her family, and my wife is very involved, she’s the one who runs it mostly and I help out on the side, but she comes from a background of caring for and running an assisted living facility; and that is twenty-four, seven, three sixty-five; dealing with seniors and their families. So, when she went from that to Airbnb, she’s like gosh, this is cake. So, it just, it depends on what your frame of reference is. So, definitely way less intensive than that, but more intensive than a traditional rental and I think, you know, having the perspective of higher returns, you know, that’s what you have to balance out.

What do you need to do from a management perspective to manage an Airbnb?

Ryan

Yeah, that makes total sense. You know, I know that you’re a very successful physician. I don’t know who listening knows of your story or not, but, you know, we’ll make sure we get into a little bit of that. And I was curious, like, how are you doing with all the work you’re doing and on call and all these things alongside of basically Airbnb and doing this? So, it makes sense that your wife is kind of stepping in and helping at least some of the management tasks, but, you know, what are maybe some of those management tasks that you’re referring to? I know it’s not as crazy as what an assisted living place would be doing, but, you know, what are some of maybe the, just from a high level, what is she doing from a management perspective?

Dr. Dave

Sure. So, the first thing that you’re going to do is, you’re going to communicate with a potential guest. So, you know, you’re going to get inquiries about, you know, through the Airbnb app and people will have questions about your place. Now, interestingly, Airbnb rewards you for communicating quickly. So, typically, they say about an hour response time is what you want to shoot for. So, sometimes, even a quick message like, you know, we’ll get you more information soon. Just basically having a response is rewarded. But, basically, you’re communicating with the guests. I mean, if you think about it, I mean, you’re a bit of a salesperson. Right? You want to tell them about your place, you know, in an honest way, but you also want to, you know, get the booking. So, good communication skills are definitely key there.

The day and the life of a short-term rental landlord involve adding cleaning fees to your nightly bookings.

Ryan

Yeah. So, what else, like, you know, I’ve only stayed in, I think, Airbnb two or three times, so I actually don’t, this is something like from a real-estate perspective. I really am curious on, you know, how do you turn over units? What is that from a management perspective, you know, in between bookings? Like, how quick can you book them? You know, what is it in the day and the life of someone who manages this type of rental?

Dr. Dave

Sure. So, basically in between bookings, you are going to clean and turn over the place. So, there is a cleaning fee that you charge in addition to your nightly bookings to help with that. I think, probably, most people will have a cleaning crew. So, that adds another layer to your management. So, you definitely need to turn over the place. Make sure, you know, it looks good, it’s clean. So, that comes into it. I think, kind of like, you know, at a hotel, most Airbnb homes will have a checkout of 10:00 or 11:00 AM, and a check-in of somewhere around 4:00 PM. And the reason for that is you need that time to turn over your unit.

An Airbnb is like a replacement for a hotel.

Ryan

Yeah, makes sense. I mean, it really is a replacement for a hotel, and, you know, so, all these questions are kind of popping up in my head here. So, like, from a financial standpoint, how do I know how much the house is going to be rented for? You know, if I look at it from a long-term rental standpoint, you know, my house rents for fifteen hundred dollars a month, and if I break that down, it’s fifty bucks a day. But, you know, comparing it to a hotel model where they jack up the prices on a weekend, you know, how does that fluctuate with Airbnb? Do you jump in and change the prices all the time? Like, where do you start, basically, from that?

AirDNA used by short-term rental landlords

Dr. Dave

Sure. So, what I would recommend is, if you’re really serious about giving this a closer look, there’s a software called AirDNA, AirDNA. Now, it is a paid software. It charges you twenty-nine dollars a month, cancel anytime. I am not an affiliate, so I’m not promoting anything that I’m getting a kickback for, but we used it and I actually still have a subscription to this software. I felt it was a worthwhile investment, because I had a home that I was considering doing this type of business with, and I could input details about my home; specific details about the neighborhood; you know, zip code; information about how many bedrooms and bathrooms the home would have. And then, they really give you a breakdown of, you know, what your average daily rate would be; how it varies by season.

