In the short-term rental riches will discuss investing in real estate with a specific focus on short term rentals quick actionable items to wire. Scale your portfolio I’m your host Tim Hubbard.

Welcome back to the short-term rental riches podcast where we talk about all things real estate but with a heavy focus on short term rentals and why do we talk with a heavy focus on short term rentals because they make a lot of money they are a great piece of a real estate portfolio I have different types of properties in my real estate portfolio commercial long term rentals and short terminals but short term rentals helped me become financially free much much faster than I ever could have with long term rentals welcome back that’s what we’re gonna talk about this week not necessarily my story but how many rentals it takes to become financially free and there are several questions that we have to ask ourselves here so just get right into in the first one is. What are your monthly bills that’s a good one that’s one we need to know and of course it’s different for everyone it’s different wherever we are in the world if we have the luxury of being able to work virtually then we can go to a place where the cost of living is lower but the quality of life is still high so that’s important we need to know how much money we need just to cover our bases but then we also need to answer the question how much money do we want to have on a regular basis so in this episode I’m just going to break down the standard $10000 a month because it seems like that’s what a lot of people in the U. S. anyways I have kind of strive for now with inflation maybe we should raise that up inflation’s going crazy but I’ll just stick with that number because it’s easy it’s round and I want to break down example between long term rentals in short terminals because it’s really crazy when you think about trying to retire these days with long term rentals and we’re talking like traditional single family long term rentals and of course this is not across the board there’s really good opportunity in some places but on average I’m gonna say that a traditional single family home right now might make like 200 Bucks a month end profit we’re talking cash flows so after mortgage after your interest after expenses and management maybe you’re making like $200 a month so if you want $10000 a month in cash flow how many properties is that has 50 properties. 50 single family homes that’s a time right that’s a lot to manage they deliver mortgages 50 different insurance quotes the jury knew and all time 50 different property tax bills 50 you know that’s a lot of properties and I’m not saying you can’t manage a lot of properties at same time I do I have more than that actually but if we’re trying to retire. With 200 is that even worth it I don’t know I got to ask ourselves this so that is a lot of properties and I want you to think about this if one of those properties is making $200 a month let’s say the AC goes out and what is an AC costs these days. Maybe $5000 that could be low forever you are maybe it’s slightly high in some places but I’d say that’s a pretty good average for standard size 3 bedroom home maybe 5000 to 7500 but we call 5000 how many months of your $200 cash flow income did not just the race 25 months 25 months that means if you have a single family home it’s cash flow in $200 a month in your AC goes out well you can kiss your profits goodbye for over 2 years because that AC just ate up all of our and that’s if you have no other maintenance issues along the way so we can see how this becomes really difficult now to have enough income from these traditional I’m takin traditional like turn key single family rentals now these are also not fully occupied all the time and I might say short term rentals aren’t either you know we we try to keep high occupancy rates unlike a long terminal where we may have a tenant that moves out maybe after 2 years maybe after 3 years we’re very likely going to have to paint that property again there’s probably gonna be lots of holes where that the shelving is and you know maybe there’s some damage in some places maybe after redo the flooring and let’s just say that cost $3000 well that’s another 15 months of cash flow that that property is not going to not going to give back it takes a heck of a lot of single family rentals these days that are making a lot of monthly cash flow to retire to become financially free and now one of my what I mean when I say retire I mean become financially free because. Retirement we don’t want to just do nothing for the rest of our lives right if we’re working our **** off it’s something that yeah maybe a break where we’re not really doing anything for a few months or 6 months or even a year but the longer it goes if you’re not really doing anything and you don’t have a purpose well you’re not going to be super happy and so I think a better way to look at retirement or financial freedom is and set upon retirement I heard someone say requirement as well it’s what we really want to do what are we passionate about and that’s what financial freedom gives us the ability to do so as a couple examples of single family homes over that $10000 a month mark in cash flow that’s 50 single family homes that they’re only doing 200 Bucks a month in cash flow now you may say to him but if I have 50 