Real Estate Investing: Buying, Flipping, and Renting (A Realtor Experience)

If you’re interested in investing in real estate but not quite sure how to go about it, how to choose the right house, how to flip or choose the tenants to rent to, in this guest post, by Erin Goddard, you will find the answers to all this and more.

I am honored to be a guest on Ray’s blog. This is something very special, but I can only hope to be as helpful as Ray.

I hope to offer some ideas on the great potential investing in real estate can be through our experiences of flipping and renting out homes. I do believe we have had successes, done mistakes, and learned a lot that are all worth sharing.


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Our Background

My husband and I started a small business in the real estate market in the beginning of 2016.  It is a relatively new endeavor to us, but in that time we have bought a total of 6 homes: 3 of them we turned into rentals, and 3 of them we flipped.

We also sold the first home we ever bought and owned to move when my husband changed jobs and relocated. So far, we have learned that no experience has been the same and the learning experiences in each process have been great, as in massive, but also good.

I was a math teacher with very little construction knowledge. My husband was an environment compliance manager at the time we started, so he also had an unrelated job. He, however, did have finish carpentry experience, plumbing experience, and roofing experience from past jobs and working with family members in these fields.

How to find the right real estate property for investment

To buy a home at a low cost is ideal obviously. This takes a lot of time searching, establishing good connections, and sometimes having plain old luck.

The Search

MLS feeds

Multiple Listing Services are the networks real estate agents in regions of each state link into to post the listings they have. Companies like Zillow and Auction will connect all of these regional networks nationwide.

Zillow and Realtor are what we use. I am afraid we have not ventured outside of these two.

Realtor does update its MLS feeds more often. This allows you to see the listings go up a little quicker and also the statuses change.

The various filters on Zillow, like looking at the maps, comparing costs, looking at tax histories, all make Zillow a little more user friendly. We constantly would be surfing and checking into these sites.

Sheriff sales

Sheriff sale schedules can be found on county websites. The sheriff sales are homes in foreclosure that the lender has handed over to the county to try to sell. On the sheriff sale site, there will be a time and location (often the courthouse), and it is an auction where the house goes to the highest bidder.

Buyers do not necessarily get to see or know the condition of the house. There is usually a reserve price (a starting bid), and the home tends to be sold in “As Is” condition. The risk, of course, is not knowing the conditions of the home, unless you have snooped around it- which I confess, I encourage.

Be aware of  the “As Is” contract. In most contracts, the home comes with disclosures. The contract between buyer and seller is based on the agreement of the truths of the disclosures.

If the roof is leaky, and the seller lied, there are legal means the buyer can get out of the contract. Not in an “As Is” contract.

Our experience with buying through a sheriff sale was great. The reserve price/starting bids sometimes are surprisingly high, but those we just walked away from.

The homes eventually go up for auction again for another opportunity to buy at a lower reserve. Keep an eye on them. Go in with a set price you want and try not to budge.

Auction.com

This is an interesting company which I compare to ebay for houses. Sometimes Zillow will link to an Auction file for a home. These again are bank repossessions.

The fine print really needs to be read for these homes because sometimes the foreclosure process is not as far along as you would hope. Closing could take a long time, and may not close at all..

Banks go to Auction.com to try to get a sale on their homes. These run the same risks as the sheriff sales with the “As Is” conditions.  

I registered for a user name, and it was very easy to do. I also easily placed a bid. Four days later, after no one upped my bid, we won, and I was kind of in shock in the fact I had clicked a few buttons, and now we had bought a house. So, this was easy to use.. Almost too easy.

Auction had people contact me right away. Communication was very quick and also helpful. I would say Auction had good customer support, but they are an even more distant third person seller than a sheriff sale.

The one hiccup we had was the abstract never came to us. We ended up having to pay for getting a new one made. Abstracts run between $1000- $2000. Still, overall I would say our experience with Auction was very good.

Connections

Getting in touch with the real estate agents in your area can really save time on the searching; however, one thing to know is often times real estate agents already have a calling list of established real estate investor; be persistent!

