Welcome back to another episode of House Hackerz with BiggerPockets. One thing I love about house hacking is all the creative, win-win strategies house hackers figure out.
Today, I’m talking to Ben Einspahr about the house hacking strategy he and his wife Alyson use. They’re on their third house hack in their house hack stack, but this is the first one since they had their daughter Emma. They found a way to make house hacking fit into their lifestyle.
- Watch the YouTube video (at the bottom.)
- Read the blog post. Note, the blog is an executive summary. Get the in-depth breakdown from the video.
Exploring the Property
Ben and Alyson live in a newbuild townhouse that came with a built-in suite that’s perfect for Airbnb. The property has 3 bedrooms and 3.5 bedrooms. The first floor has their garage and a 1 bedroom/1 bathroom 150 sq ft suite with a private entrance. The second and third levels have their living areas and bedrooms, giving them privacy and separation from their Airbnb guests.
One of the most important parts of setting up a short term rental is understanding the needs of the people staying there. In Ben’s case, his guests stay at their Airbnb for one to three days. This means they don’t need a lot of space or a full kitchen, just an area for coffee and a hot plate.
Ben’s Tips to Create a Scalable Business
Ben is an operations guy who understands the value of having systems in place. He holds the record on our team for how quickly he set up his Airbnb: it was operational less than two weeks after moving in. How did he do it? He already had everything he needed to buy in his Amazon cart and simply hit purchase once he was under contract.
Systems are key to scaling a business. Ben’s top three time saving systems are:
- Auto messaging: Ensure messages don’t slip through the cracks, and guests love speedy responses.
- Turnover supplies: Keep multiple sets of turnover supplies on hand if doing your own laundry. You don’t want to be stuck washing linens in the middle of the work week.
- Sync your Airbnb calendar with your cleaner: You never want a guest to show up without a clean place to stay; make sure your cleaner knows the schedule.
Ben and Alyson like to keep the price of their Airbnb just below the competition. This ensures that occupancy is high, and more people will leave reviews that build their credibility. Airbnb’s perform better with dynamic pricing—this means that the price changes depending on the supply and demand, day of the week, and general seasonality. Keep on top of pricing to make sure you’re maximizing revenue.
Most important, though, is knowing your local laws and regulations for short term rentals. Find out what your locality says about stays of 30 days or less and make sure you follow the rules. In Denver County, you are required to be an owner-occupant. Ben lives just outside of Denver in a locality that will allow him to continue hosting Airbnb guests after he moves out.
Find a House Hack to Fit Your Lifestyle
I sat down with Alyson, Ben’s wife and business partner, to talk about how they make their house hack fit their life, and not the other way around.
The main appeal of this property for her is the privacy it affords. The Airbnb is on its own floor, and their bedrooms are on the upper level. This gives them an entire floor of separation, and they don’t need to see the guests unless the guests need to see them.
Even with that privacy, it’s important to set clear expectations for guests ahead of time. In their welcome message, they let guests know they have a young daughter who likes to make noise during the day. Alyson checks in with guests regularly to make sure they’re aware and don’t have any issues.
In order to save time, she recommends automating systems wherever possible. Thanks to their systems, her main responsibilities now are quality control and checking supplies, while Ben does the financials and big picture planning. He used to try to do most things himself, but he realized that being so hands on doesn’t work with a scalable business. Now, he hires out most things.
Finally, she stresses the importance of having regular discussions to make sure the situation works best for everyone. She and Ben set aside time for a weekly meeting to make sure they’re both on the same page and are each up to date.
Evaluating Their House Hack Stack
Ben and Alyson own two other properties. Those properties have a total valuation of $925K, with $400K in equity and $20K of cash flow a year. Both of these properties are house hacks they lived in for a year or two and bought with a 5% down payment. These numbers show the value of leveraged real estate.
I ran the numbers on what their townhome will add to their portfolio when they move out in the next year or so. Conservatively, the total portfolio valuation jumps to $1.6MM; they’ll have $647K in equity and $30K in cash flow.
Start Building Your House Hack Stack Today
To build their house hack stack, Ben and Alyson aren’t doing any crazy strategies. They’re simply buying a house every two to three years with 5% down. They stay consistent and are steadily building their portfolio. Don’t get distracted by fancy tactics; stick to the basics and you’ll find a solid path to success.
To learn more about how to manage an Airbnb as efficiently as Ben, enroll in his course, Step by Step Short Term Rentals. This course has everything you need to get started running your short term rental, from tools to tips.