If you've been dreaming about financial freedom through Airbnb investing—but you're stuck wondering where to even start— Episode 118 of the Host Coach Airbnb Investing Podcast is for you!
You'll hear how a woman went from zero experience to earning over $115,000 in her very first year - with just one Airbnb! She didn't come from a family of investors, she didn't have unlimited cash, and she didn't take huge risks.
Instead, she did her homework, made smart decisions, and followed a process that turned her dream into reality.
Read on to learn how Dominique found partners and set up a smart deal structure that kept everyone protected, designed a standout property that guests can't stop raving about, and how she avoided one setup mistake that almost cost her the entire listing!
Topics discussed in this episode:
- How to structure a multi-investor LLC
- The mindset that leads to creating an Airbnb guests love
- Design on a budget sources and items that feel luxurious
- The #1 setup mistake to avoid as a new Airbnb host
- How to balance personal use and covering your Airbnb mortgage
- The unexpected joy of being a host
Host Coach Airbnb Podcast Episode 118 Show Notes:
You invested with friends and family. Can you tell us a little bit about that? Did you just have tons of money sitting in the bank?
No. So what happened was my husband and I had received a small inheritance enough for a down payment on something and we decided we wanted to buy an investment property. I'm a real estate agent, and I realized that in the DC area where we live. There was nothing we could put 20% down on and have the return that would pay for the property. So we decided to look for something cheaper and we thought, wouldn't it be fun to have a little second home nearby? And the eastern shore was someplace that was always very close to our heart.
So I started doing trips out there. As I was going back and forth, we were having dinner with my cousin and best friend. And I was telling them about what I was doing and they said, you know, we have some cash that we've been trying to figure out where to invest, and if you could find a place that was big enough for both of our families and our extended family, then we could go in on it with you... but we do need some kind of return on that investment. So that doubled our budget and that's how we found this house.
Exceeding Airbnb Investment Goals
Okay, so the goal was at least half of you wanted to make a return. You wanted to cover the mortgage. And you were successful?
Yes. In our first year, we hit the goal that we had a couple years down the road! Our gross was about $115,000.
So you hit like your year two/year three goal in year one, which was six figures. That's fantastic.
Dominique, you grossed $115,000 in your first year with one Airbnb property. What was the one decision that made that possible?
I would say the one decision is doing my homework, and that included finding the Host Coach book, which I found to be the most practical and useful guide available. I actually took notes from your book. I still have them in a Google doc, and I referred to it regularly, both during the search phase, and the setup phase for our Airbnb heron's rest on the Eastern shore.
How to Structure an Airbnb Deal with Friends
You invested with friends, and I understand that you structured an LLC to make sure that everybody was happy and protected. Could you dive into some of the more interesting points in that deal structure?
Sure. The four of us sat down together and we were very clear that our relationship and that of our kids who are very close were the top priority. So we brainstormed what things could happen to change things related to the property. What if it wasn't as profitable as we hoped? Somebody's getting a divorce, we're having disagreements on use, or somebody wants out because they want to pull their investment out for any reason? And we came up with a plan so that those decisions are addressed in our operating agreement. Once we did that, we worked with a lawyer to do our whole LLC agreement and we incorporated how decisions were made, how people could get out, and that really was helpful to do ahead of time. You don't want to do that in the moment.
Safeguarding Your Airbnb Investment
What is an example of one of those solutions to those problems? Basically we had a decision tree in place. So if somebody's getting a divorce, we each own 25%. How would we make decisions so that we would not have to do that down the road?
I can't tell you how important it is when you're structuring a deal, particularly with family and friends, to safeguard the relationship. Yes, safeguard the investment. So no one ever plans for something bad to happen, but prior planning prevents a lot of problems.
Exactly. And the potential loss of great friendships and fallout within family. So I think that's incredibly intelligent. It's something that anyone that's thinking about investing with a partner to consider.
It was weird to talk about divorce because none of us is planning to get a divorce. But stuff happens and we realized to put our relationship first, we needed to think about what that would look like.
Creating an Airbnb Guests Love
And you didn't just build a business, you built a place that guests say it feels like staying at their bestfriend's home. How did you create that kind of magic?
In my work as a real estate agent, I always ask myself, what kind of agent would I want for myself or friends or family? And I just did the same thing with the Airbnb. I ask myself, what kind of Airbnb do we like to stay in, and I love Airbnbs that feel personal, that have touches via art or antiques that make them special instead of generic. Otherwise, I could stay in a hotel. Right? I also really appreciate when they have conveniences: like extra toothbrushes. And we love to cook as an extended family when we're traveling. And the kitchen is really well stocked with equipment, spices, and guests. Just love that.