Dr. Dave

Really, pretty good date to give you an idea of what you can make with your Airbnb rental, and even breaking it down, you know, for a daily rate and then, you know, monthly what you can expect to make, because there is, depending on your market, there can be some seasonality, you know, to what your Airbnb makes.

Seasonality and local events make a big difference in how to price a rental.

Ryan

So, seasonality, I mean, obviously changes, you know, Summer, you know, in San Diego is going to rent for more than Winter in San Diego, but, well, maybe not. I don’t know how that seasonality technically works, but I can imagine, like, you know, just, when we were in college, you’d go down to Mission Beach and during the nine months of the school year, we could rent something for two thousand a month, you know, and share it between, like, four guys, and then, you know, Summer comes around and it’s two thousand a week and, you know, well, I know how they’re making all their money. And, you know, we’re just essentially, kind of, you know, paying their bills during the year. But, you know, for Airbnb, not only seasonality, but like, does the, I’m assuming, and correct me if I’m wrong, but like, even weekend pricing, or maybe what’s in town, you know, maybe there’s a big concert or something, I don’t know.

Dr. Dave

Absolutely. Those things make a big impact on it and it’s, basically, your local market. So, that’s why I like that AirDNA software, because I can really break it down, but some other things to consider, if there are any hotels nearby in your city, jump on their, jump on the hotel’s website and start playing with the bookings. Start playing with the reservations and check out what, you know, what the hotel is renting the room for during the week, during the weekend. You’re typically going to see a jump in the weekend and then also, like you said, either get a calendar of, you know, local events, or, you know, you can probably use the hotel, the hotel software in this way as well, because they have invested thousands and thousands of dollars to, you know, predict their price algorithm there. So, you can utilize it. But, like you said, there’s definitely variations according to season, according to weekday or weekend, and then, of course, when there are events happening, you know, that’s going to impact it as well.

Local sporting events and the right supply and demand affect prices, as well.

Dr. Dave

So, I’m in a north Dallas suburb here and, in Frisco, Texas; and we have tons of sporting activities here. So, if there is a sporting event, like there is, I think they have the Division II National Championship that they’ve started doing here. There are concerts. There’s a, you know, local Dallas MLS plays here. So, there are all these activities that can impact it. I think they’ve even added a conference tournament for, like, one of these, like, mid-major, you know, college basketball tournaments. So, there’s all this stuff that’s changing. Get a calendar from your city or from the nearby cities and get a sense of what’s going on, because that’s going to affect, right, supply and demand; and it’ll affect your prices.

Ryan

Yeah, and I think that’s fascinating that there’s something like a third-party software like Air, was it DNA?

Dr. Dave

AirDNA. Just the letters DNA.

Ryan

Oh perfect, we’re talking to a bunch of physicians, so, AirDNA, right? That has popped up to support, you know, Airbnb. You know, I think that’s fascinating that they’ve created something that’s even better than what Airbnb is really providing on their platform. And, you know, comparing to your competitors, I guess, again, you know, know your market and, you know, before you kind of jump into all this, make sure you know what your local market can support and maybe go through and look at some of the listings and see what your competitors are going to do and they are doing. I love the idea of looking at what hotels do. I mean, they spend not just thousands, they spend hundreds of thousands, if not millions of dollars, on all their software.

Ryan

You know, I don’t like copying competitors. I always believe that you need to be yourself and unique and be better than everyone else, you know, for you to earn the business; except for when your competitor spends millions of dollars trying to create some software, you know. Then you can kind of piggyback on what they’re doing. But still, you know, be yourself, be better than them.

Pricing is more like a science than an art—just stick to the trends.

Dr. Dave

Well, you’re using it just to see trends. Right? Because, you know, your listing is not going to be exactly what a hotel room is. You know, you’re home has different benefits, features and things that, you know, guests will find worthy of booking for. But, you know, you use it to see trends and to know how you can adjust your pricing.

