EP193: How to Become an Airbnb Entrepreneur

EP193: How to Become an Airbnb Entrepreneur

If you’ve always wanted to be an entrepreneur, but you’re looking for a low-risk way to start small, Airbnb might be the answer. The vacation rental ecosystem is ripe with opportunity, and there is no better way to learn the skills necessary for running your own business than… well, running your own business.

Sid Kosatsky started simply, freelancing to help a small boutique hotel in the Dominican Republic set up their Airbnb listings. Hiring cleaners for his own Airbnb listing in the Halifax region of Nova Scotia led to Soapy Cleaning, a company created to find additional work for his team! From there, he established HostOften, a full-service Airbnb property management company.

Today, Sid’s team includes a team of seven employees, five of whom are full-time, and he has systems in place that allow him to do the work of growing the business. On the podcast, he shares his advice for aspiring Airbnb entrepreneurs, the technology he uses to save 15 hours a week, and how he built his talented team. Listen in and find out if Airbnb is the entryway to entrepreneurship you have been looking for!

Topics Covered

Sid’s Airbnb story

  • Listed room in house last summer (Dartmouth)
  • Relocated to Truro in May, started renting entire home
  • Stress around hosting from far away
  • Interviewing cleaners, considering property management company
  • Inspired by entrepreneurial podcasts to start his own businesses
  • Started as freelancer, helping international clients create Airbnb listings
  • Expanded to HostOften property management
  • Hired cleaners for HostOften, then created Soapy Cleaning
  • Automated systems have allowed him to do both
  • Advertised for clients, employees on Kijiji

Sid’s advice to aspiring Airbnb entrepreneurs

  • Do it!
  • Airbnb provides quick and easy entry
  • Reinvest Airbnb earnings to build business

The entrepreneurial skills Sid learned from Airbnb

  • Hospitality
  • Real estate
  • Hiring
  • Managing employees, contractors
  • Scheduling
  • Customer relations, guest management
  • Finances, paying taxes

The software Sid used to create systems

  • Google sheets (log cleaner, client hours) didn’t work well
  • Moved to QuickBooks for payroll
  • TSheets App integrates with QuickBooks (time sheets)
  • Automation saves Sid 10-15 hours/week

The responsibilities Sid has outsourced to other employees

  • Stopped cleaning, check-ins right away
  • Full-time VA took over scheduling, reviews, guest communication and coordination of maintenance
  • Lead cleaner has become ops manager (hires, manages new cleaners)

Sid’s role in the business

  • Website maintenance
  • Procuring new clients
  • Scripts, systems
  • Hire, train employees

How Sid built his cleaning team

  • Scanned Kajiji for cleaners, part-timers
  • Conducted interviews (20% didn’t show)
  • Cleaned with prospects, assessed their work
  • Fosters culture of fun to attract good employees
  • Has three core full-time cleaners

The importance of ‘taking yourself out of the equation’

  • Frees up time to grow business, focus on big picture

The scale of Sid’s current business

  • Manages three listings
  • Wooing five new clients
  • In talks with landlords, developers
  • Three full-time, two part-time cleaners
  • Full-time virtual assistant
  • Freelancer optimizing SEO for website

How Sid found his VA

Sid’s current profits

  • Airbnb listing income of $5K/month
  • Cleaning clients generate $1-2K/month
  • Puts money back into hiring, social media
  • Enjoying rapid growth
  • Presently breaking even

The most important lessons Sid has learned

  • Don’t bite off more than you can chew
  • Create boundaries to manage your phone time

Sid’s rates

  • 15-20% of Airbnb revenue for property management (established listings)
  • 25% of Airbnb revenue if build listing from scratch
  • Flat rate cleaning fee of $90-$120

Connect with Sid

HostOften

Soapy Cleaning

Resources

Kijiji

QuickBooks

TSheets App

Fiverr

Upwork

Cara Helps

GPFYP EP175

 

Connect with Jasper

Email: [email protected]

Twitter: @GetPaidForUrPad

Instagram: @GetPaidForYourPad 

Facebook: www.facebook.com/getpaidforyourpad

This episode is sponsored by Hostfully.com where you can create a custom digital guidebook for your guests!

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Complete Transcript for Get Paid for Your Pad Episode 193

Welcome to Get Paid for Your Pad, a definitive show on Airbnb Hosting, featuring the best advice on how to maximize profits from your Airbnb listing, as well as real life experiences from Airbnb hosts all over the world. Welcome.

