The Real Estate Law Podcast

Secrets to Analyzing + Landing Profitable Short-Term Rentals with The Airbnb Data Guy John Bianchi

November 01, 2022 Jason Muth + Rory Gill Season 1 Episode 74
The Real Estate Law Podcast
Secrets to Analyzing + Landing Profitable Short-Term Rentals with The Airbnb Data Guy John Bianchi
Show Notes Transcript

We're super excited to welcome John Bianchi - The Airbnb Data Guy’ - to this episode! Hear how John approaches Airbnb rentals from an analytical and pure data standpoint. 

John shares his secrets on finding the Airbnb sweet spot by discovering highly profitable properties in any market (hint: it has a lot to do with the amenities that you offer at your properties).

As the Head of Data for Superhost Labs, an Airbnb investing fund, John understands the numbers behind successful short-term rental operations. His mission is to ensure that no hosts ever buy or rent unprofitable Airbnb properties again!

Years ago, John published a course about Airbnb data and how to use AirDNA to profitable properties.

The only problem was that John didn't know how to sell the course.

So he posted it to YouTube for free, and amassed a ton of views!

People reached out to him, so John launched Point Analytics, his Airbnb data consulting company that offers Airbnb data reports identifying the most profitable Airbnbs in any market.

In this episode, we discussed:

- How John became The Airbnb Data Guy
- How to find that sweet spot for profitable properties on Airbnb
- What are the "cheat codes" that John uses?
- Competitive advantages and disadvantages of the Airbnb algorithm
- Proven formulas for translating AirDNA data into profitable businesses
- What are co-hosting and rental arbitrage?
- The risk of using bad data when analyzing opportunities
- How to use AirDNA to find the most profitable spots in a market
- How these strategies apply to purchases, co-hosting, and arbitrage models.
- Being strategic about finding homes that cashflow and appreciate
- What are some good amenities that have worked really well in some locations that Airbnb hosts should consider?
- Designing a home for a specific customer archetype.

Where you can find John:
YouTube - https://www.youtube.com/c/JohnBianchipointanalytics
Website - https://reports.pointanalytics.co/sales-page1646591520576
TikTok - https://www.tiktok.com/@john_airbnbdata
LinkedIn - https://www.linkedin.com/in/john-bianchi-245608a6/

Join Jason Muth and Attorney / Broker Rory Gill of NextHome Titletown and UrbanVillage Legal in Boston, Massachusetts for another episode of The Real Estate Law Podcast!

#realestatepodcast #nexthome #humansoverhouses #realestate #realestateinvesting #realestateinvestor #realestatelaw #realestateagent #airbnb #vrbo #shorttermrentals #airdna #strsecrets #airbnblife #airbnbsecrets
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The Real Estate Law Podcast is hosted by Jason Muth and Attorney / Broker Rory Gill.

This podcast and these show notes are not legal advice, but we hope you find both entertaining and informative.

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John Bianchi:

Another thing to mention on the data, right, just as like a forewarning out there, the vast majority of data, especially on AirDNA is bad data. Like the very bad data. I'd say only about 10 to 20% of the data on AirDNA is actually good data. Right? And like, how would you clarify good data? Well, it has to be up and running for over 300 days, right? Because you want that annual profit number, right?

Announcer:

You found The Real Estate Law Podcast, because real estate is more than just pretty pictures. And law goes well beyond the paperwork and courtroom argument. If you're a real estate professional, or looking to build real estate expertise, then welcome to the conversation and discover more at realestatelawpodcast.com.

Jason Muth:

It's The Real Estate Law Podcast. Thanks for listening to another episode. I am Jason Muth right here and we have called in the experts, we are really going to dig into some data with short term rentals and Airbnb, my favorite topics in the world right now. Rory, I know we're not gonna really talk too much about law in this episode. I apologize. I know that you love talking real estate law and every one of our podcasts right?

Rory Gill:

Well I do and I know this one is just right up your alley. So I'm sure you can talk forever about Airbnb data and everything that you're discovering too as you as you work on our little Airbnb portfolio.

Jason Muth:

You know, I can't talk about it that's why we had to call in John. We have John big here. He is an expert. He is The Airbnb Data Guy. Did I get that right? Like I did. Yeah, yeah. Airbnb data guy. We John and I, we corresponded a few months ago, you know, about him appearing on the podcast. And you know, I didn't know much about you, I dug into your background. I'm like, wow, this is going to be a great episode. I've had this circled on the calendar for a while because you know, Rory can certainly attest to it. We talk a lot about Airbnb in our household. Digging into the data is something that comes natural to me, I mean, I'm a science major back in college, you've put some stuff together that is just even well beyond. So you know, I want to introduce you get to know your story. Learn more about kind of how this all came about. And you know, learn more about what what to look for if you're searching for Airbnb property, whether it's to buy it to co host it. Airbnb arbitrage. We'll talk about all those things to what those definitions are, because people are probably listening saying, What the heck is he talking about? But before we get into any of that, a warm welcome, John Bianchi.

John Bianchi:

Thank you. Thanks for having me guys. Super excited to be here.

Jason Muth:

So John, you are you still in Chicago?

John Bianchi:

No, I'm actually in Windsor, Ontario, Canada, right. Yeah,

Jason Muth:

I knew you were Canadian, from the way you spelled some of the things like there was there was a U in neighborhood. So this guy's Canadian.

John Bianchi:

Yeah, we throw U into things.

Jason Muth:

You do. Yes. And we appreciate that. We love Canada, we've had a lot of Canadians on this podcast and enjoy the country. Every time we've gone to Canada, it's been a great experience. So it tell us about your background, how'd you get into this field? Where do you start? And what are you seeing like in the data?

