Ryan writes: Do you think it’s a good idea for me to go living with my parents and make my home an Air BnB with the intent to save money and get into real estate investing?
Speaker 1: Welcome to the real investing show with Tim heritage. Each day, we’ll provide real investing for everyday investors. Tim is a nationally recognized real estate investing expert podcast, host and public speaker. He built his businesses from the ground up and is here to help you do the same. Here is your host Tim heritage.
Speaker 2: Welcome back to real investing. I’m Tim Harris. Thank you for stopping back by today. We have a question from Ryan. Ryan writes, Ryan writes <laugh> do you think it’s a good idea for [00:00:30] me to go live with my parents and make my home and Airbnb with the intent to save money and get into real estate investing? Wow. Okay. That’s a two part question. I do not think it’s a good idea for you to live moving with your parents, Ryan, uh, in general, my personal opinion is that adult men should not live with their parents, but <laugh>, if, if there’s another reason you’re contemplating that if you’re you need to go care for them, you need to take care of them. They have a bunch of extra space or a detached home [00:01:00] or something of that nature, or you’re going through something in your life. I, I absolutely think it’s a good idea to move in with your parents.
Speaker 2: So that’s that? Cause I have kids and that’s kind of the framework work I’ve put around them, the other Airbnb in your house to, uh, save up some money, make some money, getting a real estate investing. I love the idea because it gives you a track record, right? So one of the biggest things that we tell people all the time at RCN capital, but then also then I tell people in these conferences and things, a track record is probably the hardest thing to get in this business. Anyone can have money. Anyone can [00:01:30] get good credit. A track record is something that you have to do on your, oh, no one can give it to you. No one can do it for you. A lender like me, I’m gonna look at your experience and I’m not gonna look at your friend’s experience. Your dad’s experience, your partner’s experience.
Speaker 2: When I’m making a decision on loaning you money. I’m going to look at your track record. So from that standpoint, I do think it’s a good idea because you do get to build a track record with something you already own and it’s investment experience. Now, Airbnb, [00:02:00] Airbnb’s one of those things. It it’s had a, an explosive growth it’s had just an absolutely incredible run. And frankly, the capital markets, the securitization market is a little leery of it. There’s a lot of people that are quote unquote, Airbnb, their properties to make a little extra cash. There are people that bought second homes that are now reverting to Airbnb to try to make cash flow off of them. And the data is just very hard to pin down still as far [00:02:30] as true vacancy, true maintenance, true wear and tear on your property. And then, you know, you have to decide if you’re gonna get a manager it’s, you know, these are all things that everyone has to go through.
Speaker 2: And if that’s, if you don’t have a lot of money and I I’ll use a great example, as I record this, it’s 102 degrees. We are having a lot of problems with our air conditioning units at our properties in Texas this month, if we have a problem. And if [00:03:00] an AC unit blows out, the condenser goes to Hades depending on the house that it is, we may have to replace the entire system. So <laugh> the question is, do you have the money or the ability to get the money credit cards or whatnot to handle any repairs when it’s not you living in the home? Uh, and another thing you have to look at is your insurance, different insurances cover different, um, types of occupancy or vacancy, make sure you’re in full compliance with your HOAs and, uh, make sure you have [00:03:30] repair contingency money because, and I mean, if you’re, you have to have lawn maintenance, there’s just a lot of things that go into owning a rental property.
Speaker 2: Um, and Airbnb’s really strict if you don’t adhere to their guidelines or you don’t communicate something, right, or you don’t reply fast, you can get kicked off the, the, uh, platform pretty fast. So recommend a manager if you don’t have experience with it. Um, but if not, do your research get involved in some of the forums and threads and really, uh, give us some thought. So, uh, you know, do I think it’s a good idea for [00:04:00] you to live with your parents? Uh, if you need to and, uh, make your personal residence on Airbnb with the intent to save money, getting a real estate investing, look, I mean, you know, I don’t have a problem without house hacking. Just make sure you dot your eyes and cross your Ts and plan for, uh, contingencies because too many people spend their rental income versus, uh, budget for capital expenditures, maintenance, vacancy, and the unexpected because you, the only thing about the unexpected and real estate investing is expect it to happen. So, [00:04:30] Ryan, I hope that was helpful. Thank you again for riding in. If you’re listening and you have questions hop on over to, I have lunch, money.com. I’d love to hear from you and until tomorrow, goodbye.
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