AD: This episode is brought to you by Hostfully, a company that helps you make beautiful guidebooks for your listing. Specially for Get Paid for Your Paid listeners, get two free months of their premium version. For more details, visit Hostfully.com/pad.

Welcome to another episode of Get Paid for Your Pad. Today we’re going to talk about how to become an entrepreneur in the Airbnb space. I have a very special guest, Sid Kosatky from Nova Scot … No, how do you pronounce that?

Sid Kosatky: Nova Scotia.

Jasper:  Nova Scotia. I even practiced it before we’re starting the recording of the podcast. I still didn’t get it right. Sid has been an Airbnb host for a while. He has been listening to the podcast a lot and he reached out to me and he told me his story and I thought it’d be very inspirational for a lot of people out there. I’m very excited to have you on the show, Sid. I’m excited to hear about your story. In a nutshell, Sid, he was an Airbnb host. He wanted to do something more in the Airbnb space, so he became an entrepreneur. He started a small Airbnb management company in the region of Halifax and then he also started a cleaning company and that kind of spiked his interest in being an entrepreneur in general. That’s why I think it’s very inspiring how you can start with something small.

Just having an Airbnb listing, and then moving towards an Airbnb management company where you manage some other people’s listings. Then you have to find cleaners, so you started a little cleaning company and that can then lead to much larger things in the future. I think that’s how a lot of entrepreneurs start. You start with something small that you’re very good at and then the entrepreneurial journey can lead to much bigger things in the future. Sid, thank you so much for taking the time. I’m really excited to hear your story. Let us know what’s been your journey like.

Sid Kosatky: Thanks for having me, Jasper. Yeah, you summarized it perfectly. I guess I could tell the long version. As you said, I started with my own Airbnb property. My fiance Em and I actually bought our first house in Dartmouth, Nova Scotia just at the beginning of last summer. Actually halfway through. We lived there for a few months before relocating and thought that Airbnb would be a really good way to rent out the house because the rental prices in our market were pretty low. We barely get by to cover it. Airbnb would also give us the option that I could stay in the house sometimes and I wouldn’t have to commute as much. When doing that, I just wanted to do it really well. I actually spent a lot of time researching Airbnb, reading all the forums, and listening to your podcast religiously.

It’s really exciting to be here. This has been definitely a goal of mine for a long time now or it feels like a long time.

Jasper:  When did you start hosting?

Sid Kosatky: We actually only hosted two or three times. We tried it out when we lived in the house last summer and hosted just while we’re away for the weekend just to try it out and moved into hosting full-time in that property May 1st of this year.

Jasper:  Right. You’re a fast learner?

Sid Kosatky: Yeah. I’ve had really great guests. Worked with some amazing people. It’s been a bit of a rollercoaster. Managing a property. I actually moved an hour away to Truro, Nova Scotia. It was a lot of stress, the idea of having the property out of my control. I didn’t know how I was going to hire cleaners. Even if I hired a cleaning company or one cleaner, what if they’re not available certain days. I was kind of doing everything myself at the start, which is how most entrepreneurs start probably in just about any business. I started going through the process of interviewing cleaners and it was right around the same time that it was suggested to me that I’ve learned so much about Airbnb.

There are a lot of people out there looking to list their place and could use somebody like me to help them with that. I started entertaining the thought of Airbnb property management and also been listening to a lot of entrepreneur podcasts and kind of wanting to be an entrepreneur for a long time. I thought that this would be a good way to practice a lot of the entrepreneurial skills I’ve been learning. I just went full in and took it seriously. Started hiring cleaners. I realized that these cleaners couldn’t just clean my own place. To give them enough work to stick around, I put out ads as an Airbnb cleaning company, which at that time five months ago wasn’t a thing in my region.

I took on a few Airbnb cleaning clients and that alone was busy enough to really make me slow down. I stopped doing the Airbnb property management and just kind of worked on my own property and hiring out cleaners. After a few months of doing that, I finally got some software. Scheduling got easy. My cleaners were amazing. I realized I had these systems in place that we’re at this point almost automated. Just in the last couple of months, I’ve started advertising again and taking on full-time Airbnb clients. Here in Halifax it’s quite seasonal, the Airbnb market. There won’t be a lot going on through the winter, but I have now a whole team of cleaners who are really amazing.

I’d like to find full-time work and so that’s what inspired me to start Soapy Cleaning Company, which is just essentially a way to provide work for my cleaners so that they’ll stick around and I can use them for Airbnb properties.