So you do any particular spices because you're on the Eastern shore? Yes. We have two gifts for guests along with a personal note from us welcoming them, and that's some local coffee that has beautiful labels with herons or oysters and things like that on it, and Old Bay Seasoning, of course.
Of course, we put that on everything!
Airbnb Designing On a Budget
I love to make beautiful places that are special, but I also don't have an endless budget because we are looking for return on investment. Do you have any design on a dime trick for listeners who want to create an amazing space but have a small budget?
What I did from the beginning, I thought of your concept of surprise and delight, and that guided us so that every room has something beautiful or luxurious or super cozy. Our homes in the Chesapeake Bay area, and we picked colors that went with that blue and green since it's waterfront and a nature theme because people are out there for the nature. We wanted it to have an elevated almost Caribbean feel, but we didn't want to break the budget, so we scoured our homes for beautiful art or books or items that would go well with the theme.
I bought real art on Etsy and just had it framed at Michael's or used pre-made frames if they were standard sizes. We got pieces at antique stores. We had some extra pottery because I do some potting and all our linens are a hundred percent cotton, but we got them on Wayfair or on Amazon. We bought some furniture from the previous owners. Home Goods, Home Sense, and Costco were great stores for other items.
What we did spend more on were things that had to do with comfort. So sofas we got at Macy's were very reasonably priced for a big sectional, but we got to try it out and get exactly the size that fit our space. We actually ordered a mattress from Costco that we wanted to try, and then when we slept on it and found it was really comfy, we ordered them for all the beds that we didn't already have.
We wanted a showstopper for the dining room. And I found, Amish carpenter and honestly, we had a live edge dining table made a kitchen table shaker chairs that were only marginally more expensive than what we were seeing on Wayfair and much more quality. And these were things that we could really build the house around.
How many bedrooms is the house again? It is five bedrooms. That's fantastic. I love that you shopped local, had something custom made, but it was still less than Wayfair because there are those moments where you're like, "I've never sat on this. It looks nice, but what is the quality?" And so knowing that you could have it built, I love that. How long did it take you to set it all up?
We closed at the end of August in 2023 and we decided we wanted to take the winter to set it up. Because we weren't in a huge hurry and we knew that really late winter going into spring was going to get us in the season to get the most bookings. It didn't need to take that long, but we gave ourselves that time.
Sounds like you've enjoyed the whole process all the way through.
I loved it and my best friend, who is one of the owners laughed because I was involving her in a lot of the choices, but I sort of took on the main role. I would take pictures of things we had, and things I was considering and I almost made it like paper dolls. And so I had folders for every room with art possibilities and rug possibilities and sofa and chairs. And so we went out there for the weekend and I laid them all out on the huge kitchen island and she said, you know, this reminds me of that Beautiful Mind movie scene where she goes into the shed and it's all kind of crazy! It was super fun and I really feel like taking that time really helped us hit it out of the park.
Creative Airbnb Accents
Guests can really tell when someone has cared about a property and curated each room to make it an experience. Not even like, "oh, this is really expensive, but this is really special." And I've actually started using AI when I have the art that I want, and I'll upload that picture and then I'll say, "I want an accent wall in this color family," and I'll get five or six options with the actual paint color on it. And that's helped with some really bold and unusual colors and coming up with something striking and interesting without having to repaint.
We were very lucky because the previous owners had done the heavy lifting on interior renovations, and we actually loved their paint colors. We did do some exterior work, window replacement, shutter replacement, but we love the color of the front door. It's what gave us that Caribbean vibe idea, and so we used that on the shutters when we replaced them. We made a porch with colorful rocking chairs and things and that - it was just really fun. I feel like it's a really creative outlet doing something like this, and I loved every minute.
Dividing Airbnb Investor Responsibilities
You touched on the creativity. Some people are creative, some people are more aligned analytically. With four different owners, how do you guys divvy up responsibilities of like guest communications and paying housekeepers and running the books? Or does everybody have a individual role?
We really don't have individual roles. Because I have a lot of expertise in staging from my work and working with contractors, I have taken most of that on. We did hire a manager to do the bookings and guest communication. I'm on there and I'm involved, and when it's something that only I can answer, I will do that. But they do the rental agreement and all of that kind of stuff. This has given me time to do the stuff that I enjoy the most.