Ryan

 

That makes total sense and what works in your area. Right? A little suburb outside of Dallas does not work for my area. Right? And I live in Las Vegas, so we’ve literally got forty. What was it? Forty-two million people a year come visit Las Vegas. And, you know, there’s events and concerts and sporting events and, you know, conventions and all sorts of things here at all times. So, I don’t know how much that affects, maybe like when CS is here and it’s like a ton of people for that convention, it might make a big difference, but just again, know your market. I think that’s really great advice. So, coming from the long-term rental, right, because this is where I kind of live, in this area of long-term rental versus short-term; I don’t have any furnishings or anything like that in my rentals. I make sure that the carpet’s nice and it’s painted and, you know, the fridge and microwave and all that stuff works, but I don’t have couches and TV’s and things. So, what do you kind of put into these rentals? I mean, maybe if it was, or is, your house, your current house, that ’s very, very different, but what would you put into these rentals from a furnishing standpoint?

Dr. Dave

Sure, absolutely. So, you’re definitely going to have to furnish them. So, there’s going to be a cost with that. Unless you are like a guru of home decorating, some basic sort of principles to follow and, I forget where I read this, but basically the advice was classic décor in a clean space that’s clutter free. And I think that just hits it. Classic décor in a clean space that’s clutter-free. Think of the photo aesthetics first. So, don’t spend thousands of dollars on the most comfortable Tempur Pedic mattress, you know, get a good mattress, but think of the aesthetics of the picture in the room first and then that comfort second, and obviously, you’re not going to put the most expensive mattress in there.

Prim your rental space to increase the amount you charge.

Dr. Dave

The other things to consider, is to maximize your beds, because you can think of it as the cost of your home per pillow. So, the more beds, the more people you can sleep in it, theoretically, the higher you can charge. So, things like sofa sleepers that pull out in the living room. You know, if you have a master, you probably want a good king-size bed, because that’s what people are looking for. And then, as many beds as you can get into, you know, the other bedrooms, assuming you have multiple bedrooms. You know, bunk beds or, you know, you know, you know, full beds that you can either have apart for kids or pull, you know, bring together to accompany, you know, multiple couples, things like that. Basically, think of the beds that you can put into the home, because that will increase the amount you can charge.

Ryan

That’s crazy to think about, because I, you know, from the flip side of this, I’m thinking, you know, I have a three bedroom, two bath place and all this, like, I’m not trying to force six beds or seven beds or whatever it is into that and charge more money on a long-term rental, because that’s not how people want to live long-term. Right? But the pricing is the exact opposite, which is, I mean, honestly, I find it fascinating, because I never really thought about it that way. And, you know, you’re talking about don’t buy the nicest bed and don’t do this, but you do have to have some comfort there; otherwise, they’re going to probably going to leave you a crazy or nasty review. Right?

Dr. Dave

Absolutely.

Keep your décor appealing to the target renter, but also keep your wits about the budget.

Ryan

So, do you get like, I mean, stuff at like, IKEA; and you just kind of furnish it with IKEA stuff or does it need to be nicer than that, I mean, I mean, I look at what we have and it’s like half our stuff is probably IKEA, so I don’t know. I would furnish a place for Airbnb with nicer than what I currently live with, but I’m just curious from someone who does this.

Dr. Dave

Yeah. I mean, I think IKEA level is reasonable. I think we’ve got, you know, one of these Tempur Pedic-type mattress, not in every bed, but I think in a couple of the beds, because we, some of the furniture we already had was in great condition and some we added to finish out the home. And I think we added, like, you know, one of these Tempur Pedic-type mattresses, but it wasn’t that brand. It was something that, you know, could have been on sale, but had good reviews. So, you know, it gives you a chance to be a bargain hunter. Right? Some people, I think, you know; although, I haven’t utilized Craigslist or things like that. Some people look out for deals, maybe not for, you know, obviously not for a mattress or, you know, beds, but, you know, for some of the other décor.