Call and politely inquire. Really present yourself as someone ready to renovate or invest. If you can get a trustworthy, strong relationship with a real estate agent, that really sets you up for more success in the search.

Luck

Sometimes after all of that time, nothing will show up. Sometimes, it really just takes a little luck and good timing.

How to start investing in rental properties

Something we heard repeatedly as we looked into renting properties was screen your tenants.

The quality of tenants can make a world of difference in the experience and the profit of your real estate. You must be careful to be fair, however; and it is illegal to deny tenants for reasons related to sex, gender, race, sexual orientation, etc…

We did applications for our tenants. Applications serve a lot of purpose. You have the right to know who will be living in your property and the potential tenant can show their initiative and a bit of their character by fully completing an application.

You need fair rules for your screening. Check your state for laws on being a landlord.

When it comes to screening tenants, I would say of the most important things to include on the application would be information about the following:

  1. Criminal record: look into their records. I suggest state online court records. I also suggest looking at facebook.
  2. Work history: Look for steady employment.
  3. References: Call the references. You could even have something for the references to fill out.

You want responsible, respectful, and financially able tenants.

Eforms have tweakable applications for free and can be downloaded as a word or PDF file.

Are rental properties a good investment?

We purchased two rentals at about the same time a year into the start of our small real estate business. After a successful renovation and sale of our first flip, we rolled the profit we got into two low cost homes.

They have been doing great for us in bringing a nice stream of income. We have had good relationships with our tenants, low maintenance requirements, and a steady stream of income.

I highly recommend rental properties as a fairly  passive income. We continue to be on the search to add more rentals to our binder, and will be happy to move on the right property.

The pros of investing in rental properties

1. Doesn’t require A giant capital

You are usually not looking for ritzy and glamorous homes. For the rentals we have, we never went in to transform them; we cleaned them. That’s it. Rentals are a good starter up project for passive income in real estate.

2. Passive income

With good screening practices, there should notbe a lot of the hands on stress of maintaining a good property with good tenants.

I do not think I need to say how great passive money is. Really we are just sitting back from a month to month basis, and we have an investment which is an asset to our financial folder bringing in income.

Again, assuming you have good renters, the property is for the most part maintaining itself. The home is truly an investment, growing in value with the market under the care of the renters and a little bit of your overseeing.

The steady monthly income is not huge after considering costs, but it is better than nothing. It is a $450 check a month in our hands that offset any of the costs, so we are losing nothing and coming out ahead.

3. A double money maker

After the home has provided affordable living for the rentee, and brought in a nice income for the renter, it can be brought up to date for resale.

Whether you have met the break even point or not through the renting period, the home can bring in a profit should you decide to sell.

The cons of investing in rental properties

1. Money gets tied up

Money gets tied up specially if you have a mortgage on the rental. I almost said a steady trickle of income above in the pros. The costs of mortgage, taxes, and insurance, not to mention maintenance, take away from a strong flow.

Make sure to do the math that you are coming out ahead. This is a slow and steady journey to break even, and your money is not as fluid to roll into other investments.

As an example, we have one rental we put $4000 down on. Based on our carrying costs and the rental amount, it will be about two years for us to break even on it.

2. Renter drama

We have not experienced renter drama. We have been fortunate to have great people renting. I’d like to say we did a good job screening.

But even with screening, tenants can go wild and thing can get legally ugly. The time taken to meet your renter’s needs and establish a respectful relationship is so worth the while.

3. Property damages

Things break. My husband has done some dryer troubleshooting. We have had to buy a new refrigerator all of a sudden. There has also been hail storms where we had to deal with a lot of insurance and hiring for repairs.

The responsibility as landlords to the tenants can cause for some sudden stress.

How to get started in the flipping houses business

We had a first dream flip that started us out. There was a little luck involved. We found a home that had been sitting on Auction. It was a first flip home in consideration, so we were kind of weary of Auction.