Jasper:  Let’s go back a little bit because I was thinking that you would start your Airbnb management company first and that will give you the need to find some cleaners, but it actually went the other way around.

Sid Kosatky: Yeah. Well, it’s hard to really pinpoint. It kind of all started at the same time. I did register the name for the Airbnb property management. Host Off In is what I called it and worked on building that up. I started small before doing full-time management. I’d helped people create listings for their properties. Put up a few ads and actually found some international clients where I created the listings for a couple hotels and some smaller Airbnb properties. I originally hired the cleaners for Host Off In property management. Really as that grew, I separated the companies so that I have a cleaning company and a property management company working symbiotically.

Jasper:  Got it. Where were you advertising at first? Were you advertising locally or like on Facebook?

Sid Kosatky: I just advertised on Kijiji, which is essentially the Craigslist for Canada. I think it’s only here in Canada. Yeah, that was enough. There wasn’t very much competition in my space, so anyone could Google Airbnb property management, Airbnb cleaning service and my Kijiji ads would come up either on the first or second page of search results. For me, the rate I wanted to start out and maintaining high quality more than enough for me to take on one client a month, work slowly, make sure that I am able to provide the services I promised.

Jasper:  For the listeners out there who are interested in becoming an entrepreneur in the Airbnb space, what would your advice be?

Sid Kosatky: My advice it would be just do it. It’s really such a quick and easy entry. For me, I didn’t have any money at the time besides the house I owned. Everything was invested in that. I was able to rent out the place that I personally owned. If you have a nicely furnished house, you can go stay with friends or family or even go and rent somewhere cheaper and Airbnb your own place because the amount of money I received not only renting my Airbnb full-time because I was using it about a week out of every month, it was way more than I could spend at the time. I was able to reinvest all of that into creating systems, hiring employees, and building up a business. It really kind of spiraled all out of the very basic Airbnb experience.

For anyone who hasn’t tried it and is new to the idea of entrepreneurship, Airbnb is in my opinion the perfect way to get in. It’ll teach you about hospitality, real estate, hiring, having employees, contractors, scheduling, all sorts of stuff just from customer relations and guest management down to how to handle finances and pay your taxes properly as a business.

Jasper:  Could you just tell us a little bit more about the systems that you talk about and the software that you used to manage everything?

Sid Kosatky: Yeah. That was the biggest eye opener for me when I first started was that well, I cannot do it on my own. I was starting with Google Sheets. I would have a spreadsheet that would track cleaner hours and a spreadsheet that would track client hours and I was kind of trying to track scheduling through those two spreadsheets and finding that cleaners weren’t showing up. I was losing track of appointments. It didn’t take a long, a few months of that, and having a big headache before I started looking into softwares like QuickBooks, which took over payroll for me, so that in just a couple clicks, I can now pay my employees accurately without having to do calculations. QuickBooks suggested that I use an app called Timesheets that provided the scheduling for my employees.

As soon as I integrated that app into my business systems, everything exploded. I immediately started having an extra 10, 15 hours a week. What this app did was it let me input my schedules clearly. All of my employees also have their schedules on the app. It would even send out notification reminders, so the cleaners would never miss appointments. I would get notifications if they’re late. Everything from there kind of floats smoothly. Since then, I’ve started kind of going crazy with hiring virtual assistant and looking into different softwares and even getting a manager to do the day-to-day tasks that I’d be doing so I can step back and look at the bigger picture of Airbnb.

Jasper:  What are the tasks that you currently do yourself?

Sid Kosatky: It didn’t take long before I stopped doing the cleaning. I stopped checking on properties, guest check in. Right now I am still managing the actual guest communication. I know there are lot of large companies and softwares out there that help with that, but for me with just a handful of properties, it hasn’t been too difficult and I enjoy doing it. I realized that that’s keeping me from focusing on the bigger picture and spending time with family. I’ve hired a full-time virtual assistant who has already taken over in just the last week all of the scheduling and coordinating with the cleaners. Now she’s beginning to help by write the reviews and speak with the guests and coordinate maintenance.

Now I’m able to work on things like creating my website, talking to the actual clients I’ll be working with, creating checklists and scripts and systems specific to each property that I’ll be managing, hiring and training employees. General entrepreneur tasks essentially.

Jasper:  They say that starting a business is fun until you have to hire your first employee. How do you find good employees and how do you manage your employees?