Dr. Dave

There are ways that you can be creative to bring your costs down. To give you an example, I know we went, when we were initially furnishing a home, I think we went to Ashley Furniture. You know, I found a salesman there and, you know, we knew that we were going to be purchasing, you know, a decent amount of furniture. I think we were like somewhere in the 5k range and we were able to negotiate with them. It was like, okay, they had some sales going on. I said, okay, if I do a big purchase, what else can you give me? What else can you give me? So, you know, you use your negotiation skills and, you know, you figure out ways to get value. Right? You don’t want something that’s going to break down easily, because it’s going to get used. You’re looking for that value.

As a short-term rental landlord, it is your job to ensure the details of your listing do your rental justice.

Ryan

It’s funny, because as we’re kind of going through the conversation here, and it didn’t really occur to me until literally like right now, is, this is kind of a lot like eBay, but it’s like, for a house. You know, like, I’m assuming, you know, pictures matter, you know, in the listing, the details of the listing matter. You know, and then, you’ve got basically the reviews, I’m assuming, you know, please maybe elaborate into this, but I’m assuming you need to have good reviews or no one’s going to want to stay at your place. So, you know, similar to eBay with their, you know, I’ve got a hundred percent, you know, five-star feedback kind of thing. You know, on Airbnb, I’m assuming that’s a big deal. Right?

Dr. Dave

Reviews are a big deal and having, you know, negative or low reviews can really ding your listing and affect you. Fortunately, we haven’t had anything like that and I think there are some things you can do to help you along the way. So, number one, you know, for the, you know, for the first however long, my wife would go and meet every guest that checked in, especially when we first started. And being able, and part of this is just her, like she’s a great host. She loves to serve and host and make people feel welcome. It’s just in her nature. So, I think just that warmth would come through and she’d be able to like almost tour the home for them and say hey, here’s the house; and people really love a clean home. So, that’s the first thing they would notice.

Dr. Dave

Like, oh man, this is really clean; oh, this is really nice. So, that initial presentation, like you said, investing in something that’s pretty nice and clean is huge. And then if you can do that, at least in the beginning when you get your first couple reviews, is to kind of tour the home and show them. You make them feel welcome. You could show them, like, we had a little, you know, house rule/guidebook prepared that kind of showed them, you know, how do you work the TV, what’s the Wi-Fi password? We included things like, you know, what are our favorite restaurants in the area, important emergency numbers. You know, stuff of that nature that shows that you’ve been thoughtful; and I think that goes a long way. I personally believe that if you do that personal welcome, now you can’t always do that, I think it actually encourages people to take better care of your stuff.

When you personalize the experience for a renter, you increase the likelihood of them taking care of your stuff.

Dr. Dave

This is going, this is going, and my thought process is going way back to when I was like in college and I worked, I worked for, like, Miller’s Outpost, one of these, you know, clothing companies; and I remember, we had these greeters at the front of the door. And your only job as a greeter was to look at everybody come in, try and make eye contact and say welcome or hello or something like that. And I remember thinking to myself, like, why do, why do they do that. But they do that, because the data shows that if you make eye contact, it decreases theft.

Ryan

Really?

Dr. Dave

Yeah. So, that’s my philosophy is that, you know, when people can put that home to a name and a face and a person, it personalizes it, and hopefully, people will take better care of your stuff. We found that by in large, people who, you know, who, you know, utilize Airbnb, are great guests. We’ve now used, you know, Airbnb on our vacations multiple times; and, you know, you treat the place like it’s somebody’s home. And I think, by in large, that’s the case. You’re going to have some bad experiences, you know, pretty rarely here and there, but, by in large, people usually treat the place pretty well.

Ryan

So, if reviews are kind of a big deal, I’m really thinking like feedback in terms of eBay. You know, how do you deal with guests that are pissed off? Or, and, maybe you’re just such an awesome host, you don’t have it, but if someone was super pissed or, you know, I mean obviously the happy ones, it’s easy, we know, but I’m curious, like, how would you kind of deal with, with that?