The auction ended having not met the reserve. Now, most times, the homes go right back up and through another “auction.” We did not know this and called a local real estate agent. It just so happened, the bank had listed it with a real estate agent specializing in foreclosures, and we called the day she got it.

We ended up with it. Here are some of the before and afters.

It was a mess, but we got it for very low. Again, this price will be trivial because it totally depends on the city you are buying in, but we landed this home for $27,500.

After you think you have found a good house- low in price and shabby, but not too shabby, you will want to weigh the possibility of flippling.

Flipping takes a leap. It is risky, but you also can arm yourself with some risk minimizers.

Mistakes to avoid when buying a house to flip

  • Drug houses. Homes with ammonia smells are commonly associated with meth.
  • Structural issues. We just are not knowledgeable of foundation fixes, and we would have to hire it out. Foundations can be expensive.
  • Ugly Houses. This may be weird, but you should be able to have vision of what you can do to the house. We do not tear down walls and transform. This, I think, is a common mistake for new flippers. The goal is not to pour a fortune into making an entirely new house.

Here was another home. You can see how we really just worked on what was there; refinished the floors and painted.

How much money do you need to flip a house?

This is hard to go into because it will vary entirely on the region you are working in. I did just want to show a glimpse of some costs to consider.

For our first home, our most successful, here is the profit we got.

cost details of flipping houses, real estate investments

It is also good to keep track of how many hours you spend. We tracked our time doing all of the work as well as any expenses we made using a shared Google spreadsheet. We documented about 800 hours.

Keep the receipts and this documentation to help with income taxes, which as seen in the table is a big chunk we kissed goodbye.

Is flipping houses a good investment?

We were hooked on flipping homes on our first home, and it profited enough to get us rolling into more rentals and more flip homes.

Despite the hard work, the satisfaction and profitability makes flipping another great investment if you are willing to put in the work and time.

I have to sometimes remind myself of the great light at the end of the tunnel when we are in the middle of the project, sweaty and on our knees in renovations, but the investment is worth the while.  

The pros to investing in flipping houses

1. can be very profitable

I put this statement here ignoring its counter argument. There is risk, obviously of the opposite, a flop. Some homes can be huge money pits, and we have seen some in the walk through where it would take more renovations than you could ever get out.

With good managing, however, the profits can be huge- another whole income to the yearly income. As I showed in our table above, we nearly doubled our investment in the end in a year’s time. We walked away that year with an amount written on a check larger than we had ever seen on one little piece of paper.

We have not ever gotten into the larger markets around here (we have tried, but they are very competitive). We have stuck to rural locations with smaller home costs. The gross profit in the larger markets would be riskier, but as the saying goes, also could be much a much higher reward.

2. Being your own boss

Our flips have been done on the side of full time jobs. My husband would go to his job, and then off to the renovation home he would go. Or, he would come home to watch the kids, and I would go do my jobs. I am a stay at home mom, but I too consider that a full-time job.

We worked with our schedules, and it was manageable- tiring, but manageable! We both enjoyed having the power in our hands to make this business work.

3. Satisfaction

We have had great satisfaction in the end. Though the process is rough at times, the finished product is amazing. We had the opportunity to dive into something we really loved to do. This job is a job of being the boss of yourself.

I do believe, the harder you work in this job of flipping houses, the better the pay off. It takes a lot of time, bargaining, work, and sweat, but if all of those are played right, a hugely profitable reward comes.

The cons to investing in flipping houses

1. It is A LOT of work

The man hours we recorded were on the low end of 800 hours. On shows, you see crews getting homes done in a month. We, being just two people took a lot longer. It always seemed we would miss our goal to finish by a couple months.

The end is particularly difficult, getting the last touch ups and details done, cleaning all of the construction out. It is not glamorous; it is dirty, sweaty, ugly, and exhausting.

I also do not know I would encourage flipping without having some construction skills and background. The profit margin would be greatly reduced if needing to hire out the jobs.  

