all right what's up everybody so I'm here in an air B&B and I'm actually
going to take you on a tour of the unit because it's a pretty sweet unit and if
you guess which city I'm in I will give you a Starbucks gift card of an amount
that I determined to be reasonable also in this video I'm going to give you some
air be the pricing tips how to come up with an estimate for your air B&B
because you really you want to have about five estimates and I'll tell you
exactly why I'm actually looking at turning a property on into a possible
air B&B and when you start looking at different prices and what you think you
can get you're gonna see like a wide array of prices I mean if I were to
compare the lowest estimate I got to the highest estimate there was over a
hundred thousand dollar difference in the prices so you really have to be sure
about how your prices and I'll tell you exactly how to do that but first let's
uh check out this view right here so here's the view of the downtown I'll
take you to the home office as well so anyway it's the first strategy that you
want to use and this will be like the highest in it so anytime you're coming
up in the nest amid you typically like never want to use the highest amid you
also never want to really use the low estimate usually usually you kind of
want to be somewhere in the middle so here's the home office if I worked in
here every single day I would be so inspired and motivated not like I'm not
right now but okay so the first one is a service called Elliot and me now when le
to me does it's basically an algorithm set up by some Stanford guy I think
where it takes you to count all the comps trends different things like that
and then gives you a number it's it's literally just a free service you just
type in your address and it spits out a number so it's really it's really easy
to do and I found that estimate to be pretty high and I think if you do air
B&B a lot I think people would agree with me so that would be estimate number
one the highest net the next estimate you want to use is a service called air
DNA and that's actually a paid service I think it's like 20 I think you have to
sign up it's like 20 bucks but if you're serious about doing air B&B 20 bucks
should not be that bad and here's bedroom get a better
view of that you got a patio out there as well so err DNA is kind of like la to
me but I found it just to be it's gonna be a lower estimate but it's gonna be in
my opinion a more realistic estimate so you're gonna get like the exact comps
you're gonna see what exact properties have made year-to-date which I don't
know how they actually we're able to do that but you're gonna have just lots of
data lots of information they'll give you and then they'll actually give you a
low estimate a highest submit different like scenarios it's actually just kind
of cool as far as all the data that they collected they did a lot of data mining
which is always like a huge thing nowadays and you can just get some
really cool information so that should be estimate number two for your coming
up with your price now estimate number three you want to find some local Airbnb
management companies so in every city there's gonna there's gonna be usually
like five or ten there's gonna be several companies that specialize only
an Airbnb property management and they can give you a pretty good estimate all
you have to do is get you know call them they do this all the time so it's not
like a burden for you to ask them so just column say look here's my
property it's in pretty good condition
this many bedrooms bathrooms and they'll tell you like exactly what they think
they can get for it so that would be estimate number three and I found that
the third estimate is going to be more in line with the air DNA versus the LA
Denis so it should be right around that price see you should start to be getting
a pretty good idea of how much you can charge for your Airbnb now the fourth
estimate there's a lot of national like Airbnb companies like more of the bigger
companies and those companies might charge a little bit more they might not
be as specialized in their area but you might as well get an estimate from them
as well that's just a simple Google search you can find some of these more
these some national companies and within a day or two that can give you an
estimate so that would be estimate number four and by now you should have
like a a really good idea of exactly how much
you know you think you can charge for your place because if there's estimates
that are wildly different I mean why you want to be conservative with Airbnb
especially because the laws are always changing and things like that going on
so always be conservative with your number so after talking to two different
types of property management companies getting to estimates from them as well
as air DNA as well as LA than me the last thing you want to do is just go on
Airbnb and see what things you know see what properties are selling for or
renting for that's the probably the most simple way to do it and that can give
you a really good idea of you know where where you're gonna be and keep in mind
the estimates that you're gonna get for air bebe and I'm actually going to go
outside this patio is really sweet so let me open up I don't know if it's
pretty loud out here I don't know if you can hear me see them into a panorama
so you got water downtown
got this pool patio you hear this
and you can see mountains in the background
and I just saw a Spirit Airlines flight go by so someone probably got a good
deal it's like $50 to fly across the country they don't give you any drinks
or pretzels or anything I'm sorry anyways got distracted so you're gonna
have five estimates you can put them on a sheet you can order them in from