Take time to pay attention to the details personalizing a renter’s experience.

Dr. Dave

So, one thing you can do is, shortly after they leave, you can send them a personal note and say hey, you know, I really strive to take great care of my guests and take pride in my rental. If there’s anything that wasn’t to your satisfaction, I would appreciate you telling me privately so that I can fix it for the next guests. So, you can take that angle. And the other thing is, if, I believe if a guest, if you do not review the guest, then I don’t think that their review shows up on your profile. So, let’s say there was just, because we haven’t had that experience of an angry guest. People pretty much love our place, but we have had like one or two bad experiences where the person kind of trashed our place. Nothing like big broken, but like left it in like really rough like dirty shape, you know. So, then our question was like how do we handle this? Because if we review this person and give them a negative review, well then, you know, they’re going to negatively review us and drive our listing down. So, we’ve chosen to not review those guests. And, so then, that kind of just, like okay, you know what, we’re going to cut our losses, you know, we’re not going to rent to you in the future and we’ll just kind of, you know, go our separate ways.

Ryan

How does Airbnb protect you in that sense? Like, what if someone just came in and just destroyed your place and caused a bunch of damage?

Dr. Dave

So, they have a, you know, they have a million dollar, you know, insurance policy, but I believe that kicks in after your personal insurance policy has been exhausted.

Ryan

And that’s the only, that’s the only recourse? You can’t, there’s not like, you know, when you, have you seen it on the little app, and it’s funny that I maybe notice this, but maybe it’s the weirdo in me, but like if you got sick and you took an Uber and you like threw up in the car or something, like, they charge you a cleaning fee and you have this whole like procedure. Like, does Airbnb have that kind of procedure if anyone, like, destroys a bunch of stuff in your house?

Potential recourse options for a bad guest experience, including a high deposit that might self-select your renters.

Dr. Dave

Sure. So, let me just add one other thing and you can have a deposit in there and we, and we, you know, some of these, you know, some of these, you know, websites that, you know, talk about Airbnb and teach you about it and what not, some of them say don’t have a deposit because it decreases your bookings. Well, we have, I think, it’s a five-hundred-dollar deposit, which is, you know, fairly high. And, we have no intention of removing it. We have plenty of bookings and we feel like it gives us a little bit of a buffer there; and I also think, you know, if anything, it may even have the guests self-select themselves. So, if you’re looking at it, and you know, that booking fee is looking like, you know, it’s too high for you, then maybe you’re not the right fit for our home.

Dr. Dave

So, that gives you some level of protection. You know, we’re talking mostly about Airbnb today. We also have the home listed on VRBO and I will say that Airbnb’s customer service, while, not like amazing, is way better than what we’ve experienced with other platforms.

Ryan

And how important is it to be on those other platforms?

Dr. Dave

You know, I think Airbnb is definitely the dominant player. We added VRBO/Home Away to, you know, sort of help get our home full of bookings. I would say we still get a few from VRBO, but I will say this…Airbnb’s platform, their app, the flexibility of what you can do with the schedule for a host is so much better; and then, even calling in and utilizing their customer service is so much better than what we’ve seen from the competition.

Airbnb continues to be the biggest and best short-term rental platform.

Ryan

Interesting. Okay. Yeah, I mean, you know, there’s going to be competitors popping up here and there and, you know, I think that’s fascinating that the biggest and best one still has been the biggest and best one.

Dr. Dave

Well, I think, I think that’s, I think that’s why they’re, you know, that’s why they’re the biggest and I think that’s why they’re, they’re continuing to dominate, because, you know, because of their app and because of behind the scenes, you know, the customer service.

Ryan

So, you don’t have to talk actual dollar amounts here, but I’m curious. Like, what do they charge to, do they charge you to list it on the platform like eBay does? Or, is it you list it for free and they take a percentage of rents that flow through?