2. Flops happen

We have not had any loss, but it is tricky. The costs add up, and you need to be careful. Having said it is a lot of work, we have had a home come out to have $8,000 of gross profit. The return rate was still better than putting gaining interest from letting that money grow in a savings.

Still, better than nothing, but if you consider we put about 1000 hours into it, we were managing and working an $8 per hour wage. The type of work that goes into it this is not an $8 an hour job. Flops will happen. This market can be risky.

Do your research and GO FOR IT

If you have read all of this, I commend you. You are getting a good start with researching. If you have not already found “Bigger Pockets,” I definitely recommend their content and joining their network.

They have a vast amount of experience to offer dealing with most of the questions concerning investing in real estate, whether it is renting, flipping, airbnb, or whatever else. They have a podcast and blog, and they are both great with very relevant and helpful experiences.

A lot of being a successful real estate investor is to be proactive and not reactive. With any business endeavor, the more risk, the more reward.

Real estate is risky, yes. We have found it very rewarding. We have been able to use our skills, learn new ones, and pave a foundation for a working business we enjoy. I wish this fortune to everyone.

Thanks, everyone, and thank you, Ray.

Erin is a blogger at Erin Baby Steps where she ponders out and takes on a mission to spread an awareness for math as it relates to toddler home learning/education, finances, projects, and even date night activity ideas.
She would love any support and suggestions as she takes one baby step at a time in raising family and meeting some personal goals.

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Passive Income: Investing In Index Funds For Beginners

If you have no clue what an index fund is or how to invest in one, in this post, I answer 7 questions that briefly cover all you need to know to start investing.

Let me begin by saying that investing in the stock market is one of the topics I have been avoiding to get into (there’s a list of them) because of how intimidating it felt. I had absolutely no clue what to do with this and every time I try to read about it, I get a headache!

However, eventually, I reached a dead end because I couldn’t find another topic for this week. And I figured I’ll have to get into this eventually if I wanted to properly create a diversified investment portfolio.

If you look at any established investor, you will find that they have to have money in the stock market, one way or another.

Diversification is a protection against ignorance.

Warren Buffett

But since I am a beginner, I’m not going to jump in and start buying individual stocks all by myself, then cross my fingers and hope for the best. I figured I should start with the beginner’s level for stock investments: Index Funds.

Investing in index funds is the easy and safer route to take if you want to invest in the stock market but lack the experience and knowledge it takes, or if you simply don’t feel like taking the risk.

And it seemed like the second best investment to get into after real estate for me. So I decided to look more into this as someone who has never been anywhere near the world of stock market.

If you too have no idea how to start in this kind of investment and maybe considering giving it a try, then this post is for you.


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What are index funds?

An index fund is a type of mutual funds, it is like a collection of funds that follow the performance of a number of different markets/companies, packaged together into a single fund called an index fund.

So, instead of making a choice and buying a fund in individual stock (which requires a great knowledge of that specific stock and its chances of rising or falling in price), you buy a bunch of them into one single fund.

This means more exposure to the stock market, however, with less risk.

Who should invest in index funds?

Anyone can invest in index funds, you don’t need to have extensive knowledge in the stock market as a whole.

You do, however, need to have some basic understanding of how this works and how to choose where to buy your index funds and which funds to buy.

The lower the price of the fund and the account expenses, the higher the profit you will make. And the more broad and diverse the stocks held by the index fund, the less likely you are to face losses.

You also need to know that investing in index funds is mostly a long term investment. Meaning that you need to be willing to hold on to that fund for a while (5-10 years and sometimes more) before you see real profits.

This is usually the long-term investment suggested for retirement, similar to retirement accounts.

What are the types of index funds?

Index funds can be classified into:

  1. Stock index funds
  2. Bond index funds
  3. Commodity index funds

In this post, I’m mainly focusing on the stock index funds. However, I briefly went over the commodity ones in both Investing In Gold (ETFs & stocks)and Investing In Real Estate (funds). You can check them out for a quick overview.