highest to lowest and you also want to think in terms of gross income so
they're not giving you like the net income they're giving you the gross
income so then you say okay well if I could make $100,000 as a gross income
and I was actually just looking at a property where that was going to be
about the gross income then you have to take into account the management fees so
and I would always recommend getting a property manager I mean maybe when
you're first getting started you can do it yourself but it's just a high like
high turnover because it's obviously people are just staying for a couple of
days high maintenance it's it's a more involved property
management job and I've been a property management before it let me just tell
you you should just hire somebody just pay ten 20 percent to hire somebody and
most Airbnb companies will actually charge you about 20 percent so that I
think that's kind of like the standard rate for Airbnb 20% of the gross income
that you get so factor that in and then you come up with your net number and
then obviously you have to take away for for mortgage and debt service and things
like that so you get your net price and then you subtract it from the mortgage
and theoretically that's what your price is gonna that's how much you're gonna be
able to make so when you're looking at properties you know you need to get the
five estimates factoring the 20% and then subtract for the cost of mortgage
and just a couple last tips so when you're first getting started you want to
price your Airbnb pretty low so you don't want to be at like the high tech
you know the high-end in the spectrum so the whole strategy with the Airbnb is
that you price it pretty low you make it super nice and professional photography
professional cleaning services professional like really good
description where you say like amazing like this one caught my attention
because it had a maze I love yous so okay actually this place
been terrible but as long as I had good views I was gonna okay so you need to
write a really good property description have everything going but most
importantly if you just price it low enough people were booked it and then if
it if it you just want to start getting good reviews so that's a good strategy
for different things you know you just price it's super low so you get really
good reviews and then eventually you can you consider you know going back up to
market price or even charging a premium price if you want to the next tip I have
is obviously the Airbnb laws are always changing so you really need to be aware
you know you need a reader as many articles as possible what about Airbnb
laws in your area as well as other areas because in some cities the laws are like
super strict like I think in Paris and other cities like that where there's
just a ton of tourism I think it's Spain actually they've really cracked down on
them so you need to look at like the extreme Airbnb laws as well as just the
normal standard ones and depending on what your city is you can probably get
an idea of where the laws are headed or where they might be headed as well as
maybe how to get around them if you want to do that I don't recommend it but some
people do and your property manager one of the reasons why I like getting
estimates and property managers to like local as well as national ones is it'll
give you like some insider information but they'll have a lot of information
that they can helpful information about your areas laws and what you need to do
to make sure you're complying with them and just general tips so that should
also help you just by talking with them I'm gonna do one last panoramic here I
would give you a hint about the city but I think you should be able to get it by
now there's mountains water in the downtown you should have enough hints
okay so hopefully you can guess the city and I'm just to recap this video like I
said you want to get five estimates so the five estimates would be LA to me err
DNA just going on Airbnb and looking at it as well as to property manager
estimates that specialize in Airbnb so that's gonna give you the best general
frame of reference for how much you can charge and then lastly my three tips
would be do as much research on the Airbnb laws so you basically become a
tax in the Airbnb laws all you really have
to do is maybe read a couple article green you know an hour's worth of
articles and you can really get a good idea next just keep your prices really
low when you're starting out just so you can get really good reviews and then if
your goal is to turn it into like a premium price option for everybody like
a luxury destination then you know you can bump your prices up incrementally
but you never want to start with a highest price and then lastly I would
recommend getting them property manager I don't think it's worth your time and
hassle to meet people with keys if that's something you have to do
scheduling people responding to inquiries at all times of the day at
night fixing things that's something there's services that
will do this for you so you should be focusing on more like building your
portfolio and higher leverage activities rather than you know fixing little
things here and there and I've been a property manager before so I can tell
you from firsthand experience it's great to have a property manager just pay them
pay them twenty percent just factor that in and you won't have any the headache
factor will be significantly lower so there you have it hope you enjoyed this
video please like it please share it please guess which city you think it is
so hey if you guess correctly I will send you I'll email you a Starbucks gift
card and I'll just do one more walkthrough so you can get one last view
of the city