John Bianchi:

Okay, so I'll start off with where I'm at right now. So right now, I'm the head of data for Superhost Labs, which is a short term rental investment fund, you know, raise money to go out there and buy properties and turn them into Airbnbs. So far, we've raised about 16 million over six months, and bought about 40 Airbnbs, which is super exciting, I feel really lucky to be a part of that team. At the same time, I also have a full time Airbnb data consulting business where I help a lot of smaller Airbnb'ers, try and find the absolute like most profitable Airbnb that they can. And the way that I kind of got all the way to this is I started off with just renting out my spare room, right? And at the same time that I was doing that I also had a investment business. So I was managing a portfolio of about $10 million of other people's money. And the day to day, I just like absolutely hated it. And I was looking for a different business I could start. And I thought I'd test out this little Airbnb thing. And then I started digging into, you know, articles and what other people were doing. And I ended up realizing that there was like an entire business that I could build out of this, right. And then I raised some money and opened up a bunch of homes over in Chicago. And then you know, 2020 came, and I sold off the portfolio and everything like that. And then I just sort of kept at it with the data. But during that entire time period was building up the business, right, I got obsessed with the data. I'm kind of one of these guys who like likes to know, for sure how much how things are gonna go, you're I mean, like, I like to have a lot of confidence. At the same time, I had to raise money from other people. So they had to be really confident that it was gonna work out, right. And that's what led me to like, go really, really deep into the data. And after everything that I did, within that Airbnb business, I realized the one thing that I kind of walked away with after selling the business was how to understand the data better than most people, right? Which led me to creating a course I put that on YouTube. And that's sort of what spiraled all these different things. So that's where I'm at now, that's kind of how I got started to get to where I am. And then you know, the last question you asked there is, is what am I seeing in the data? Right? And I think one of the most interesting things that I'm seeing is that you can beat everybody in your market strategically. So it's almost like a cheat code. Everyone has all of their Airbnb is out there, right? And you can you can look at the data and see what all the top performers are doing. But on top of that, you can kind of see what amenities that they have and what features that they have inside their house such as like hot tub, what kind of views they have it, if they have a pool, if they don't have a pool, the pools heated, if they have a putting green, like, there's just a list of things, right. And so my sort of cheat code is I literally write out the amenities that every single top performing listing has. So say like, the top guy has like five great amenities, and the next guy has four, but he has one that's different than the first guy. So now we have six amenities, right. And I keep adding to that list so that I have every single amenity across like the top 10 properties. And then the goal is to take those amenities and features and add them to our listing so that we have absolutely everything that nobody else does, right. Everyone else just has pieces of these amenities, but we have everything. And so we automatically, you know, we get the good home, and we have all the amenities. So we're automatically the top choice, which means we get booked out first before everybody else and it helps our occupancy helps our nightly rate. And that's truly like how I think you can win. And it's a cheat code, because you can just systematically go through the data, write all these things down and then apply it to your home.

Jason Muth:

And it helps the algorithm to you know, feed more people your way. Because if the platform sees that you're getting a lot of bookings and converting a lot of the clicks into people that are actually either inquiring or booking, then I'm guessing that they're going to push you up the ranker and have you on page one for a lot of those searches.

John Bianchi:

Yeah, definitely. And on top of that, right, some people will specifically look for places a hot tub, which means now your property is in front of more eyes. If you take that one simple logic and you apply it to 10 different items, then you're in front of a lot more eyes than everybody else, right. So you know, pet friendly, people are looking for that specifically now you're in front of a ton of more people, right? Things like that really helped you and then you just have a greater chance of getting that better occupancy.

Jason Muth:

We have three properties live now that we own a fourth is going to come online a few months, probably just a couple months after this comes out, hopefully, and we're pet friendly everywhere. I mean, like that's one of the more basic ones that I just don't get why there's more people doing pet friendly places like it is a way to make a lot more money five figures, six figures if you're a big portfolio, because people do travel with their pets. 100% like we figured that out early on,

John Bianchi:

And what markets are you in out of curiosity?

Jason Muth:

We are on a lake in New Hampshire. So just south of Lake Winnipesaukee, an hour and change south of the White Mountains about 30 minutes from Portsmouth, New Hampshire. And we're in Provincetown, Massachusetts, which is the tip of Cape Cod. So okay, yeah, keep driving on Route 6 until you basically hit the ocean.

John Bianchi:

Yeah, so both of those places in my mind would are a little bit more remote. They're probably what like three to five bedroom homes, I'm guessing?

Jason Muth:

We have one two bedroom, one four bedroom in New Hampshire, and then in Provincetown, it's a two bedroom.

John Bianchi:

Yeah. Okay. So, the other part of this too, right is just simple, like business strategy, right? If you're starting a business, you got to know your customer archetype. And if you know who they are really well, then you can apply everything directly to them. Right? Your properties are situated in an area where people are traveling with their dogs. If you have place in Miami, you probably wouldn't be pet friendly. You don't need to be pet friendly. Let's say that, right? We have a bunch of homes in the Poconos. And for a while we didn't we weren't pet friendly, for whatever reason, we just weren't pet friendly, then we were pet friendly, but we didn't really announce it. And then we put it pet friendly in the title. And the bookings, like overnight, just skyrocketed, right? And that's not like not an exaggeration, we got a ton of bookings, like literally within that first week, we just put it in the title, which was super interesting, but it's just knowing your customer archetype and knowing the type of people that are going to be coming to your specific area. Right? Yeah, yeah, you would have the same similar type of places.

Jason Muth:

I just put a dog emoji in our VRBO listing. Yeah, yeah. Yeah, I couldn't do it on Airbnb. I don't know if they did they turn that feature off?

John Bianchi:

I know that they tried to stop doing it. But I know you definitely can still do it. You just have to do it a specific way. I don't know the way off the top of my head right now.