As for stock index funds, these can also be classified into a number of types:

1. Broad market index fund

This is when an index fund is following the performance of an entire market. Famous examples of such funds are ones following the performance of the S&P 500 or Dow Jones.

2. Sector index fund

This is an index fund that follows the performance/profits of a certain industry in the country, such as the banking sector, the real estate sector, or a more broad sector like technology, etc.

3. International index fund

This one is an index fund that follows a number of companies from different countries.

It does not follow the performance of the stock market of these countries, but the performance of the companies whose stocks are part of the fund.

4. Global index fund

This follows the performance of the stock market of a number of countries. This index fund has main stocks from different nations, such as the FTSE 100 for Britain or the EGX 30 for Egypt.

How to choose an index fund?

There are a few things you need to consider and decide on before you take the step and buy an index fund.

Type

First thing you need to decide which type of stock you want to follow.

Do you want to follow the global stock for multiple countries? Or would you rather go for a certain industry’s performance, like banking? Or ones that track currencies or metals, like gold and silver?

There are plenty of options, and if you are not sure which one is to choose, you should go for ones that cover a bigger and broader market.

Fees

Before you buy an index fund, you should check first what kind of fees you will need to pay.

There are commission fees that gets deducted from your profits periodically, you may need to check the percentage and see if it is low enough for you to still be making a profit.

There are also some brokers or index fund companies that charge you to create an account, you will also want to consider this charge.

One last thing is the trading charges. How much you will need to pay to buy or sell your funds (you can buy or sell an index fund at the end of the trading day only).

Broker

In most cases, you will need to buy a certain index fund through a broker or a brokerage firm. You can invest through a brokerage firm locally or go with an online broker.

It is important that you first research this broker and read what other clients have to say about their service.

You can read more about how to choose the right broker here. Or you can find out about international online brokers instead.

How much money do you need to invest in index funds?

Investing in an index fund is known for its low cost. And this is because it is basically holding all the stocks in one package instead of hiring a professional to pick the right stocks to buy. So, that leaves you with not much expenses to pay.

The price for an index fund varies based on where you are buying it from and which fund type you are going to invest in.

Some index funds has no minimum amount required to start and others can have a minimum starting amount of $2000, $3000, or more.

So you can invest with an amount anywhere between $10 and $10,000. But it goes without saying that the more money you put in, the more profit you will make along the years.

However, you can start out with a small amount and keep adding to it every few months or so. You can check this list of the cheapest index funds to buy.

If you invest in a very low cost index fund-where you don’t put the money in at one time, but average in over 10 years-you’ll do better than 90% of the people who started investing at the same time.

Warren Buffett

What are the best index funds to buy in 2019?

Since I’m no expert, I did what any beginner would do and started doing research. And I found that there are a number of index funds that are always at the top of every list of best index funds to invest in. They are mostly the ones with the lowest fees and low to moderate charge for opening an account.

This is a list of index funds that are suggested by most stock experts/advisers (in order from lowest to highest annual expense ratio).

  1. Fidelity Spartan 500 (0.015%)
  2. Schwab S&P 500 (0.02%)
  3. Schwab Total Stock Market (0.03%)
  4. Vanguard S&P 500 (0.04%)
  5. iShares Core S&P 500 (0.04%)
  6. Vanguard Total Stock Market (0.04%)
  7. Vanguard Total World Stock (0.10%)
  8. Bloomberg Barclays High Yield Bond (0.4%)

Some of these funds you can invest in from anywhere in the world; however, depending on your country, you may need to invest through a local brokerage firm and not directly through the index fund provider.

What are the available index funds in Egypt?

As one of the largest and most developed countries in the MENA region, Egypt has a huge potential for economical growth and many opportunities for investment.

If you are a resident of Egypt and want to know which funds you can invest in locally, or if you are not a resident and simply want to invest in funds in Egypt, below is a list of some of the funds you can consider:

You can also check this article out to have an idea of the top ranking funds in Egypt for this past year and how much profit each made.

