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How We Got to Financial Independence Through Real Estate

Susan and Boris reached out to me a few weeks ago, wondering if they could tell their story around financial independence through real estate. I have loved the thought of real estate since I was a teenager and still aspire to retire via real estate at some point. I couldn’t help but drool over her story and secretly wish I was the one telling it. But alas, I’ll have to wait to tell my story a little later in life. For now, here’s the real deal from a kick-butt couple. Enjoy!!

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Susan and I met at a travel workshop that I was hosting over 6 years ago. We started getting to know each other due to the common passion for traveling. Both of us were working full time. And, we were managing to squeeze time out of our 18 vacation days every year to travel to places like…

  • France
  • Netherlands
  • Uganda
  • Cambodia
  • China…

…as well as many more places.

financial independence through real estate

The more we traveled, the more we knew that we wanted to find an alternative to the traditional 9 to 5. We’re both workaholics and truly enjoy work, but we wanted to have the flexibility of deciding how and when we’re going to work AND be able to control our own schedules. Here’s our story on financial independence through real estate!

How We Got to Financial Independence Through Real Estate

A few years into our travels, we decided we wanted to take a year-long trip together traveling across Central America and South America by car. It was a dream trip for both of us! We spent about a couple of years thinking and planning for it. Of course, one of the most important factors was to determine how to support the trip financially.

For us, it was important not just to save up for the trip, but also to have the financial stability of an ongoing income. That way, we’re not simply burning through our savings while we’re away. It was important to do it in a way that didn’t put our whole financial situation on hold for a year.

To make it happen, we needed to develop a strategy for continuing to have passive income coming in even if we’re traveling or away.

Airbnb Enters the Picture

When the goal was clear, we started to consider what options were available to us to generate additional passive income.

One concept that we kept coming back to multiple times was Airbnb. We’ve always been avid users of Airbnb as guests for years. 

We had stayed at numerous Airbnbs in the past and always had great experiences.

We stayed at:

  • a very cozy boathouse in Seattle,
  • a cool treehouse in Latvia, and a
  • colonial house filled with history in the center of Shanghai.

Sometimes we shared space with hosts and learned stories from them. And, sometimes we had the whole space to ourselves and it felt like we were home.

We’ve considered what it would look like if we started to host other people. We toyed with this idea for years, but we’re always a bit unsure about the next step and whether we wanted the hassle associated with becoming a host. After all, at that time, we already had our plate full with full-time responsibilities. 

Coincidentally, around that time, I purchased my first apartment. So, after a bit more consideration, we decided to do an experiment with it and list a few bedrooms on the platform.

There were a few things that were important to us from the outset. We wanted to design this in a way that would allow us to manage it in addition to the other full-time commitments we had, as well as operate it remotely when we would be spending time outside of the U.S.

save money on your home insuranceSo what did we do?

Both of us come from a tech and marketing background, so we wanted to approach this in a very systematic, data-driven way and augment the experience with technology wherever possible.

We spent about a few months:

  • studying the market
  • learning about the tools available
  • setting up the bedrooms
  • looking for and hiring a local housekeeper to help us with the turnovers.

And then we launched it.

To our great surprise, even though we were just renting out private bedrooms with shared common areas and bathrooms, we got our first reservation within an hour and they continued to come in steadily since. That month, we ended up generating over $7,000 in monthly revenue from our apartment.

This blew us away!!

This was about the size of my monthly paycheck. Yet, we were able to generate this all on the side with a fairly limited time commitment. 

As the first month came to a close, we already knew that this would be a game-changer for us.

Related: 10 Ways to Find a Deal on Real Estate

How We Set Things Up

What we want to focus on next is to talk a bit about how we’ve actually set up the property because this can be helpful to anyone else who is considering doing it. This is how you can start focusing on finding your financial independence through real estate.

When we went live, we realized pretty quickly that if you simply start and proceed to handle everything manually, it can quickly become overwhelming to manage it….especially for anyone running multiple properties. In fact, it’s almost impossible to really scale it if you’re doing this all on your own – you’d essentially create a full-time, 24/7 job for yourself.

So we’ve considered how we can automate various aspects of hosting.

These typically fall into several categories: 

  • Automated Check-In and Check-Out – We utilize keyless, digital locks that enable us to create a code for every guest when they check-in. These locks can expire the code when the guests check out and generate new ones for every guest if desired. This makes it very easy to manage the coming and going of the guests.
  • Guest Communication – Typically the most time-consuming process is guest communication and sending instructions. This includes details on how to check-in, how to use everything inside the house, how to check-out, and so on. There are usually 5 messages that we’ll send to every guest over the duration of their stay. Once you have multiple guests staying with you at the same time, you can see how it can get out of hand quickly.