Jason Muth:

I heard possibly do it through the app, because I was doing everything to the desktop at all. That's,

John Bianchi:

That was my first thought. I'm like, I think I can't do it through that. Yeah. So give that a shot.

Jason Muth:

Let me take it back up to a 30,000 foot view. I mean, like, we're kind of digging into some of these data points right now. What would you estimate the percentage who are really looking at their business in this matter?

John Bianchi:

Honestly, like, there's probably there's some people who are doing it, but I feel like the vast majority of people that I come across or that I talked to, are going off of the gut feelings. And you know, my wife's a good designer, so I let her design it and you stuff like that, right? Where it's like, it's not wrong. You're gonna mean like, your wife's a good designer, and she can put a home together well, then, like, let her do it. It's still gonna look good and you're still gonna get bookings, right. The way that I'm kind of coming at it is I have to be as strategic as I possibly can to maximize every last dollar that we can out of that home. Right? Like we want to be the best property in the area? And so a really good design and really good photos is gonna get you booked, you're gonna get your occupancy. But what we're trying to do is we're trying to outperform absolutely everybody, right? So it's just sort of taking it that extra 2%. And making it just a little bit better using a little bit more strategy in the way that you're putting the listing together. So I talked to a lot of people, and it doesn't seem like a lot of them are actually going through this process. And then a lot of the times I get comments on my YouTube videos, where people are like, wow, this is, you know, never thought about it this way. Or, you know, I have a couple homes that didn't consider this before, right. And, and usually you open up a home without actually going through all this data in this process, right. Like even for myself, I just went and opened up the first home and thinking it was going to be good. It wasn't until that home failed that I was like, well, maybe I should look a little more into this data and information, right? Like, so I'm not batting 100 or 1.000. With these, with these places, either, right? Like, I've gotten it wrong quite a few times as well, which is what's caused this sort of obsession with Airbnb data, because I want to get it right. And I want to figure out how to win every time I get a home.

Jason Muth:

So Rory, this sounds like how we analyzed our properties before we bought them, right?

Rory Gill:

Not a little bit, we said I think people come up here. And if it looks nice, they'll come in. Although to give us a little bit of credit, we realized that there were a couple of different flavors of properties that were out there. And the ones that look like a traditional home you'd find in the suburbs, those ones didn't seem to be booking up very quickly. And we noticed the ones that looked like cabins in the woods, those are the ones that were gaining attention. So it may not have been as data driven. But we did look at the market and take into account you know, what are people looking for in the area who's coming in, maybe we didn't quite investigate who those people are. But we made a couple of strategic choices along the way. But we didn't really have the data to back it up as much as we probably should have.

John Bianchi:

Honestly, though, just hearing that makes me happy, right? Because like, you kind of take exactly what you did. And then just keep taking it even more and more steps and getting more and more granular with the little details. Right. That's the exact process of what I'm talking about. Right? You kind of look at the different things that are out there, what's doing better than the other. Okay, let's go for the thing that's doing a little bit better, right. And then on top of that, without really maybe even knowing it is that the person that's going out to that area, they're going to want the cabin, right? They're not going for to go from their suburban home to a suburban home in another area, right? They're going for the experience, which is what Airbnb is all about. And so that's naturally why those cabins are doing a lot better, right? Like I was going through data and Gatlinburg today, and there was this one home. So if you have amazing views and Gatlinburg like you're well over $100,000, right, and I came across this one, absolutely amazing views, but it was actually doing a lot worse than homes that didn't have views. And the reason being was because the entire thing looked like a suburban home, right. But it was sitting on the side of this mountain, it was just, it's one of those things where I look at it, I get so sad. I'm like what a waste real estate, like throw wood up in that entire place or do something right? You were doing something right there.

Jason Muth:

You know, it's a combination, all businesses go with your gut and follow the data. And I think this is applicable with a law practice with a real estate firm with an investment company with any kind of consumer packaged goods with Airbnb business. And I think this is what separates some people who like doing this on the side, making some extra cash with a room in their house, an accessory dwelling unit, maybe their vacation home, you know, they're able to get their wife or husband to buy into buying it if they could rent it out a couple of weeks, versus the people that see it as a pathway to you know, a business. And it's thinking about this as a business. And I think that a service that you're providing John, is to think about this as a business and look through the data and see what is what is that 90 percentile property doing that's different from the average property? And how do you aspire to get up, there are ways to optimize every business out there. Even the most optimized business, there's ways to optimize that even better. So I think that some of the folks that, you know, we've been studying this a lot lately, and some of the folks that are super successful at it, are just constantly learning. And they're constantly trying to tweak their you know, they're using all the tools that are out there, they're using Price Labs, they're using Rankbreeze, they're using all of the tips and tricks for the software that says what you should do. And then they're probably tweaking it like a human would do. It's like you could just let AI do it. And you might not get the same results as if you have an AI-guided human following the data and understanding kind of like, really what it is on the ground. The data might say one thing, but like if you know that, you know, that specific neighborhood is right next to a nuclear plant or something like, you know, like AI might not know that.