Dr. Dave

So, Airbnb. Yeah. So, Airbnb’s fees, they do a host fee and then they do like a guest fee. So, they’ll take a cut from ours; and I think that’s around three percent, the host fee. And then, they’ll also charge a guest fee, something on top of that; and that ranges from six to twelve percent, depending on the dollar amount of their booking. So, the bigger dollar amount booking, they’ll charge the lower end of that percentage; and obviously, you know, vice versa.

Clean, classy and clutter free business center for your Airbnb

The Airbnb platform is highly intuitive and is pretty functional.

Ryan

Got it. Okay. That makes sense and that’s pretty affordable from a host standpoint. Guests, I mean, maybe it’s taxes or something like equivalent, but that makes sense.

Dr. Dave

Well, when you consider, you know, the amount the, you know, the traffic, if you want to think of it just from a marketing standpoint, that it, that it sends your way, you know, and the functionality of their app, I mean, it’s pretty amazing, you know, what they’ve been able to do.

Ryan

Yeah. So, you know, when we’re looking at listings, I know there’s and I almost hate to keep saying eBay on this, but, you know, I know that when I craft listings and do all these things, that there’s some little tips and tricks for that. Is there a way to kind of not game the system, but, you know, maybe that you do certain pictures a certain way or phrase something a certain way? Is there things that you can do to kind of make your listings pop?

Dr. Dave

I think so. And I think the very first thing, so I don’t have any background in eBay. I never was really on the platform, but, you know, if you understand anything about marketing, I think you need to treat your listing as if it’s an ad. So, the first part, beautiful pictures. When you scroll through the app, the Airbnb app, you’re going to see, you know, one of your pictures, like your lead picture, and then there’s going to be a headline underneath. So, if there’s one tip I can give you, is invest in professional photography. We started off, you know, cause we needed to get the house up and listed with just, you know, kind of iPhone pictures; and even though, you know, my wife is pretty good at taking those pictures, you just cannot compete with the professional photographer that’s got the proper lighting, that knows how to use the proper angles, looking, you know, down, you know, a long angle down at a property. It makes a huge difference. I think professional pictures for a standard, you know, three or four-bedroom home, you know, twenty pictures or so, will run you maybe two to three hundred dollars, depending on your market.

Show the best elements of your home by taking good pictures for your Airbnb “ad.”

Dr. Dave

It’s a worthwhile investment. Get professional pictures done and then there’s even, I think, some kind of thought process behind what should be your lead picture. That’s the one that people are going to see first when they scroll through the app before they click on your listing. We have a picture from inside our home, which is kind of like the living room looking onto the kitchen; and it’s a very nice picture, very long broad view that gives you a really good picture of the main entertaining space of the home. I think, unless your property has some amazing outside feature that you’re trying to highlight, like, let’s say you’re an ocean view or a lake view or something important like that, I think having an interior picture like that is a better option.

Dr. Dave

There’s so much low competition out there. Like, I was just looking today in my market, most of the homes are like showing you the, you know, the first picture is just a picture of the front exterior of the home. It’s like, why do I care? Why do I care that the brick is red, you know? It doesn’t really add a whole lot. So, that’s the first thing I would say, is invest in beautiful pictures and think about what that lead picture, because really that’s an ad, you’re trying to get people to click on your listing, you know, think about what you want that to be. The second part, would be an eye-catching headline. So, you know, eye-catching, there’s a little bit of SEO in there. So, you know, so ours is something like clean and charming, you know, name your city retreat, you know.

Dr. Dave

And then we have, you know, in parentheses, how many bedrooms, how many bathrooms in the home. So, you know, we want to be known for clean and charming. You know, this house is clean, it’s cute, it looks homey, you know, that’s basically what it is. But, you know, you can think about how your home is unique. Maybe there’s some feature that you want to highlight and you can include that in your headline. Then, once people, you know, click on it, they can have some kind of, you know, good, punchy description when you actually fill out, you know, the description once people are actually clicked on your listing. And then the part that is sometimes overlooked, is people will click on your profile, because they want to know who they’re renting from. So, having a very nice picture, where you’re smiling; and having kind of a friendly and trustworthy and interesting little profile there can go a long way. So, those are kind of the four elements of your listing. And, if you think about it as an ad, as marketing, I think that will help you.