Sid Kosatky: I completely agree with that. It was tough. I kind of was inventing everything as I went along. I put up Kijiji ads to find clients, Kijiji ads to find employees. I started by looking for people who are already cleaners. I messaged them, as well as putting up an ad to hire people looking for part-time work. In the beginning, I would interview them each personally, then I would clean a house with them and assess how they could clean. Then I would have clean on their own and assess their work independently. With that I learned that about 20% of people just don’t even show up. More important I found in finding a good cleaner is finding a reliable employee.

To do that, I had to kind of create a company culture where the company is really about having fun, being part of a team, making money, helping people. Through that and advertising in that way, I’ve been able to attract some employees who really are just happy to come to work and want to do a good job. It only took two, three months of major headaches of doing that before I had my core three cleaners. At that point, I started putting up ads for new cleaners. I’d given my phone interview and then I would just send them to a job with the star cleaners that I have and I don’t even typically meet the new cleaners anymore. Really I do everything through text on my computer and I’ll text with my cleaners and I’ll ask them how the cleaning went with the new employee.

I trust their honest opinion as critical thinkers. Now I just have my employees training the new employees. One of those cleaners has risen up to be somewhat of an operations manager where she is actually doing the entire hiring process, finding new cleaners, scheduling them based on their experience and expertise. Now I’m able to step back once again and look at okay, I have this free time and mental capacity. What next? What’s the bigger picture? What can I be doing to really make sure I’m providing overall value for my customers?

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I think you’re touching on a very important point and I think from all the entrepreneurs that are successful that I’ve seen is one common denominator seems to be taking yourself out of the equation as a business owner and really becoming a business owner versus a business manager. Hiring people to do the work that you don’t necessarily have to do yourself, the work where you don’t really add much value or people can do just as good or almost as good as yourself.

I think a lot of entrepreneurs are kind of a little hesitant to outsource a lot of things because they’re worried that other people aren’t going to do the job as well as they do themself, but I think it’s essential to growing your business because if you’re micromanaging everything, then you just don’t have time to focus on the things where you can actually add value as an entrepreneur, which is growing the business, finding more clients, and just taking a bigger look at your business, and taking time to think about what’s really important about your business, how to make it grow. I think it’s a really important point that you touched on for any entrepreneurs out there or people who want to be entrepreneurs in the future.

I think it’s very essential. I also know some entrepreneurs who don’t do that and what I’ve noticed is that their businesses tend to not grow as much. Just to get an idea of the size of your business, can you let us know how many listings do you manage and how many people work for you and are those part-timers or are those full-timers?

Sid Kosatky: I have currently five employees who are cleaning for me who are looking for full-time. One of them she’s the operations manager who’s still doing a lot of the cleanings. Two of them I’m able to provide full-time work for and the others somewhat. I also have some contractors that fill in if need be. I just recently hired a full-time virtual assistant and what you were talking about before that people have the fear that no one can do what they are able to do. Just in a matter of having her for a week, she has taken absolutely everything, guest and client communication, spreadsheet or finances, and she’s put it all into these beautifully laid out spreadsheets that I never would have thought of doing, but she has seven years of experience as a virtual assistant.

Everything she is doing is 10 times better than I could do. I also have another freelancer working on search engine optimization, so that I will be kind of visible for people looking for Airbnb property managers when I’m ready for that. Now I’m actually managing just three full-time Airbnb’s. I’m able to provide them a lot of attention, but I am in the process of creating a new one. Working on getting about five new clients I’ve been discussing with and talking to landlords and developers around Halifax because I would like to create 20 plus new units for next summer. Like I said, I’ve been working really hard on the systems. I feel if we’re capable of managing 10, the systems are in place for 20.

Jasper:  Awesome. I’m pleased that you have specifically the virtual assistants. How did you find her?

Sid Kosatky: I kind of started getting into freelancers through Fiverr. Fiverr has all sorts of different freelancers for online stuff. I was using them to help design a logo, brainstorm business names. I actually found I got a few jobs myself on Fiverr as a freelancer. I created an ad to provide Airbnb listings for people. I created 12 different listings for a boutique hotel in Dominican Republic that was getting 0% occupancy. That was a lot of fun and really turned their business around. I’ve since gone into Upwork, which I found is a little more high-end way to find freelancers. Through interviewing freelancers there, I found I was having a lot of trouble. Just through networking I found a company that hires freelancers and trains them for the entrepreneur.