John Bianchi:

Well, speaking of that, another thing to mention on the data, right, just as to like a forewarning out there, the vast majority of data, especially on AirDNA is bad data, like the very bad data. I would say only about 10 to 20% of the data on air DNA is actually good data. Right? And like how would you clarify good data? Well, it has to be up and running for over 300 days, right? Because the you want that annual profit number, right? You want it to have a certain number of reviews so that you know it's actually been a real live Airbnb for that entire time period, right? Because sometimes people take them on off, pause it, use it themselves, and then all of a sudden, the data gets all wacky and wrong, right? You want to make sure it's still active and like going right then and there. And then same time, you want to be a good listing, you don't want there to be like iPhone photos all over the place. And it's not an actual good listening. And so, you know, to hit those three things, only about 10 to 20% of the homes on AirDNA are actually that. And just so anyone who doesn't know what AirDNA is, AirDNA is a site that tracks every single Airbnb that exists in the world and records all of their data and then puts it onto this software, and allows you to see it, right. So first off, you need just the good data. Now, the other issue with the data in softwares like AirDNA and PriceLabs is that they use averages, right. So when you use an average, you say like a four bedroom within this zip code, on average makes about $100,000. Right? That, to me is completely useless. Because the difference in the homes and the style of the homes, what they look like what features and amenities they have, creates a huge variance in how much you can actually make, right, I'll give an example here, like in downtown Nashville, I have all the data for it, I can show you this later, but I have all the data for it. And there's a collection of homes doing $200,000. And then there's a bigger collection of homes doing $100,000, the most profitable home in that area is doing $400,000. And the least profitable is somewhere around like $50,000, right. And so if you just take the average of all of that, and then go out and buy a four bedroom, you're gonna be way off, you might get lucky, right? But you're, you're more likely to be way off. And so what I always try and teach people is averages are useless, try and figure out exactly what your home looks like. So that you know that you're either buying a home is going to make $200,000 or $100,000. Right, and make sure you're buying it properly and appropriately, you can ensure that you're gonna get the proper cash flow, right? So just like some four warnings about Yes, data is nice. And yes, like data shows you what to do. But you really got to take into account a lot of these other little things, which you know, all this stuff on YouTube that I have for free talks about that.

Jason Muth:

Yeah, I should say that, you know, John really goes into this, like, will do screen shares, he'll dig into a lot of his multi-tab databases, he'll look at what data is good and bad. I mean, that's just the, you just get to tip the iceberg as to what you consider, like bad data, right? And I totally get it like we used to say in the research world garbage in garbage out with data. If the data was terrible coming in, the results don't really mean anything. Once you the listener are done listening or viewing this podcast, you know, we want you to go down to the show notes and click over to John's YouTube channel, because you'll see all the classes he's talking about. And you'll see a ton of videos that he has up there that are, you know, him literally sharing his screen showing you exactly what you should be looking for within the data. Let's just talk really quick, let's take it back a step because people might be listening to this saying, all right, you know, I'm a host, I'm thinking about hosting, I'm thinking about buying that first house. But there's a couple other ways that people can make money on Airbnb. And I think that some of your systems will really contribute to the success of those folks, as well. And I'm talking about Co-hosting, and I'm talking about Airbnb arbitrage. So could you just go into what both those two things are, and maybe how looking at the data can also help people that are looking at those types of business models?

John Bianchi:

Definitely. So co-hosting or management, property management, they kind of go hand in hand are you know, somebody else has an Airbnb that's up and running, like, let's say yours, Jason, you have an Airbnb, and I'm going to take 100% responsibility for it, I'm going to take control of the gas and go to control the cleaning everything, and I'm just going to pay you a certain amount, and you're gonna give me roughly about 20% of the profits. That's sort of the norm, right? That's property management or co-hosting, right, which is great. Honestly, if you're trying to start a business or scale a business, it's great because it costs $0 to get a new contract, but you make 20% of all that revenue moving forward, right? It's one of the best ways that you can scale an Airbnb business. Now, the other option is arbitrage. And so rental arbitrage is when you rent out somebody's home, ask them if you can turn it into an Airbnb, they say yes, and then you furnish it and then put it on the Airbnb platform, right. And now you're paying the landlord rent, and you're hopefully making more on Airbnb and you're keeping the difference right? Now, the arbitrage one is the more risky version of getting into the Airbnb space, because you're taking on a lot of liability by taking on the rent, the utilities, the cleaning bills, everything that you have to pay for that place, right my homes on average, were about $70,000 a year that I was paying, just straight out of pocket, nothing coming back, right. And on top of that, you're also have to put a lot of money up front to furnish the entire unit. For one bedroom is going to be roughly about $5,000 for a four bedroom is going to be somewhere around $15,000. Right if you do it on like the cheap end. And so arbitrage is more risky and you have to have some money up front. Co-hosting is free to start and a lot less risk because the landlord's actually taking all the risk because they're paying for the mortgage and all the utilities isn't everything right? Now, I used to tell people all the time, if you're gonna get into the Airbnb space, start off with the management contracts because they're free. And you can learn that way. However, what I realized is that it's almost impossible to get somebody to trust you to run their home as an Airbnb and take all the risks without you have any experience, right? So now what I tell people is find a one bedroom in the middle of a metropolitan, and turn that into a rental arbitrage contract, right, go really small and spend the least amount of money to learn if you even like doing this, but also learn the systems and the process and the operations, right. And if you like that, go out and try and get use that experience to go get as many management contracts as you possibly can, and then only get the date arbitrage contracts when it makes absolute sense. Right. And so, to bring this back to the other part of your question, which is how does the data play into this, right? The data plays into this because when it comes to arbitrage, it is so easy to lose money in when you're doing rental arbitrage. Like I think about 30% of my homes that I got actually ended up being negative cash flows, right? So I lost money on those properties, and I paid about, you know, $15,000 to get them up and running. So I lost quite a bit of money on those properties, right? I had other properties that did really well. But arbitrage, you can really lose a lot of money because you're not owning an asset, you're buying depreciating asset, which is the furniture and you take on all that liability. So getting the right home is really really, really important, right. And so with the data, right, the way that I go about it, is my reports allow me to look at I scrape all the data from a certain location, I put it into this report, and I can see where within the city the most money is being made, right, between the different bedroom sizes and the different zip codes. And then from there, I hone in to that location. So let's say downtown Nashville, right, it's not easy to go down there. But let's say downtown Nashville, because I would use as an example, and I'm looking at the four bedrooms. And what I would do is I go into those four bedrooms, and I would learn everything I possibly can about all those four bedrooms, and all the different scales and levels of profitability. And I would try and find a home on the market for a certain amount of rent that would still allow me to cashflow after all the expenses being paid, right. But without being like certain like, oh, this home, this four bedroom with rooftop patio is gonna make me $150,000 A year without 100% knowing that you're taking a huge risk by signing a lease for like four or $5,000 a month, if you don't know what's going to make $150,000 a year, right? So like going through that process allows you to get the confidence to be able to actually sign a lease and pay for all that furniture, and feel confident that you're gonna make those make that money. Does that answer that question? I know, like I went into a lot of detail there. But I tried to systematically go through it.

