Episode 024 – Three Important Steps for Newbies

Michelle gives Newbies three important steps and a couple of more for good measure.  These are things you really want to make sure you do when you are just starting out in your short-term rental business. 

Plus, contest details are inside this episode!  Enter to win BIG!!  Go and Grow!

Transcript of this Episode:

Hi, this is Michelle, the master of money mindset, and you are listening.

BNB dash boss podcast. And in today's podcast, we're talking to the newbies, I've got three things you need to do everything else can wait, stay tuned. Our show today is brought to you by audit. Audible is where you get your audio books online and get a 30 day trial into the audible membership for free.

By going to audible trial.com forward slash S T R revenue that's audible trial.com forward slash S T R revenue. You'll get your first audio book for free and 30 days into the audible membership just for trying us out. You'll love audible. Right [email protected]. You can find our $7 courses available for you to try out, find out how to cohost, how to do rental arbitrage, or how to invest in real estate.

We're all three, by going to B and b-boss.com and clicking on our store. And you'll find our $7 courses right there. Try us out. You'll love it. You'll love those courses. And they're only there for a limited time. Also, don't forget our contest. We've got our contest running right now and every week we're picking up.

And everyone's names are going to be put into a drawing at the end for a final prize of an Amazon Dodd with a little clock on it. And your guests will love that. There'll be able to walk right in, ask Alexa to connect to their account, and they'll be able to play their favorite music, ask for the weather or whatever else they want to ask Alexa to do pretty darn awesome.

And I would really greatly. You going to iTunes and leaving me a five star review. I appreciate it. So please do take a picture of it. Send it over to me at Michelle at BNB dash boss. Let me know that you did and we'll enter you in those drawings. Okay in newbs. We're so glad you're here. I'm Michelle Russell.

And I am going to teach you a little bit about starting your short-term rental. The very first thing you need to know is that your insurance on your property, whether it's renter's insurance, that you're renting and doing a rental arbitrage or a property that you own. Your insurance is probably not going to cover your short-term rental, unless it is specific to short-term rentals.

That is the most important. Airbnb is going to flaunt their $1 million policy at you. Oh, look at our beautiful $1 million host protection policy, and guess what? It's completely and totally at their discretion. Sometimes they will give you what you asked for. And sometimes they will not. And there are horror stories out there.

You don't want to be left high end. So you want to get your own insurance? We did an entire episode on insurances. I do recommend you listen to that, but if you want to take a shortcut, just go to our homepage and you can download a list of insurance agents. That you can use that are specific to short-term rentals.

You want to get started in that you've got to protect yourself and do that right away. That is the number one, one thing. Okay. Number two thing that we want you to do is get your messaging, right? Order when you first get started, the thing that's going to take you a lot of time, are all the people messaging you when you list your.

Now you've taken the pictures. You've gotten a professional photographer, I hope. And you've gotten your place all decked out and cleaned up and you got a professional photographer in there and they took the pictures. You've listed. It, made it look all enticing. They're on Airbnb. And, and you're going to start getting requests.

Now requests come from the people who do not have instant book. I do recommend you use instant book. Number one, when you're new, they're going to place your listing higher. So keep your rates kind of low to get started until you get a lot of reviews. Right. But then you're going to raise them up and I'll tell you about that in a second, but you also can get placed even higher in the rating.

If you allow something called Insta book and you can let people instantly book with you as long as they've had positive reviews in the past, and they are verified guests on Airbnb, and that's pretty easy to do. So I do recommend that you do that. If people have stayed with Airbnb a few times and they have positive reviews, yes.

You want those kinds of guests you really do, but then you're going to get requests from people who aren't. They might be new. They may have stayed or not stayed in a place, but they don't have any reviews. These people will have to request a booking with you. And you're going to have to learn to be a little more careful with these type of people.