single family homes the markets go crazy they’re appreciated and I’m gonna be rich because of all the appreciation well yes you might be able to pull out some of that money and be rich or feel rich for a while but at the end of the day it’s a cash flow that allows us to live comfortably even if those properties one up 20 percent in value and you were able to pull out a chunk of money now remember. The money that you comply from lenders based on the rants of your rents and go up as much you still can’t pull that money out even though there’s equity there but once that monies out you know you’re still stuck with that low low monthly cash flow and if you raise your loan on the property take out more cash well then your cash flow is going to go even further down south yes I can buy time and but the end of the day we were looking cash flow right. Hey just want to ask you guys real quick favor if you haven’t already left this review if you wouldn’t mind heading over to iTunes or Spotify wherever you’re listening to the podcast and just leave us a quick review we really really appreciate it and if you know someone that you think would find value in any of the episodes that you’ve listened to you could just take a screen shot send it over to that’ll help them but it’s also going to help us grow a little bit too and lastly we’re on YouTube so if you prefer you to you can head over to short term rental riches and you can find us there as well thanks for listening in and thanks for all your great feedback. Let’s jump back in. All right now the fun part now we get to talk about S. T. R. short term rentals in my personal experience if you have been listening to show for a while hopefully have short term rentals are ready because we can take this number of 50 rentals and we can divide that into conservatively we could divide it 3 we could divide it and 5 what I mean is that we can operate a short term rental instead of a single family home and make 23 or 5 times the amount of our traditional rentals and I know because I’ve done it but lots of you know been doing it for years and in fact that this podcast apps today it kind of got triggered because I just did the a live event where we saw a bunch of my properties and it always reminds me that you know everyone’s at different stages in this journey and the live events a lot of fun because we get to see everyone in those stages so it’s it’s just really exciting I’m really excited about the short term rental industry still going forward I mean I’m more excited now than I was when I got started because the world has changed people are living more mobile than ever more people are working remotely they never have which means more peoples will be standing George mental self but it’s also exciting because the growth of this just allows you to scale my portfolio just has kind of blown up over the last 5 or 6 years because of cash flows are so much higher and I was able to to reinvest that money and now if if if we go back to that appreciation example you know haven’t 50 homes and pulling money out well we can still do that we short term model so we don’t have the giant vacancies we can still get the appreciation we get much higher cash flow and if we have these giant you know AC systems that go out or you know a crack in the foundation or something like that while we can get higher cash flow back to recoup those expenses. So I think the opportunity is incredible short term rentals not to mention if you are a U. S. citizen which most of our listeners are I think we have the best opportunity in the world I own property and to other countries outside of the U. S. we can’t get financing as foreigners in other countries it’s very difficult I should say so we have the lowest interest rates in history and you the U. S. gives us the ability to borrow and leverage these deals for 30 years fixed that is incredible so we have an amazing amazing opportunity here in the U. S.. So hopefully you have a number in mind and if you get into the short term rental industry if you’re not already in it I think you’re gonna find that you can hit that financial freedom mark much faster than you ever thought possible a little more insight into short term rentals hopefully guys are doing well out there and until next time. Under full day. There’s so much money to be made the short term rentals but it all starts by having the right property if you guys haven’t yet seen my free ebook on our website rest methods.com head over there and get a copy it’s going to break down what I look for in a property in some great short cuts so that you don’t have to spend hours and hours researching at over rest methods.com and you can grab your free copy there if you want a crash course in everything I’ve really learned to short term rentals in over 5 years managing over 15000 Gasol recorded on our last live event and I’m happy to say we broke it down really nicely into a bunch of different modules that you can watch at your own pace it takes you from start to finish from finding a property we talk about analyzing the property but then also some of the more important pieces how to find your team and how to set up everything so that you can run your operation is passively as possible and free up your time you can find that it rests methods.com forward slash virtual.

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