Jason Muth:

Yeah, you asked me very well, I think you explained kind of those two business models as well. To some those, this might be the first time you're hearing it. If you listen to a lot of Airbnb podcasts and read about it, you'll see you know, co hosting or property management and arbitrage as two massive things that people are talking about a lot now. John, do you think too many people are kind of getting into that layer of the business? Like just what kind of what's your gut? Like? Has that increased a lot the past couple years? Are we getting a lot of charlatans are getting good people doing that as an entry point?

John Bianchi:

I don't think there's too many people doing it. You know, there's tons of places that still can be turned into Airbnbs and make a lot of money, right? I think that there's a ton of people doing it poorly. And I think that over the years to come, people are gonna start losing a bunch of money and be like, Oh, Airbnb is a terrible thing, and you lose a bunch of money and it's not profitable. Like, I feel like we're gonna start hearing horror stories, a lot more about rental arbitrage in the future than we are right now. Right. And I'll kind of explain why because like, everything was kind of going good, right up until 2020, then 2020, crashed. And then and people don't know this, there's companies that had raised like $100 million, that went bankrupt in 2020. Only one survived - it's named Sonder. And then from that, that was all those companies crashed. And then a whole new group of companies doing the exact same thing started coming up. And now they're starting to promote to everybody that this is like the best thing in the world. And you can do it and, and there's so many people on YouTube, just talking about how it's so easy. And you can do this and you do that. I personally think that if you're not going to treat this like a true business, and you're not going to try and scale it and grow it and get real operations and eventually grow yourself out of that business. That if you're not taking it with that kind of mindset, you should only have one or two or three, like you should keep it small. Because when you keep it small, you can strategically get the right homes, then you can cash flow off of those homes and keep the operations going well and you're not going to kind of stumble and overinvest in end up losing all that money down the road right, by just like constantly reinvesting reinvesting reinvesting and ever taking those profits back. Like I said, I don't think that there's too many people doing it. But I do think there are a lot of people who are doing it poorly. And what poorly is to me, is people who go out there and rent a home without understanding the data and just pick up any home because because it's within their budget and the landlord said yes. And those are the people that are going to feel it in a year or to when they realize they've made $0. Right. And I see it all the time. So like, I know markets really, really well, like I know a bunch of different markets where to buy where not to buy, just because I'm in them a lot. And when I see people post, like, Oh, I just got this new arbitrage contract, and it's, you know, on the far suburbs of Chicago, and I'm like, You're not gonna make any money. There's no demand out there, your home looks great, but like, you're gonna lose, you're gonna lose money over the years, right? It makes me upset. That's why I do these podcasts actually, is because I always try and promote, like, just learn the data and you won't make that mistake, right. That's how I feel about it.

Jason Muth:

So, you know, Rory, legal question here. You know, I was always fascinated by people that are renting homes out and then basically sub renting them. We have a little experience in that, you know, back when we were in Boston, our next door neighbor did that against the condo association's rules. We rented in a building near the TD Garden before we moved up here to Newburyport, just a couple of months ago. And we worked with a corporate housing company, which essentially is doing Airbnb arbitrage, like they are renting from this gorgeous building. They're furnishing it really poorly. But they're furnishing it. They're our point of contact, you know, they pay whatever it was for the lease, and then they leased it to us for a month for more than that. Rory, what are some things that people should listen for or look for if they want to get into Airbnb arbitrage. And they're about to sign a 12 month lease with somebody?

Rory Gill:

Know the rules and regulations. First and foremost, I mean, I kind of always think about our market and where we stand, and all the limitations that there are an Airbnb properties. So I mean, you'd have to be pretty ignorant to how the market works to go out there and blindly sign a lease with the hopes of arbitraging it in Boston, because you can't do that. And that is just not something that you can do. You know, so the other question, when we look around and see these corporate companies coming in, and basically doing, you know, old-style corporate housing on a larger scale, that tells me that these large organizations have analyzed the data, and they've decided on a couple buildings and a couple places in the city, are of particularly high demand. Now, a lot of those places have stays where you have to be there for 32 days to beat some of the short term rules and regulations. But when a big investor comes in, it tells me that there's lots of data has been analyzed by them. The same thing kind of in commercial real estate, when you see a large shopping center breaking ground, that tells me that somebody analyzed the data and said that this community can support it, the traffic count on this road is worth it. As a small investor, it's worth kind of noting what the big guys are doing.

Jason Muth:

So John, you know, we came into this, Rory and I a little bit later in our lives, and we came into it as owners. Knew nothing about co-hosting or arbitrage when we bought our first place. When we bought our second place. We bought a third place when we started building our fourth place. Yeah, I didn't, I just I was like, you know, it's one of those things, it's just kind of off your radar. And it's happening a lot. So, you know, I'm a little fascinated by that. Like, you know, personally, I don't think we're going to kind of go in that direction, because we like all the benefits of owning real estate, like, you know, capital appreciation, the tax benefits, paying down your mortgage, and then cash flow, like just those kind of basics of long term rental real estate, I think apply for short term rental as well, as long as you're finding good properties and you have, you know, Plan B's for those properties, just in case you need them. How does some of the data apply to the people that are looking to own properties? Is it should it be looked at the same way? What are some of your thoughts there?

