Airbnbs are Stocks, Rentals are Bonds

Stocks & Bonds Ya’ll,

Recently Hoasty has been spending a lot of time with Real Estate Investors, and we even have a surprise coming next month for those faithful that read our blog each week, but we wanted to share a few things that we cover with Investors when we discuss Airbnb Real Estate Investing.

So let’s get right to it. But do stay tuned for our next month’s launch of our new podcast called, “Real Estate Empire” Podcast. Check in early June to hear more about it.

Risk & Reward

Stocks & Bonds Theory

We actually received this thought from an @properties real estate agent in Chicago, after sitting down for a vanilla latte and discussing the business that Hoasty is in.

Meredith was taking in a lot of information, but she was able to parse Hoasty’s (and vacation rental’s) value proposition down into a very simple comparison of Stocks & Bonds.

Bonds, in this situation, are traditional rentals. When a tenant signs a lease, the owner may never expect to make $1 more than was originally agreed to in the contract. Much like a bond, it is a debt owed by the tenant to the owner of the property over a specific lease period.

Stocks, on the other hand, provide for exponential growth. When utilizing stocks for investment, the investor expects to make more and more money over time. Preferably the investor would prefer to make more money than the market rate, and therefor grow their wealth.

Vacation rentals are like stock. There is more risk in this path, but without a doubt more return. Take for example this property:

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VS $1,200/monthly

That’s 14k in rent vs 39k in Vacation Rental. No Brainer.

This is a great example of how Vacation Rentals can provide more than 100% more revenue to the owner of this unit, but they do come with different costs as well.

Think of such things as internet/wifi, electricity, water bill, and furnishing the unit.

But the fact is, with an additional $25,000 in revenue each year, it’s not a hard decision to make for an owner seeking higher cashflow.

Now these numbers are generated on the concept that this unit is 100% used for Vacation Rentals, and is not personally used as well as having no ‘down time’ for repairs and personal use during the year.

But what I often remind real estate investors of these opportunities is that this is the revenue potential with just 58% occupancy. When the unit achieves 70% to 80% occupancy, the revenue nearly doubles again.

As you can imagine, this is where the benefit of having Hoasty manage your Vacation Rental properties allows you to provide your guests:

  • Seamless check-in check-out experience

  • 24/7 rapid communication

  • 1 day booking potentials

  • Cleaning Management

  • Consumable Management (paper towels, napkins, coffee, toilet paper…)

  • But potentially most importantly -> Automatic Revenue Optimization

Don’t be shy to contact Hoasty if you are interested in learning how much your property could earn.