The Airbnb Mistake That Almost Cost The Listing
I understand that you made a setup mistake that almost cost you the entire listing. What happened and how can others avoid that?
So we have a wonderful manager. We made an appointment to set up the listing together since she was experienced with that and she suggested we do it on my account, which is correct. However, when we added her as the co-host, it wasn't showing her Superhost status, which we knew from your book that is really helpful to generate bookings. And, we were very time constrained. I was going back to the DC area and she was out on the eastern shore and she said, "well, let's just do it on mine, and get it live, and then we can figure it out." So then we launched it.
By the end of the year, we had 39 reviews, but when we were doing our taxes, we realized I didn't have access to the finances and things like that. And in talking to Airbnb, we understood that I would need to be the listing owner from Airbnb's perspective, and there was no way to transfer the listing with all the reviews. We had to start it from scratch and we went to every level of Airbnb and there was no way to keep our reviews. The only thing that we were able to do was screenshot all our reviews and put them in the photos as additional photos, which we were referred to so that people knew it wasn't a new listing. We had a great year the second year, it really didn't cost us momentum that we can tell.
The big takeaway is your listing has to be set up under your Airbnb account as a host, even if you're using a co-host from the get go.
For those out there, thinking about working with a co-host or property manager, make sure that you own that data, own the photos, own the reviews, the financial information. I'm glad that it didn't end up costing you the relationship with your co-host and it didn't impact the new revenue stream.
Choosing Limited Airbnb Occupancy vs Profitability
I'm curious, most hosts chase a hundred percent occupancy or as much occupancy as they can, and you chose not to. How did that make you more profitable?
I don't know if it made us more profitable, but we were still able to reach the goals that we had set. We decided that this investment was both for personal use, so keeping the house in top condition was really important to all of us from a guest perspective and a personal perspective. We wanted to reduce wear and tear. We wanted to use it so we weren't chasing a hundred percent occupancy. We set a minimum price of $700 per night, and a two night minimum. It's a higher night minimum in the summer, for example. But we wanted to avoid parties, and we wanted to encourage a high caliber of guests. While higher rental prices might decrease bookings, we are making our earning goals so it's fine with us.
What surprised you the most throughout this investing experience?
We were surprised that we hit our income goal year one. We were expecting a ramp up. We got the great info from Host Coach, and I'm not curring favor. I really mean it. It has been such a great guide. It helped us evaluate the property before we bought it. It helped us set it up and run it well, find our terrific manager, plus having a great house that had a special quality, like there weren't five others like it made all of that possible.
So the other big surprise I want to mention is after the anxiety of the first rentals, which when you want this as your vacation home too, it was really hard to have other people there. What we were surprised about is how great the pleasure is of sharing the house with others because they so appreciate it and they let us know. Getting those kinds of reviews or notes just makes our day.
I love that. I also love when people choose to have really special moments, like engagements, anniversaries, birthdays, like that just makes me happy. It's not just the bank account, it's the emotional bank account. I just fills me with joy. Having been through this journey, hit your goals, learned a few things along the way.
Key Decision for Airbnb Success
What's your best advice for Airbnb investors who are just getting started? I would absolutely do your homework. Take your time running those numbers, making sure you use things like Air DNA to make sure this is a good market, and I would start with the host coast podcasts.
I also think it's important to remember there will be unexpected expenses and surprises. And to make sure you can do that. Or if you go in with partners, they can do that too. And remember, there will be unexpected joys too. I have just loved this journey. It was a journey of creativity. It was challenging, and we have this great home we can use and share.
That's amazing. Well, thank you so much Dominique. And just so you know, listeners, we did not ask her to mention our book. I actually ran across Dominique on a women investor forum. Somehow she realized who I was and she was like, "Hey, I read your book and now I have this great bay house." And it turns out we're almost neighbors. You put things out in the world to make people's lives better... and then every so often you bump into them online or in person and get to hear how great their investment turned out and how much joy they're getting out of it.
Are you someone who dreams of financial freedom through Airbnb investing, but you're stuck not knowing where to start? Maybe you've read the blogs, watched the YouTube videos, even scroll through listings, but you're still feeling frustrated and unsure how to get started on your investing journey. If you're realizing you need help, that's what Danielle and I do. Head over to hostcoach.co to book a free 30 minute discovery call with us to learn how we can help you fast track your Airbnb investing success so you can live a life that you love. Remember, remember our joy is your success!