John Bianchi:

It almost feels the exact same way as if you're doing going to be doing arbitrage. And I know I stressed how important it is to do get use the data for arbitrage, right. But if you think about it, it's it's almost like 10 times more important when you're actually buying the property because the amount of investment that you're putting towards that, right. And so this is what I do on a day to day basis is I try and figure out exactly where the most profitable place is going to be so that we can buy these homes and cash flow nicely, right. We have a 20% rule. So we want the we want to purchase a place where 20% of the revenue is the purchase price, right? So for buying a $500,000 home, we want it to generate about $100,000 a year. And if we can do that it'll cash flow somewhere between 10 and 15%. Roughly, right. So like buying the home, that's the road that I'm trying to go right I did arbitrage I did management, I could I could put my money towards that stuff again. But I really want to start purchasing the homes myself personally, just like you guys are doing because of all the additional benefits that you just talked about as well. I think it makes a lot more sense in the long term. There's a lot more net worth that can be built up that way. But at the same time, you can also potentially get cash flow if you're really strategic about it, right. One thing that I feel like a lot of people are doing is they're getting into the Airbnb space by buying homes coming from the long term rental side of things, and they aren't extremely strategic about what they purchase. They just kind of get into it and they do it. They don't really cashflow that much but they're covering all their bills. To me that just just doesn't make a ton of sense, right? Because this is all I do. Right? So of course to me it doesn't make a ton of sense because you have the opportunity to buy a home. So why not just wait and buy the best possible home that you can get that's going to generate you actual cash flow? Right. And it's I don't put people say like, you can't get equity and cash flow. I've done this enough and long enough that I know for a fact that there are homes out there that you can cashflow, right, and that do cashflow nicely. And so but the idea is that you just be extremely strategic with which one you purchase. Now, when I started this little paragraph here, I said that the data was probably 10 times more important when you're getting into it, because it's a larger investment. But at the same time, you could counter that and say, Well, when I buy a home, you know, there's a lot of other ways that I'm making money. So if I'm not cashflowing from it, it's not that big of a deal. And there's a lot of security behind it. And it's an asset, right, which is definitely true. So my thought is like, if you're comfortable with that, then so be it and go for it, right. But if you want to have all those benefits, and potentially have some cash flow from those properties, then you just have to do a little bit more upfront work to be strategic with what you actually purchase. And then you can potentially get both of those things, right. And so that's kind of the way I look at it.

Jason Muth:

It's like taking a step back and saying, Okay, I got some money to go buy another place. And then you just throw a dart and you know, buy the place across the street, and then you try to run on Airbnb, and then you're like, No, stop, yes, the money to do it, go find the right one, don't just get any one.

John Bianchi:

That's exactly how I feel these people have like millions, you know, so much money, especially some people who are buying a bunch, I'm like, you have all the money to do this, right? And you're just picking up whatever you can say, oh I'm Airbnbing, it's like, no, be strategic. You know what I mean?

Jason Muth:

Yeah, you mentioned 20%. You know, so like, if you buy a $500,000 place that was example you gave you wanted to bring in $100,000, that first year, then your net revenue would be 15-20% or so it could be more, you know, sometimes people operate better, more efficiently as time goes on. But, you know, are there you're doing a lot of analysis in a lot of markets. And, you know, the country's real estate is so disparate, you know, we're here in the Greater Boston area, and the numbers are just like off the charts. You know, we're not talking about some of the Midwestern towns, but there are some places in the Midwest in the South that are very, very expensive, because they're highly desirable markets, Nashville, certainly not cheap, you know, a lot of the vacation places in North Carolina, Florida, whatever. Are there still $500,000 property that you could pull $100,000 out of, you know, around the country?

John Bianchi:

Not everywhere. There's, there are they do exist, they're far and few in between. But you know, right before I got on this call, I was looking at a couple. I can't, unfortunately, like I can't give anything away because of because of where I work. But I was without a doubt looking at it today, like minutes before getting on this call, because we had to find one by the by Wednesday. And so I was looking at a couple different markets, and I came across three. So they do exist. It's not a guarantee. But you know, with going through the data, you get lot more confident that it's potentially possible. But usually you gotta go, like, usually what we're doing is somewhere around like 750-800. And we're looking at like trying to generate 150,000. Yeah, right, we're comfortable with going bigger, because we just have, the team at Superhost Labs is so strong, it's ridiculous. Like the way that we put together these homes, the way they look, the way that we operate them, it's just everyone is sort of like a killer in their own little area. So it's, it's awesome. And we feel confident being able to purchase these bigger properties.

Rory Gill:

I just wanted to ask, see if you can maybe satisfy just from the curiosity of the listeners here. You know, are there certain locations that seem to be trending very well over certain amenities to properties that are trending very well, I know that, you know, varies market to market home to home and what the expectations are, but can you give us something? What are some good amenities that have worked really well, in some locations that people should be considering?