Till next week, happy days!

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Passive Income: How To Make Money With Airbnb

In this post, I answer 7 questions that cover everything you need to know to start making money with Airbnb.

Previously, in the Passive Income: 4 Real Estate Investing Options post, I wrote about some of the many ways one can invest in real estate. And one of the methods mentioned there was buying a property and putting it up for rent.

Renting a property gives you a steady passive income source. However, some of the downsides to this was 1. you may end up with tenants who don’t pay and 2. the amount of money involved to actually buy a property.

But what if you can rent a spare room in the house you already live in and with a guaranteed payment?

Recently, I came across an ad for Airbnb, and I didn’t actually know much about the service other than that it’s one that provides houses for tourists and such.

I also didn’t know that the service was available in Egypt, which it is!


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1. What is Airbnb?

This is an American company that facilitates tourists’ stay in a country by providing them with an online service to rent apartments, rooms, and hostel beds, etc, for the short period of their stay.

The apartments and rooms available for rent is provided by the locals of that country. They put their available properties up for rent on the Airbnb website, and they get contacted once a tourist is interested in renting their place.

The website provides customizable search options for the guest to find the exact type of property with all the amenities they need. And it gives the host the option to set house rules for the guests to know and agree on before booking.

What you can provide as a host:

1. Place

You can list any kind of property. It can be a shared room, a private room, or an entire house.

The place needs to be clean, secure, and have essential amenities like a pillow and a towel for each guest. You can read more about the basic requirements for hosting here.

2. Experience

Airbnb Experiences are activities designed by locals. They go beyond typical tours or classes by immersing guests in a special kind of activity that they wouldn’t be able to experience on their own.

It’s an opportunity for anyone to share their hobbies, skills, or expertise without needing an extra room. Read more about experience hosting here.

2. Why do tourists use Airbnb instead of hotels?

For the tourists who are looking to spend a short time in your country, most of them want to get the most out of their stay with the least amount of money possible. Airbnb provides them with this option when they put properties or rooms for rent at quite low prices compared to any hotel room in that same area.

It also gives the tourist the ability to live like locals in the country which maximizes their experience.

Besides, many Airbnb hosts provide their guests with more than just a stay, but they help them make the most out of their stay by advising them of places to visit that only a local in that area would know.

That is of course beside the ability to actually book an experience; something that you can only have when touring with a local.

People don’t use Airbnb overtly to trust people more. They use it because they want to get a better sense of the culture and to save money. A by-product was that they live in someone else’s shoes.

Brian Chesky

3. How is Airbnb different from traditional renting?

There are huge advantages to renting through Airbnb instead of the traditional renting, but there can also be some disadvantages.

Advantages:

Guaranteed Payment

As opposed to renting your house the traditional way where you can face an issue like a non-paying tenant, when you rent through Airbnb, you will never have to deal with this kind of hassle because they handle all payments for you. And the guest makes the full payment through the website in advance.

Host Guarantee

Airbnb have insurance programs which secures you and your house in the rare case of any incident occurring that causes damage or injury.

Whenever a guest makes a reservation and stays at your place, you’re automatically covered by their Host Guarantee. You can read more about the terms and conditions of benefiting from this here.

Home Insurance

Host Protection Insurance program provides primary liability coverage of up to $1 million USD per occurrence. The program protects against liability claims that happen in a listing, or on an Airbnb property, during a stay.

You can read more about what is covered by this program here.

Experience Insurance

Experience protection insurance provides experience hosts with free liability insurance of up to $1 million USD to protect against personal injury or property damage claims.

You can read more about what is covered by this insurance here.

Disadvantages

Not a stable source of income

Unlike renting a house to a resident who is going to live there for at least a year and possibly more, renting to tourists will not provide you with that monthly stable income.

Some people can have guests booking their place every month but that is not necessarily the case with every host.

How often you would get a booking would mostly depend on the location of your place (how close it is from sightseeing areas that tourists would be interested in) and how appealing it is (the reviews you get).

