Guest Post: Airbnb+Investing - How just 1 property allowed me to Retire Early & Travel the World!

Here is Jasper teaching a workshop at the 2016 Airbnb Open, where we met.

Here is Jasper teaching a workshop at the 2016 Airbnb Open, where we met.

I first heard of The Traveling Dutchman, Mr. Jasper Ribbers, while doing some research on literature written on the subject of Airbnb hosting, as I was considering writing a book on the subject. Jasper happened to have the best selling book on Amazon, a youtube channel, and a travel blog. Wow.

 

Months later, a friend of mine who is a notably talented internet marketer, asked me to do an exercise where I listed three companies/individuals that I would like to use as models for how I would shape my growing business. I listed Jasper Ribbers, Bigger Pockets, and Paula Pant of Afford Anything.

 

As some of you know, I’m a big advocate of visualization and manifesting, so I was excited to do this process. I just didn’t realize how powerful of an exercise this one was. All in the span of the next 4 months: I had coffee with Jasper and was asked to be a guest on his podcast, I was invited for lunch to the podcast producer’s house of Bigger Pockets and offered a guest spot on their show, and got paired up to do a workshop with Paula Pant’s close friend which led me to get connected with Paula.

 

Jasper has a inspiring, ever-evolving Airbnb success story and a new book coming out soon, so I thought it would be a perfect opportunity to have him share his tale with you. Enjoy!

 

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Jasper's Story

When I quit my finance job in 2010, I wasn’t planning on an early retirement. I simply realized that an increasing number on my bank account didn’t provide me with enough fulfillment to justify spending nine hours a day in an office building.

 

I wanted something different, although I wasn’t sure what exactly. All I knew was that my most memorable experiences took place during my travels, so traveling seemed like a good place to start. Since I didn’t have enough savings to last for more than a few years, I figured I’d go back to a job at some point.

 

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I did have one source of income: my two bedroom apartment in Amsterdam. I had used the money I made as a trader to pay off the mortgage, so the rent I was receiving, about $1500 a month, was basically my net income. It wasn’t enough to support my travels though, and I didn’t like the fact that I could never stay at my own place when I was back home.

 

In 2012 I was in Brazil with a good friend, looking for accommodation. He suggested that instead of staying in a hotel, we could try staying in someone’s apartment, using a new website called Airbnb. The concept immediately intrigued me and I realized it could provide a much better solution for my apartment in Amsterdam. I expected to make more money and I could stay there myself whenever I wanted.

 

The start of my Airbnb journey

I was fortunate that my renter decided to end his lease and move out soon after I discovered Airbnb. I flew back to Amsterdam and not long after I welcomed my first Airbnb guests. I spent the next months reading everything I could find about how to improve as a host.

 

As my Airbnb hosting skills improved, so did my income. I was grossing about $5,000 a month and I was really enjoying the hosting experience. For the first time since I had quit my job, I considered the option of never returning to the corporate world. It felt great.

 

I started sharing my Airbnb hosting business with friends. Many had never heard of Airbnb, and they were shocked that I was able to travel and support myself just by renting out my 800 square feet apartment. I helped a few of my friends setup their Airbnb listing and soon enough they were seeing great success as well. This, in combination with the fact that a lot of Airbnb listings at the time didn’t look very good and the lack of good resources on Airbnb hosting, inspired me to write my book, Get Paid For Your Pad.

 

In order to promote my book, I started a podcast and a blog. For the first few years, I considered it a hobby, but as my audience grew I realized I could turn it into a business. My goal now is to grow this business and to be able to make a living off of it.

 

In recent years the authorities in many major cities across the world have been pushing back against the rise of Airbnb and other short term rental sites. Amsterdam was no exception. Airbnb was being blamed for rising real estate prices and rents, as well as disturbance caused by tourists staying at Airbnbs.

 

This eventually led Airbnb to strike a deal with the city of Amsterdam to restrict hosts from renting out entire homes in the city. In the Spring of 2017, Airbnb enforced a 60 day limit on the platform for hosts in Amsterdam. This left me with me other option than to sell my house, as I didn’t want to go back to renting to long-term tenants.

 

Colombia: my first Airbnb investment abroad

While I was in the process of selling my house, I started searching for properties to re-invest the proceeds from the sale. The lesson I learned from my hosting experience in Amsterdam is that it would be smarter to diversify in multiple properties versus buying one property. My plan was to invest in three different properties, in different countries, and to invest between $100k and $150k per property.

 

It made sense to invest in places where I could see myself spending a few months a year. That way I could live most of the year in my own properties, and rent them out when I would be out of town. This immediately shifted my focus to South America and Asia. For a digital nomad, these are attractive areas as the cost of living tends to be low and the climate attractive.

 

As for the type of properties, I preferred two bedroom apartments. These tend to do well on Airbnb and it gives me the flexibility to either host friends or rent out the spare room while I’m staying there. That way I could earn a profit even when I’m using the apartment myself, plus I could gain experience as an Airbnb host sharing a space with the guests, something that I hadn’t experienced before.

 

So I packed my bags and took of on a trip to South America. I started in Brazil, then went on to Chile, Colombia and Panama. I looked at multiple properties and did a lot of research about the feasibility of running an Airbnb business. The most important factors that I considered were the legal and juridical system, the regulation with regards to short term rentals and the potential profitability.

 

Cali, Colombia

Cali, Colombia

I ended up opting for a two bedroom penthouse in Cali, the third largest city in Colombia. The property is located in the most attractive neighborhood in the city and features a rooftop overlooking the area. It was priced at under $150k, including a complete renovation, all furnishings, decorations and everything else you need. In short, it would be delivered ready to receive the first guests.

 

What’s next

In today’s world it’s hard to find a good return on investment. Real estate prices are back at the pre-crisis highs, stocks are at all time highs and interest rates are at historic lows. Investing in properties that are attractive to short term renters appears to be one of the best ways to go.

 

There’s decent returns to be made, I believe a non-leveraged return of 6% to 10% after costs is achievable, in some cases even more. Profit potential is very situational though, and depends on a lot of factors, more so than long-term renting. Any day the regulations can change and Airbnb hosting made impossible. The results also depend on the amount of effort put into creating the best guest experience and how well other hosts in the area are doing.

 

To help investors decide in which properties to invest, I’m currently writing a new book on Airbnb investing. It’s projected to come out in the spring of 2018. Other than advise on location and type of property to invest in, it will feature case studies from Airbnb hosts who’ve already invested in an Airbnb successfully. One of the hosts who will be featured is your very own investment specialist, Zeona McIntyre. If you want to receive updates on the publishing of the book, you can sign-up for my newsletter.