You don't know what their intentions are. You don't know how they've behaved in a property before, because they've had no reviews from other hosts that will let you know how these people have been handling somebody. Else's. So you have to be really careful, but you'll start to notice that there's a lot of dialogue going back and forth, and that takes the most time away from you when you are first getting started, there's a lot of messages that you have to have out there.

We have an entire episode on short-term rental revenue in regards to messaging. But the most important thing is go to our [email protected] and right there in the front. If you scroll just under the little welcome thing, you'll see three free gifts that we have for you. And one of those is messaging.

It's super important. It's like a seven page PDF that you can literally cut and paste. Those messages will go out. When people are requesting a booking, it will go out automatically. They will go out before the people arrive with your house rules. They'll go out the day. Somebody does arrive with maybe your house code on it, your key code.

They'll go out to make sure that they checked in. Okay. The morning after. They'll go out the day before they leave to remind them of your checkout procedures. And then they'll go out after the, have laughed to ask them how their stay was. If they can give you any insights on your stair, things that they think you can do to improve what you've done this whole time, you're going to be asking them for five star reviews.

If you listen to that episode on messaging and you use our messages and you use a company like smart BNB, You can really save a lot, a lot of time in this way. You can answer just specific messages that need your attention. You're going to put the messaging right on your phone. So you're get this cool little Dean.

Whenever somebody has left a message on Airbnb. When you get that ding and you look at your phone, you can see what they wrote and you can look at your automated messages and see if it replied to that. If it didn't reply, then it means that it was something that needs your attention. Sometimes it will reply and say, Hey, we're looking into your booking, we're checking our calendars.

And we're going to get back to you. The whole thing is you've replied really quickly to them. And that will help you become a Superhost because how fast you reply and the fact that you reply to every single message ranks you higher. And that is part of getting to be an Airbnb Superhost is the fact that you reply to everyone and you reply quickly to everyone.

So the automated messages help with that automated messages are really important. And if you have any trouble with that, just message [email protected]. And we'll be happy to answer any questions or go on her Facebook page and ask questions right there in the BMB boss, Facebook page. And we'll be sure to answer your questions for you.

The number three thing is going to be dynamic pricing. And that was the last episode we did. We talked about dynamic pricing, but dynamic pricing. When you get started, you have no idea. Just today. I was scrolling through a Facebook group. I saw a message where somebody said, can you believe this Airbnb will send an automated message to you when you're getting started?

Don't listen to them. Okay. Don't listen to Airbnb. They want you to use their dynamic pricing it's way too low. You never want to use their prices. Number two, they'll say, well, you should offer people a 24% discount on a week stay, which is obnoxious. We would never offer anything more than seven to 10% at the most.

And that's only if it's really close to the day. Otherwise, we don't offer big discounts like that, but somebody had posted a picture of Airbnb, his recommendation for a month long discount of 64%. You're like, are you kidding? Cut your rates in half or more for Airbnbs of the vacant, have a booking. No, thank you, Airbnb.

They don't care about, you just know that they care about the bookings and they make money. No matter what you do. You need to make money on your property. So don't over discount. Your properties, discount them a little when you first get started, but that's it. You don't want to go too crazy. You want to get them booked with good people.

Good guests inside. Get your, a few reviews under your belt and then dynamic price away. Dynamic pricing can make you 40% more than what Airbnb would otherwise have you be making. And that's going to put a lot of extra income into your property. So some bonus things I wanted to tell you about. Our cleaning questionnaires.

You really need to download that another free resource or you, but it's going to be questions that you can ask your cleaning companies. When you're looking for cleaning crews to help you. And there's a checklist in there also of what to clean and how to clean it. That's really good for you because you need to find cleaning companies that specialize in short-term rentals.

There's a lot of differences. Most cleaning crews. They won't go through the refrigerator. They won't even touch. And you need a company that will, you need a company that will work seven days a week because probably in our area more than a third of our checkouts in Arizona are weekend checkouts. And more than half of them in Florida are weekend checkout.