Fortunately, we can solve this by using a tool like Smartbnb.io. This nifty service allows us to automate all of the check-in and check-out communication for your guests.

We then use the same tool to automatically notify our housekeeping staff about which rooms are checking out when, so they can plan their schedules and come when they need to. Voila – everything is now humming along automatically without us needing to send a single message.

Price Management

A host typically approaches pricing by picking one number for the weekends and one number for the weekdays and setting their entire schedule to that. However, that approach actually leaves a lot of money on the table.

There’s a reason why hotels, airlines, and other industries adjust their pricing regularly depending on the demand, time of year, and a myriad of other factors. A weekend when there’s Super Bowl in town should command a higher rate than a regular Saturday night and so on.

This is where technology comes in again.

what to look for in your house searchThere are a couple of tools available on the market, such as:

These all help Airbnb hosts with price management.

They monitor the:

  • demand,
  • competition, and
  • occupancy of your listings along with your competitors.

And, it automatically adjusts pricing for every single one of your listings every single day. You can set a strategy that you prefer. Whether it be higher average daily rates or higher occupancy rates – and it will make the adjustments that help you get there.

It gives you the same sophisticated algorithmic approach that hotels benefit from when they adjust their pricing. This ensures maximum revenue and it usually costs just a few dollars per listing per month.

What About Seeking Help?

Lastly, and perhaps most importantly is, getting help.

From the second month onwards, we found and hired a great housekeeper that is in charge of turning over the house between guests. She also introduced us to a fantastic handyman that filled in the second piece of the puzzle – maintenance. Handling the upkeep of the property when things go wrong. This element is key as that’s what allows you to step back from the day-to-day responsibilities. If you’re doing all of the turnovers and maintenance yourself, this is a job – not a path towards freedom and flexibility.

Getting help and using these tools is the key element of what makes Airbnb into a semi-passive investment & income, as they dramatically reduce the amount of time you need to manage your listings.

The Path to Financial Independence

After about half a year of running the first property, we ended up acquiring and fixing up another house. We’ve come across a property that was within our budget but needed a significant amount of work. We felt comfortable with that and took it on.

Within about a year total, we had both properties operating and hosting guests from all over the world. We continued to work full-time while managing these properties on the side and fine-tuning the processes to make the entire operation more efficient.

After some more time passed, we’ve felt that we achieved a few key milestones.

  1. On one hand, we had enough cash flow coming in that we could both take some time off from our work. We also no longer have to dip into our savings to maintain our lifestyle.
  2. On the other hand, we’ve felt that we’ve set up most of the systems in such a way that the properties could be managed fully remotely. This meant that we were ready to make our dream come true.

Our Year Away

When we felt that we had the systems figured out and additional income coming in, we decided to make our year abroad a reality. 

We’ve found a 20-year old Toyota Land Cruiser that was perfect for us, outfitted it with everything we needed for the trip:

  • rooftop tent
  • small kitchen
  • storage for everything we’d bring

We then spent the next 7+ months traveling through nearly 15 countries in North, Central and South America. It was a life-changing experience for both of us – and probably can take up its own full blog post! We had finally reached our financial independence through real estate.

Equally interesting, during that time, we were able to continue to manage our properties with a phone and an internet connection (thanks to T-Mobile for free internet worldwide!). The systems that we set up either prevented or automatically handled many of the common issues that would occur. Anything beyond that, we were always able to deal with, whether we were at a campground in Guatemala or a highway in Bolivia. 

What We Learned About Airbnb

Our experience with Airbnb changed the direction of our life. It gave us flexibility and more control over the work that we choose to do.

It’s important to highlight, however, that this is not a become rich quickly with limited work sort of thing.

Rather, it’s about slowly building wealth and income through smart real estate investing and management. It’s not necessarily effortless or always easy, as it can be both an art and a science.

things worth spending money onYou have to be a little bit of a:

  • real estate developer
  • contractor
  • interior designer
  • handyman
  • marketing expert 
  • hotelier

And all in one!

But, it is all doable and it can be extremely fun and rewarding.

Airbnb did not simply replace our regular income, but it gave us something more important than that – our financial independence through real estate. The freedom and flexibility to decide how we structure our work, our time and our lifestyles has been great.

If you’re thinking about ways to get to financial independence yourself, we hope that you’ll find this as helpful as we did.

About Boris & Susan

Boris & Susan are experienced Airbnb hosts and real estate investors hosting close to 10,000 guests per year around the country and managing their properties remotely while working full-time.

They write more about their experience, as well as help other people get to launch, scale, and automate their short-term rental properties at www.BuildYourBnb.com

Drop by to say hello or email them at hi@buildyourbnb.com with any questions you may have!

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AUTHOR Derek

My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.

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