Real Estate Investors Association of Greater Cincinnati

There’s a dark secret that many investors know but that no one seems to talk about much. It’s a secret that every full-time investor eventually discovers for himself or pays the consequences. 

To illustrate, let’s take 2 imaginary real estate entrepreneurs, Investor A and Investor B. For the sake of simplicity, let’s imagine that both investors start from the same place. Same income, same credit, same skill level. Then, both attend a real estate conference one weekend in hopes of finding a way to quit their jobs in short order and become full-time real estate entrepreneurs. 

The story of Investor A 
Investor A latches on to a landlording course. He’s attracted to the idea of building wealth and loves the tax-advantaged nature of rental properties. On Monday, he sets out to build a rental empire that will allow him to become financially independent in short order. 

“A” is very successful in finding under-priced rentals in his hometown. His typical deal looks like this: 

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I don’t want to be a buzz kill…

…but there’s too much mushy thinking in the short-stay space. 

So much so that I see short-stay landlords acting like home-sharers — and having a lot of fun doing so.

However, if you check their bottom lines, you’ll see they aren’t doing much better than passive landlords. And doing extra work without capturing extra income is not the way to run a for-profit business.

As a foaming-at-the-mouth Airbnb-er since 2011, one who is both a provider and user with stays all over the United States, let me offer a bit of structure.

Three Short-stay Business Models 

You need to be crystal clear about which type of short-stay business you’re operating.

The table below summarizes the financial goals of the three models
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Landlords have always had the ability to woo business travelers to their rentals. 

But now that online travel agencies such as Airbnb, HomeAway, and TripAdvisor have gone mainstream, it’s easier than ever!

Let’s define a corporate rental as dwelling that’s lease directly to a company or a business traveler who has a housing allowance. If a company is paying for the rental, and not the tenant,  then it’s a corporate rental. 

When a company pays their employees or contractors to work remotely, then that tenant: 1 – Will behave and not embarrass their employer

2 – Will have a binary attitude towards your rates. Either they are within their allowance or they aren’t.

These two characteristics make business travelers the most lucrative and ideal people for your rentals.

The Opportunity

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