John Bianchi:

Things that always are beneficial are like a hot tub, like a heated pool rather than just pool. The reason I'm mentioning those two just very quickly is because they extend your season. Okay, so like every market has a season. And if you can get people to stay outside a little bit longer in their backyard or something like that, then they're going to want to book your place in the shoulder seasons, whereas they won't book somebody else's place. Right? Because they have the option to go sit outside in the hot tub or go into the pool when it's getting a little bit chillier because it's heated, right? So those sorts of things like are awesome because they extend your market, especially like a sauna in an outdoor barrel sauna in a cold market is a really good idea as well, because you can go outside and you're freezing then you head into the sauna, right? It's kind of like a cool experience and you put it beside the hot tub. Right? Those things are definitely great. On top of that Airbnb is marketing. So every single home is competing against the other home right so you got to market it better than the other home and so photos is not an amenity, but don't cheap out on your photos ever, ever. It costs you $1,000 to get great photos, it's gonna make you $10,000 more I can guarantee you. But on top of that the make your home look like it's out of a magazine when you take those photos right so what I mean by that is like get the hanging lights and take the twilight photos and get someone to edit the photos and set up the table and set up the pool table and and get these certain angles and like look at the way that photos are taken within the magazine and then do that with your home. If you're taking a, if you have a great view, take the photo from directly behind the chair at eye level if you're sitting in that chair, because that's where you would be if you were actually sitting there. And that's exactly what you would see. And so then that will give you a real realistic example of what the view looks like. And it'll make you want it even more. Right. So those are kind of like a little, little bit of things. But I do want to say that every market has a different customer archetype, right? Scottsdale, its bachelor and bachelorette parties, Disneyland, its families, right, and Blue Mountain or Blue Ridge, it's also families, but going for a completely different reason, right. And so I kind of mentioned this earlier, but learn your customer archetype. and design your home extremely well, for that specific person. I'll give an example of someone we literally just did, we had brand new cabinets, and we painted them all pink. So the whole thing is pink, because it's a bachelorette home, which sounds insane. But it's literally like going to be one of the most, the coolest homes in all Scottsdale that's gonna stand out like crazy, because it's got pink cabinets, and there's a mural in the living room. And the whole backyard has like 70s, pink furniture and everything. And so if you're going with, you know, if girls are going with their girlfriends on a bachelorette party, they're gonna look at it and be like, well, that's gonna give me the experience I'm looking for. Right. And that's how we're gonna, that's how we're gonna be able to hit our numbers. So know your customer archetype and every single market because it's different every single market. And last little tip I'll say on that, too, is when you take all the photos, think of what your customer wants the most when they're there, and make those your top five photos. Don't put them in order. Just make those photos your top five. Right. And so that's, you know, a couple of little recommendations was that helpful, Rory?

Rory Gill:

That was perfect. I mean, I knew I didn't want to give you the easy out of saying it depends, because it certainly does. But you know, wanted to put some tidbits and I haven't thought about it in terms of amenities. But I know that the shoulder season, at least for us is separates what is what separates the casual Airbnb'ers, from the more successful ones having a property that's, you know, in a location that can extend the season for the one that we have in Provincetown is actually it's in a good location for the beaches, but it's also walking distance to the shops into the town, which means that people coming in the spring in the fall, are actually likely to look there. And even though some properties might be larger, have better views of the beach, the ones that you're you're separated from the restaurants are not going to grab the October traffic.

John Bianchi:

That's a great example of a market specific type of way to increase your occupancy throughout the year. Right, because you're pulling from more than just the peak season, which is which is super strategic. So I like that. Yeah.

Jason Muth:

And it worked. I mean, like I had to tell our garbage company not to stop pickups throughout the year because it just kept getting rented the last two seasons. Just consistently. Lower prices, obviously. I mean, like the you know, if you ever been to the Cape in the middle of the winter? It's very, very quiet down there. I mean, 4,000 year round residents, where this week is probably about 70,000 people in Provincetown right now for Carnival. Do you have neon signs in Scottsdale?

John Bianchi:

Oh, yeah.

Jason Muth:

You do?

John Bianchi:

Oh, yeah. All over the place.

Jason Muth:

Yeah, figured. Let's get to her final couple questions. And then I want to talk about your YouTube channel and some of your offerings. And you know, the market analysis that you do, I want to make sure that you can get the information out there. And we'll obviously link to it in our show notes as well. So we ask the same three questions of everyone that comes to the podcast, John, and we'd love to get your answers as well find a little bit more about you. First question we have if you can go on stage for half hour and talk about any subject in the world zero preparation. What would that be?

John Bianchi:

You guys already know, but it'd be Airbnb data, right? I just I just talked about Airbnb data for half an hour, no problem. Without a doubt.

Jason Muth:

And you'd make it interesting. But people wouldn't zone out, right? Because they're like,

John Bianchi:

I hope nobody's zoned out during this podcast.

Jason Muth:

If you're still listening to this podcast or watching it, then you certainly haven't. Like I like to lean into the conversation. Yeah. Second question we have for you tell somebody a habit early in your life or career that impacts the way that you're working today.

John Bianchi:

This is an interesting one, I used to be an financial investor, and you know, have my name on the door, had my own assistant, I was managing $10 million, and I was 24 years old. And I was like, you know, if anyone was looking outside, and they're like, Oh, he's doing pretty well, right. I had a business partner, I was looking at my best partner like, I don't want to have do this first one I like, I was like, I don't think I can do this. And but you know, when you're gotten to that point, it's kind of hard to walk away from it's really hard to walk away from right. I went to a Tony Robbins event. I know some people love Tony and some people hate Tony, but I went to one of his events. And when I came back, there was this moment, where my assistant asked me, she said, how was the event? And for some reason, when she asked me that I knew there was no way for me to explain how good it was. And I knew in that moment that I was going to stop what I was doing that I was going to leave and it was it's this weird, like core memory that kind of really stuck with me. And that is actually just sort of just it changed everything for me because like that, that pivoted everything that I was doing, and that's why I'm where I am now. And I really love that I took that risk and didn't just sit back and accept my life because I had built it up so far, right. And I just continued to create my life the way I wanted it to be created. And that sort of just carried along with me every time. And when a tough decision comes, I kind of think of that decision. I go like, I can make it again, you know what I mean, by need to?

