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In 2017, I purchased a single-family home and listed it on Airbnb as a short-term rental. Several years and additional units later, the venture grew into a full-time business that now gives me around $150,000 per month. I could say I had a good ride.
But the journey to this success wasn’t smooth. There were many things that I wish I had done differently, especially when I was just starting. And while some might say they’re part of the whole experience, I still won’t recommend them to anybody.
And that is why I want to share the things I wish I had done when I was new to the Airbnb industry. These lessons impacted how I did my business, and if you’re starting on your own, these will be helpful for you too. The following are the three things I wish I knew as a first-time Airbnb host:
Related: 10 Pieces of Financial Advice I Wish I Knew in My 20s
1. An “employee mindset” won’t get you far in the business
Now, I don’t have anything against employees. They’re awesome because they are the foundation of our labor force. I started as an employee myself, and I have a staff who helps me with my business too.
However, if you want to create a flourishing Airbnb business, you don’t need the kind of mindset that most employees have. Allow me to explain.
When I started my Airbnb business in 2017, my wife and I operated our unit, and we had no trouble doing so. Our profits were more than enough to cover our mortgage for the first three years.
However, the struggle started when we decided to do all the cleaning ourselves. At that time, we didn’t think it was necessary to hire help because we could always do the cleaning on our own. Plus, we thought it was better not to pay anyone and keep the profits to ourselves. But we couldn’t have been more wrong.
As days and months went on, we realized that we should have done things differently. We spent so much time cleaning our Airbnb that it was draining. Sometimes we’d be tired from appointments, and we still couldn’t rest because we had to clean our unit.
It was then that we knew the business became another 9-to-5 job for us, and we were operating with an employee mindset. We wanted the job done right and to make more money, so we thought we had to do everything ourselves.
But this employee mindset didn’t get us far, and neither would it be for you. The Airbnb business requires effort, and if you’re not careful, it could drain your time away from the most important things you should be focusing on. Instead, I recommend you get people who can make the work easier for you.
Don’t hesitate to use some of your profits to hire help because, in the long run, you’ll benefit more from it. It’ll free up your time, and when you have more time, you’ll get the chance to focus on growing the business. You can even launch a new Airbnb if you want to!
Related: How to Start an Airbnb Business Without Owning Property
2. Delegation is the key to time freedom
This is in the same context as the first lesson I mentioned, but it’s so important that it bears repeating.
You see, there are three primary operations in the Airbnb business: cleaning, maintenance and communication. Now for your business to thrive, you have to take care of these three areas equally. But this would be extremely difficult, especially if you have more than one unit and you’re doing all the operations alone.
People will check in and out of your Airbnb, so cleaning and maintenance need to be taken care of regularly. The problem when you’re doing those things yourself is that you are trading time for money. This is why you need to delegate those tasks and automate them for your work to be easier.
You can hire people to do the cleaning and maintenance for you, create an automated cleaning and maintenance calendar that they will follow, and you’re good to go. You can even get a virtual assistant to help you on the communications side.
This is how million-dollar entrepreneurs operate their businesses: by building a team and a system, hiring, delegating, and automating all the operations. And I wish I had known this sooner.
3. Collecting a 1099 Form will reduce your taxes
The IRS 1099 Form is a collection of tax forms that you have your subcontractor sign so you can take what you pay them as a tax deduction. This applies to the people you hire to clean, do the maintenance, and do your communications. As long as you pay them $600 or more within the same calendar year, you must collect a 1099 Form from them.
This is something that I wish I had known when I was getting started. I didn’t know that I needed to collect a 1099 Form, so I ended up paying for money I didn’t keep.
Now to be fair, no one told me about it then, so I didn’t know. But now that you have an idea make sure to implement it to protect your profits so that you won’t lose out in the end.
Related: 8 Ways to Save Money on Business Taxes
Making mistakes as an entrepreneur is perfectly normal, especially if you’re new. However, no rule says you must make blunders for the sake of experience.
Instead, you can learn from those who have already been through the same struggles and learn from their backgrounds. After all, success leaves clues. By learning from the experience of others who have overcome similar struggles, you gain valuable insights and avoid unnecessary pitfalls.
So take advantage of the wealth of knowledge available to you, and start building the business of your dreams today.