One of the keys to quickly becoming profitable with your airbnb business is streamlining the start-up process. The moment you close on a new property, the bills start coming in and it’s imperative that you create revenue as quickly as possible to expedite those costs. A solid plan will help you to become cash flow possible in the shortest amount of time.
When I’m working with my Austin area short term rental investor clients, I advise them to begin this process quite early. As soon as we are through the option period (the time in which a buyer can do all necessary inspections, negotiate the terms of the contract and terminate for any reason) it’s “go time”. What I mean by “go time” is now is the time to start getting quotes for any repairs or improvements to the property, come up with a furnishing plan, and get your key people on board. Although all timelines are negotiable with a Texas real estate contract, the standard sales timeline usually involves a 7-10 day option period immediately following execution of the contract and a closing date approximately thirty days after the execution date. Thus, “go time” gives you approximately 20 days to get everything in order so you can hit the ground running by the time you close.
Planning Repairs and Improvements:
If you intend to make any repairs or improvements to the property, it’s best to start planning these projects before you close on the property. Typically, I see my clients adding accent walls, making minor modifications to rooms to convert offices/dining rooms into additional sleeping spaces, or adding pools. Almost always you will at the very least be adding electronic locks and an interior lock for your cleaning closet. While you can’t start actually making repairs before you close on the property, you can get quotes from various contractors, determine your designs, colors, finish-out selections, and get a start date on the books from the most qualified contractors. If any materials need to be ordered they can be purchased in advance and delivered on the closing date. This way, as soon as you close on the property, your contractor can get to work. If you wait until you close to even start looking for a qualified contractor, you will be burning money waiting for the projects to be completed while your Austin airbnb could already be making you money.
Develop a Furnishing Plan for Your Short Term Rental:
When embarking on the journey of creating a profitable short term rental property, you will want a comprehensive plan for creating a welcoming and functional space that appeals to guests. To streamline the process, it is essential to establish a solid checklist that encompasses the necessary furnishings, decor, and amenities. This checklist should cover everything from essential furniture pieces to kitchenware, linens, and decorative elements. Hint, we have a template you can download for free here. Make sure to measure the key spaces in each room so you can determine the appropriate furniture sizes, and then start procuring. Most big furniture items won’t ship at Prime speed so placing these orders now ensures they can be delivered immediately after closing. If you live in the same city as your investment, consider shipping your smaller items directly to your home or simply add them to your cart if the shopping times are short and then place the order right before closing. If furnishing everything you need for your STR seems like a daunting task, you may want to consider a full-service furnishing company. These professionals not only bring expertise in interior design but also alleviate the burden of sourcing, purchasing, and assembling furniture. Feel free to reach out to us if you need recommendations for such companies.
Identifying Your Key People:
Last, but certainly not least, you want to make sure you identify your key people before you close on your short term rental purchase. Your key people will be either your cleaning company and handyman or your management company. If you will be self-managing your STR, you will want to identify a reputable cleaning company and handyman. These individuals will be your eyes and ears on the ground, and they will make or break your short term rental investment. It’s imperative that these individuals are reliable, competent, and trust-worthy. Interview candidates in advance of closing so that once your property is live they are ready to handle your day to day needs. Alternatively, if you opt for a full-service management company, they will handle your cleanings and repairs. Thus, you simply need to identify the most qualified management company for your STR. We have relationships with a plethora of qualified STR managers and are happy to connect you with the most appropriate one for your specific property.
Whether you are buying your short term rental investment with cash or financing, it’s imperative to get your investment up and running as quickly as possible so you can become profitable. However, if you are using a loan to purchase your property, the goal should be to accomplish all of these tasks before you close on the property so that you can get your investment live on the listing sites within weeks of closing, and then have rental revenue coming in before your first mortgage payment is do, usually about two months after the closing date. If you come up with a solid action plan using this post as a guide, you can considerably decrease your start up time, and accelerate your path to profitability with your STR investment.