Ryan

Those are great ideas. And, you know, you’re not selling real-estate. Right? You’re selling the trip that they want to have. So, why would you take a picture of the front of your house versus the part that they actually care about, which is inside the living, or if you’re, you know, renting from San Diego or Orange County and you have a nice ocean view, one, I’m jealous, but two, you should show people that because that’s probably what they really want to see when they rent the place. And, we sold two properties last year. You know, three bedrooms, like eighteen-hundred square feet, here in Vegas, and it was like three hundred and fifty dollars or three hundred dollars to get professional photos. So, you’re spot-on right there; and really, you don’t have to do it more than once. It’s not like your selling and buying and doing all these things. So, for a couple of hundred bucks, you’re already going to be furnishing and doing things, spend the extra money, I just know that from a real-estate perspective. Like, that makes a whole lot of sense.

It would probably be helpful to create an avatar for your ideal guests, so you know how to best appeal to them.

Dr. Dave

Right. The other thing I would add, now that I’m thinking about it, is if you think your home will have sort of an avatar guest, what I mean by that is, who do you think is going to be, you know, your home most going to be appealing to? Think about them when you’re decorating your home and when you’re taking the pictures. I think traditionally for family vacations, probably the wife or the mom is going to be the one who’s looking through and doing a lot of the booking. So, that’s something to keep in mind as far as your décor, how you present it. And the other aspect of it, which we didn’t touch on, is having a business-ready home. And I was reading an article and they said that having a home that’s business-ready can add about ten thousand a year to your Airbnb, and it doesn’t take much to, you know, to be able to say in your listing that your home is business-ready. Basically, you need a desk or a workspace with a nice, comfortable chair.

Dr. Dave

So, you know, we have an area like that in our home, you know, and you can advertise that and, you know, and now you can capture, especially if you’re near like any major city or business area, now you can capture that sort of corporate clientele that is looking, you know, to maybe get some work done on their trip.

Ryan

That’s really good advice right there because that’s something that you might not think about. You know, what does a business need when they, you know, ship one of their employees over to a certain area? You know, what do they need? Internet connection, comfortable chair, desk, whatever it might be, printer. Something like this, that would do it, and boost listings. I mean, if that increases it by a thousand dollars, you’re probably going to get your money back that first year. So, that’s definitely some good advice right there.

Dr. Dave

The other thing that helps with the business-ready, and also really any listing, is that we now have a smart lock on our front door and so that makes it easier, because sometimes you can’t be there to, you know, to let them in. Maybe they’re coming in, they’ve got a really late flight or their flight’s been delayed and they’re going to get in at midnight and, you know, you can’t be there and, you know, you don’t want to have stress on your guests because they think they’ve got to make it there by a certain time for you to meet them. Then, you know, we’ve got a smart lock and, you know, you can get them the code and that works really well as well.Keyless Entry to Airbnb, Short-Term Rental Landlord

Keyless locks help guests with seamless entry to the rental without you needing to be present.  

Ryan

I’ve become a little bit of a, a fan of these smart locks, because we actually have one on our house and like now I hate having keys. I never use my key. I get annoyed when I have to use my key, like if the lock, because, you know, they run on batteries, they do die. You have to change it out. It’s not a huge deal, but it’s died a few times and I’m like ugh, I have to use my key, like what a pain. So, I can totally see inside of one of these listings, a smart lock where you just punch in a four-digit code, you give it to them and you just reset the code when that person leaves, or you keep the same code for a period of time and redo it. That’s another great idea. So, I’m looking at it here and, you know, there’s a lot of working pieces involved and I’m not, personally I’m looking at them and I’m like well, it’s not that big of a deal, but I know that a lot of people listening are really busy physicians, like yourself, and they may not have a spouse that could do this for them, you know. Is Airbnb or VRBO or one of these types of share economy kind of bookings, like, is this viable for them? Is it worth it?