Jason Muth:

That's great. I think a lot of people have those moments, and then they don't take the jump. They don't take that risk, right?

John Bianchi:

Yeah. Not easy. I mean, it was a it was a lot. You know what I mean?

Jason Muth:

Yeah, I'd imagine.

John Bianchi:

Yeah, but it was worth it. So you're not mad about it all?

Jason Muth:

Yeah, good for you for figuring that out early on. I mean, like a 24 year old managing a $10 million financial portfolio set, you see that the future is so bright, you know, upward trajectory of managing money. And you're like, I don't want to do this.

John Bianchi:

Yeah.

Jason Muth:

Final question. Tell us something that you listen to, or watching or reading these days.

John Bianchi:

I listen to Joe Rogan. Like every day, I'm doing my analysis. And it's pretty much just like always on just going. I know everyone I know. He's like the number one podcast out there and everything. But I do enjoy the way he kind of looks at things. I realized he talks about stuff over and over and over again. So eventually, it kind of can get a little bit annoying, but I don't have one specific thing. I guess Joe Rogan is kind of my go to.

Jason Muth:

Do you remember him from Fear Factor?

John Bianchi:

Of course. Oh, yeah.

Jason Muth:

Okay I didn't know if you're Yeah, yeah. So he's been quite a career out of that podcast. I mean, oh, yeah. Is it Spotify that bought them? Right? Yeah.

John Bianchi:

Yeah. Yeah. Like $100 million. Contract? Yes. It's quite the contract.

Jason Muth:

Yeah, we can all aspire to that. I don't think this podcast, Rory, is worth $100 million just yet. But you know, we've had, we've had a lot of offers out there.

John Bianchi:

But maybe after this show.

Jason Muth:

It could be John, you could push us over.

John Bianchi:

I think I'll do it.

Jason Muth:

We'll cut you in. So talk about what you're offering, and how you're analyzing deals and how people can learn more about you, YouTube channel, all that stuff.

John Bianchi:

Perfect. So I create market reports. So I have

Jason Muth:

And if you want to find more about John, you could my own software that allows me to create market reports. So if you're going into a market or even in your own market, you're trying to figure out what is the most profitable Airbnb that I could buy in this city? Right? My reports can get you that answer, right. And so if it's not just the report, it's also the process. So you will receive a market report, but you also receive a two hour training material videos that will walk you through my process that I take on a day to day basis to understand what you're looking at, and how to make sense of it so that you can find the most profitable Airbnb in your market. And I can do that for literally any market in the world. And I also do free consulting calls. So if you are, you're not sure what market you are going to you have some additional questions you want to go through anything. I do a free consulting call with anybody who wants it. So you can reach out to me through email, my email is hello@pointanalytics.co. If you reach out to me, we'll set up a call. We'll go through all that. And I can see if a marketing report makes sense for you or not. Google John's name or you can just go to John Bianchi Point Analytics, which is your YouTube channel. What's your Instagram name we'll put this up on Instagram as well. But you don't seem to use that too much for for business. It's more like a YouTube thing and your website, right?

John Bianchi:

Yeah, my it's more so just just YouTube. So my Instagram is personal still right now. But if you I'm on Tik Tok a couple of viral Tiktok said went off this week. So you can find me at the Airbnb data guy on Tik Tok

Jason Muth:

All right, The Airbnb Data Guy. Do you have t-shirts yet?

John Bianchi:

No. Not yet.

Jason Muth:

All right.

John Bianchi:

That's next.

Jason Muth:

Yeah. Awesome. Well, this is this has been a great discussion. I'm sure we can go deeper into it. Also, some of your videos go really deep into the data. So if you are a data person, and you're still listening to this podcast, I advise you to go online, find John and you know, watch his screen recordings. Like I love it when people do screen recordings, because you can kind of see just everything and you see the exact numbers the exact spreadsheet that the person subscribing is looking at. And, you know, I know a lot of the podcasts you've done in the past. Also, you go into the screen recordings. We didn't do that for this podcast, because I wanted to keep it all just you know, audio and video without the screens. But you know, it's all there. It's all up on YouTube. And I encourage everybody to go learn more about John if you're looking to get into the Airbnb game, in whatever capacity you're buying a home, you want to rent a home and re-rent it out with arbitrage, you want to co-host. It's a great starting point to kind of see what the sweet spot is in the right markets. Rory, where can people find you?

Rory Gill:

People can find me through my real estate brokerage NextHome Titletown, nexthometitletown.com. Or my law practice UrbanVillage Legal, urbanvillagelegal.com.

Jason Muth:

Hey John, we'll have to have you back at some point in the future just to kind of see how things are going with with the new gig and what insights you because there's the space changes so much, you know, so next year, the conversation will be entirely different, I'm sure.

John Bianchi:

Yeah, definitely. Happy to come back.

Jason Muth:

Awesome. Well, thank you so much for listening to the podcast. If you've enjoyed This we'd love it. If you can give us a great review or comment. We do read all of our comments. If you want to reach out to me directly, you can get the jason@nexthometitletown.com. If you are looking for John, we'll have all of his contact information in the show notes. And if you'd like to be a guest on this podcast, reach out to me, and we'll see if I can get you scheduled on the calendar. So on behalf of Rory and John, thank you once again for being here. Thank you for listening. See ya.

Announcer:

This has been The Real Estate Law Podcast because real estate is more than just pretty pictures. And law goes well beyond the paperwork and courtroom arguments. were powered by NextHome Titletown Real Estate are Boston's progressive real estate brokerage. More at nexthometitletown.com. And UrbanVillage Legal, Massachusetts real estate Council serving savvy property owners lenders and investors more at urbanvillagelegal.com. Today's conversation was not legal advice, but we hope you found it entertaining and informative. Discover more at the real estate law podcast.com Thank you for listening