So you have to have cleaning crews that work on the weekends. It's imperative. So there's a bunch of questions there that you're going to have to ask, and that's really, really important for you to do so download that questionnaire it's right next to the map. Believe it or not, which is right next to the freebie on the.

So, boom, boom, boom. Right there. You, you hit all your big points. One big bonus thing is you need to go through your house rules, your house rules have to be complete, whatever you have in your house rules. If it's in writing it's law, basically. But if it's not in writing, you can't imply. Or for instance, you can't put like a no smoking sign in your place, but not have anything about non-smoking in your house rules and expect people to pay any damages, simply because you have a sign doesn't work.

So you have to have it in your house rules. If it's not written, it doesn't exist. So your house rules have to be really thorough. We have. An article about house rules. I recommend you read. And we also have an episode about house rules. That goes very, very in depth. Make sure your house rules are air tight, because this is going to make or break everything that happens in your property.

So you've got your insurance, you've got your messaging down. You've got your dynamic pricing and your house rules. Now, when it comes to your business, Remember to treat it like a business. You want to form an LLC as soon as you possibly can to protect the business. Right. And if you. Your own real estate property.

If it's your property, you may want another LLC for the real estate portion. So have your BNB company rent from your real estate company, that way you you're making money and you can be taxed on either of those. Not both because otherwise you're going to be taxed way too much. Your real estate is going to get to write off a bunch of stuff that your BNB business would not.

And so having two different companies, that's going to save you a lot in taxes and you want to get that done. Also, it's going to protect you in case somebody sues you, all your other assets, like your house and your car and everything else will be protected. They won't be able to go after you as a person.

They can only go after the real estate as a company and you will be protected. We've got a great interview with Carolina Alverez and the short-term rental revenue podcast. And she's an attorney. She goes over all the information about LLCs. If you want to take a list. And I think we had to break it up into a couple of them, but basically just get yourself an LLC.

You can form that by yourself. It won't cost you that much. If you don't have the time to do it, go to something like legal zoom and get it done. Go to your CPA or an attorney to get it done, but do get that done as soon as you possibly can. And that's going to protect your assets and then you want to get a good bookkeeping system.

You want to start keeping track of your records. You want to have a bank account with your company and the EIN number of that company. And you do not want to co-mingle. Which means the money that you make and earn and spend on your short-term rental cannot be mixed up with your personal funds. So you can never take your business card and go to McDonald's or grocery shopping and vice versa.

You never want to take your personal debit card and go buy business expenses anymore. You keep those completely separate and you never co-mingle. Those. And that will protect your LLC. You never want to Pierce that corporate veil because when you break those rules, you do something called piercing the veil.

And when you Pierce the corporate veil, the courts will not uphold the fact that you have a corporation protecting you and your family against being sued. So if somebody goes to Sue. And you've been commingling funds all along then. The judge might say, well, you know what? Look at this. They never followed the rules of it.

There look at all the times they've pierced that corporate veil here. Therefore the corporation does not hold and we're going to let them Sue you so they can take your house, your cars, any of your assets. So you never want to Pierce the corporate veil. Okay. So that's really, really important. Boy, I zipped through these things.

Getting started as a newbie. It's not too difficult. It's, it's actually a lot of fun. You're going to make a lot of mistakes. No worries. Because that's how you learn. Mistakes are honestly the best way to learn. You'll have a lot of great experiences and a lot of great guests staying with you. Make sure that all the ones that are the good ones that you write them down so that you remember on the very rare occasion, when you have a bad one.

What, what it means to you to have the good ones, right. Just be really, really grateful for all of that. And if there's anything you need, like I said, make sure that you contact [email protected]. Go to our website, go to our Facebook page. We'd love to help you out. And if there's anything else we can do for you, let us know.

We also have $7 courses on our website. So for seven bucks, there's all kinds of forms and stuff in there that you can get. It's a great deal. So if you feel like suspending $7 to learn a little bit more, definitely go on there and get yourself a little bit of education. Thanks so much for listening today.

Have a great day. God, bless you. Go and grow.