Dr. Dave

You know, I think for us, it’s been worth it. I mean, certainly, you can, you can run the calculations, do some math, and see if, you know, you would prefer to do this with a, you know, full-service management company. Those are popping up left and right as well. We don’t use, you know, any kind of management company at this point. I think the numbers that I’ve seen is fees of ten to twenty percent of your revenue. So, there, you know, twenty percent seems a little bit high to me, but that would be a consideration. Of course, you know, you’ve got to run your numbers, but, you know, if you’re a full-time physician like I am, then I think you definitely need some key team members in place. You know, every person has got to decide, you know, if they have those team members or can develop those team members. But for us, you know, it’s, you know, it’s been a very worthwhile endeavor to this point and I’m actually interested in picking up a few more properties and maybe if we get a few more and get them optimized, then we may be looking at a, you know, at a management company at that point. Because at that point, you’re like how much, you know, revenue versus freedom and, you know, you start making these other calculations.

If the cards are played right, this passive investment can become a more active one.

Ryan

Yeah, because this essentially takes what could be a passive investment, right, rental real-estate, and makes it quite active.

Dr. Dave

Yeah. I mean, it’s definitely, you know, less passive than just having a long-term rental. I’ve got a long-term rental as well. It’s not completely passive, but definitely less management than something like this, but the returns are, you know, are significantly better for something like this. So, you know, it depends on, you know, what’s more important to you, I guess.

Ryan

Now you sound like a financial planner. It depends on what’s more important to your situation. I mean, that’s like a perfect financial planner right there. I’m so proud of you.

Dr. Dave

If this doctor thing doesn’t work out, I’m going to talk to you. There’s hope for me.

Ryan

There’s always room over here, bud. That’s cool. Well, you know, thank you for being on. I really appreciate it. I think this was fascinating to get kind of a little bit of a grip on and to understand it. And I think people are going to really enjoy the show. So, thank you for being on.

Airbnb, Short-Term Rental Landlord

If you’re booked more than 25% 3-months out, raise your prices.

Dr. Dave

Absolutely. I’ll give people one more tip here. My tip before you leave. If you’re booked more than twenty-five percent, three months out, raise your prices. You’re priced too low.

Ryan

Awesome. So, David, where can they, they can hear more about you and please promote your podcast, because it’s an awesome podcast for physicians.

Dr. Dave

Sure. So, I, and Ryan, thank you again for letting me come on the show and talk about Airbnb. My podcast is called Doctors Unbound where I interview doctors doing all sorts of cool things outside of clinical medicine. I also interview different experts who can help physicians. So, hopefully Ryan, we’ll get you on the show real soon as well. And thank you for giving me this opportunity to kind of show where I’m, if I can say, a little bit unbound myself. I like real-estate, I’ve always been interested in real-estate as an investment vehicle and we’ve discovered this Airbnb phenomenon and it’s working pretty well for us. So, thank you for allowing me to share with your audience what we’ve found out so far. So, people can reach me at doctorsunbound@gmail.com. They can come over to doctorsunbound.com and use the web form there if you just either search for my name, David Draghinas, or Doctors Unbound on any of the social media platforms that you like to use. I’m sure you can find me. I would love to hear from you. Ask me any questions about Airbnb or anything else related that’s on your mind. I would love to interact with you.

Ryan

And for everyone listening, David is also in the Financial Residency group, so you can always ping him in that group as well, and you’re going to see his posts in the group. So, you know, if you haven’t joined already, join. What was there, close to six hundred physicians and physician spouses in the group now? It’s been growing pretty, pretty rapidly actually.

Dr. Dave

That’s awesome.

Ryan

Yeah. So, come join us in the group. Ask questions. I’m sure David would love to hear from you, whether it’s privately or in the group. Dave, thanks again for being on the show.

Dr. Dave

Thanks again for having me.

Ryan Inman