Possible damage

There is still the possibility that you might encounter damage that is not covered by the Airbnb Insurance.

4. Is Airbnb safe?

This was an obvious concern when I first learned about the service. If you have a spare room that you want to put up for rent, is it really safe for you to invite complete strangers into your house? Or if you are the one looking for a place to stay, would you feel safe staying with a complete stranger in a foreign country?

“On any given night, 2 million people stay in homes on Airbnb in 81,000 cities all over the world. There are nearly 5 million listings in 191 countries to choose from —that’s more than the top five hotel chains combined.”

So how did this service actually manage to get so popular and have millions of users around the world, whether hosts or tourists? How do all these people trust this kind of service and feel safe using it?

Here are some of the measures taken to provide safety for the host:

They run hosts and guests against regulatory, terrorist, and sanctions watchlists. And for hosts and guests in the United States, they also conduct background checks.

Every guest is asked to provide their full name, date of birth, photo, phone number, email address, and payment information to Airbnb before booking. Home hosts also have the option to require guests to provide Airbnb with a government ID before booking their listing.

Reading reviews from previous bookings from that guest and what other hosts had to say about their stay with them can also be helpful. These reviews can only be added after the reservation is complete; so they are based on actual experience.

Every Airbnb reservation is scored for risk before it’s confirmed. They use predictive analytics and machine learning to instantly evaluate hundreds of signals that help flag and investigate suspicious activity before it happens.

And their customer service is available 24/7 in 11 languages.

You can read more about the Airbnb terms of safety and protection for both hosts and guests here.

Airbnb has proven that hospitality, generosity, and the simple act of trust between strangers can go a long way.

Joe Gebbia

5. Is Airbnb legal?

The service is legal to use in Egypt, so far. However, Airbnb services has been banned by a number of cities and countries due to housing and rental shortage and pricing issues.

So you will need to check whether or not it is legal to use this service in your city before you list your property for rental.

6. How do you become an Airbnb host?

All you need to do is visit their website to sign up and list your property for free.

When listing your property you will be asked to specify all the available amenities and facilities provided, and of course the exact address of the property.

You will then need to provide photos of the place and a short description for the guest to know what to expect.

After that you will have the option to set the price you want, the timing and duration this place is available for rent, any requirements you look for in the guests you will host, and any house rules you want them to follow during their stay.

You are also asked to provide your personal details, such as your full name, your phone number and your ID for verification.

There is a very good article I read by someone who has been an Airbnb host for a few years, advising on how to be a great host, you can read it here.

7. How do you get paid with Airbnb?

First, Airbnb takes a commission fee of 3% from the payment you receive as the host (and between 6%-12% from the guest booking).

As mentioned earlier, guests make the full payment for their stay through the Airbnb website in advance. This payment is held for 24 hours after their check-in, which is the time the guest has to report to the company if there’s anything wrong with the booking or if they couldn’t reach you, the host, in which case the money will be refunded to the guest.

However, in the normal case where you are there for the guest or provided the key for them, following whatever scenario you’ve both agreed on beforehand, you will have your money transferred to you after the 24 hours.

There are several payment options provided. You can have the payment sent to your Paypal or Payoneer accounts, or you can have it directly deposited into your bank account, or it can be mailed to you as a check. The time of the transfer will vary based on the method you choose.

Conclusion

This is a service that can certainly make a difference to your income with little to no effort on your part. It can also be fun for you, if you like to meet new people from different countries and make connections.

And while using this service can come with a potential risk, especially if you will be sharing the place you live in; however, you still have control over the guests you accept and you can ask for all the information you need about them before confirming their booking.

It will be less risky if you will rent a spare property, as long as you make sure you keep any personal or valuable belongings in a safe place (preferably not in the same house).

For me, I think this can be a really good source to increase my income and I do love meeting people of different nationalities. So I plan on trying this myself soon and will be sharing my experience in a later post once I have had my first guest.

Till next week, happy days!

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