Investing in Airbnb Rentals with Andrew Keene

In this episode, Bill talks to Andrew Keene, CEO of Alpha Shark Trading. Andrew started trading in Chicago before quickly deciding to jump out on his own and start a company. Today, he’s not only a contributor to CNBC and the author of three books, he’s also a successful AirBNB host. Listen as Andrew shares how his experience in trading helped him to become a leading AirBNB host and short term rental master.

Time Stamped Show Notes:

  • 00:07 – Bill introduces Andrew Keene
  • 01:25 – Andrew has been a trader for a long time
  • 01:36 – There’s always an alternative investment
  • 01:49 – Andrew bought a place in San Diego
    • 02:03 – “San Diego is very profitable”
  • 02:30 – The return on investment for $350,000 is 35%
  • 03:10 – There’s a petition in San Diego to ban short-term rentals
  • 03:50 – Andrew is comparing a lot of smaller units
    • 03:55 – If you put a one-bedroom and two-bedroom unit in AirBNB, the price is relatively the same
  • 04:25 – “Chicago is a little bit difficult because you’re going to kill it in three months”
  • 04:37 – Andrew’s cash flow from his San Diego property
  • 04:57 – 80% of the people on AirBNB are just trying to get an extra income—that’s it.
  • 05:02 – One of the biggest problem with AirBNB is this—it’s under almost constant litigation
  • 05:16 – 20% of the AirBNB hosts are “Super Hosts
    • 05:43 – Andrew has yet to become a Super Host, but he is trying
  • 05:54 – Advantages of being a “Super Host”
    • 06:08 – AirBNB will promote you
  • 06:27 – Andrew is starting a fund
    • 06:37 – Andrew has a personal account from trading
  • 06:57 – The big thing is litigation
  • 07:05 – AirBNB is currently suing San Francisco, where they started
  • 07:17 – Cities like New York are a little risky
  • 07:28 – People are now after a premium for a house because you can AirBNB it—it’s inflating the cost for 1st time homebuyers, particularly urban home buyers
    • 07:34 – If AirBNB gets shut down, you can still sell your unit at its original price
  • 08:00 – ROI is still there in long-term rentals
  • 08:06 – Premium for AirBNB is new and fresh and people don’t know about it
  • 08:11 – There’s an AirBNB conference in San Francisco next month AirBNBopen.com
    • 08:24 – There will be about 6,000 hosts from around the world
  • 08:30 – “There’s a whole ecosystem around AirBNB now like there’s an ecosystem around Uber”
  • 09:10 – Andrew is treating AirBNB rentals as a long-term investment
  • 09:35 – Andrew doesn’t believe in the stock market as a long-term investment
  • 10:37 – Bill discussing Adam’s take, from the last episode, on property management and AirBNB rentals
  • 11:06 – Bill’s team is currently working on the pitfalls of AirBNB
  • 11:30 – How do you become a hotelier and a real estate investor at the same time
  • 12:00 – Andrew puts only a percentage of his net worth to AirBNB and not 100%
  • 12:30 – There are guests who stay longer than 3-days and make a copy of the key so they can go back at the property
    • 12:38 – Electronic key is an option for keyless entry
    • 12:53 – Nest
  • 13:00 – Apps coming out for AirBNB
    • 13:05 – Cleaning services app
  • 14:10 – Do you think AirBNB will go away?
    • 14:19 – “No. They are fighting and they have enough capital to have huge legal fees”
  • 15:05 – There are hosts denying guests
    • 15:30 – Charge the cleaning fee and service fee
  • 15:45 – Instant booking is getting popular
  • 16:35 – Andrew has never rejected a guest
  • 16:40 – Andrew is using ReVestor and is impressed with it
  • 17:17 – How ReVestor help with the negative stuff
    • 18:09 – “Think about the worst case scenario”
  • 18:20 – Books that Andrew recommends
  • 18:48 – Andrew’s occupancy rate is 92-95%
  • 19:00 – Andrew’s cash flow is $20,000 of $70,000
  • 19:59 – Connect with Andrew through his email

3 Key Points:

  1. Nothing in life is not guaranteed, and it sure as heck won’t be easy.
  2. There’s a whole ecosystem around AirBNB, just like there’s an ecosystem around Uber—that creates long-term stability.
  3. There’s always an alternative to traditional investments.

Revestor will run the average daily/monthly rental rates and average occupancy rates over live listings / homes-for-sale and will show you the properties with the most profit potential. View properties by the highest cap rate and cash flow. The platform will then allow you to adjust the numbers accordingly on each listing (see an example of this in action at the 17:30 mark of the video). Sign up for a free account here.

Resources Mentioned:

Credits

Comments

Leave a Reply

Your email address will not be published. Required fields are marked *