Where I’m at and rapid growth, I decided to use the money I’ve made so far from Airbnb and instead of spending a few months training a freelancer, I hired a company at a higher rate. They have spent a lot of time not only finding just a phenomenal virtual assistant, but training her up in my systems and training her in all the software she’ll need. Really all I have to do is delegate tasks. The company is called Cara Helps. C-A-R-AHelps.com. I was just really lucky to find them. They’re a pretty young company as well and they’ve been providing excellent customer service.

Jasper:  You only have three listings right now, right? Is your business already making your profits or are you breaking even or are you still lost?

Sid Kosatky: My house this summer was making about $5,000 profit a month. That really gave me the money to just put it all back into the business. The cleaning clients I was charging really low rates just to get into, but even with that I was making about $1,000 to $2,000 a month. Now I have put all the money back into hiring employees, salary, social media. Now I’m about breaking even. The company is growing rapidly and it’s just really hardly any risk for me. Getting into this there’s a lot of hesitation from people around and people were warning me that I could lose a lot of money. What if this doesn’t go well? A big one was what if you lose $10,000.

Luckily I didn’t have very much fear and realized that if I did lose $10,000 creating a business like this, it would be much better spent than $10,000 of business school because I’ve learned just endless amounts in my six, seven months of doing this.

Jasper:  What are some of the most important learning lessons?

Sid Kosatky: The most important ones have been definitely not to bite off more than you can chew. I haven’t had to turn away very many clients. Only a couple, but I pretty quickly at the start stopped advertising for new ones. Not taking clients outside of my area. Not taking clients with not so nice of Airbnb properties. Not taking more than I could manage myself. Now I’m still advertising in the way that I’ll only take as many as I feel like I can offer 100% of what the customer expects. The second big one for me has been just managing my time on my phone. I felt at the beginning that it’s so important to always be answering client requests, taking new cleaning customers, answering guests immediately.

That’s really not necessary, so I felt like it kind of got in the way of my personal and family life. I had to apologize quite a few times for being on my phone at dinner, part of the reason I hired a virtual assistant. Just creating those boundaries has been really important. It would have been helpful if I’d known that right from the start.

Jasper:  What are you charging for property management clients?

Sid Kosatky: I just took a look around at what other smaller property management companies were offering. I’m charging 15% to 25% of Airbnb revenue. If I am going to create the Airbnb from scratch, the customer is hands off and I do absolutely everything, then it will be a 25% charge. If it’s a little less work, the place is already set up, they have an Airbnb in place they just want to transfer control over to me and have me take care of it, then usually around 15% to 20% is where I charge for something like that.

Jasper:  Do you charge separately for the cleaning?

Sid Kosatky: Yeah. Originally I was charging an hourly rate. I have done some experimenting and I realized flat rate cleanings work really well. I can guarantee exactly what I’m going to give them. They pay a certain price and they will get it no matter what. I am typically requesting customers will add a $90 to about $120 cleaning fee to their listing and that will just go directly to my cleaning company to pay the employees.

Jasper:  Makes a little sense. Awesome man. I really like the story. I love how you went from zero to launch as the popular book about startups. In about six, seven months you were managing a bunch of listings. You’re breaking even. You have your employees in place and your kind of ready to grow your business into an even bigger business and you’ve learned a lot along the way. What I really like about the story is that it’s very sort of accessible to anyone out there. Like you don’t need a very large amount of capital. You don’t need a lot of sort of knowledge, a lot of experience. The Airbnb niche is still quite a new niche. I think it’s a great opportunity for people out there who have this dream of becoming an entrepreneur.

I’ve been myself. I’ve been an “entrepreneur” for seven years, although in the first couple years the things that I was doing was looking back it was kind of silly. I learned the hard way. Trying a lot of things that didn’t work and learning a lot from other people. I could say that the entrepreneur journey is a very exciting one. It’s one that comes with a lot of learning lessons. As you said, you think you learn more from doing your business than from going to like business school. It’s funny. I had a conversation with a friend recently and it’s interesting because entrepreneurship is just not really something that you can learn in school, right? Like doing business is just not something you can really learn.

You can only learn it through experience. It’s just something that’s like you just have to have the experiences in order to learn the learning lessons and that’s why oftentimes when you talk to successful entrepreneurs, they’ve often failed several times before they became successful with their business. Now I understand this is your first business, so I hope this doesn’t apply to you. I do think that Airbnb offers kind of a somewhat easy access to being an entrepreneur because you can just start with something very small, right? Even if you only manage one other listing, you’re already an entrepreneur and you’re already going to learn like some of the learning lessons that are very important in becoming successful.

Sid Kosatky: I couldn’t agree more, yeah. Immediately as soon as you start creating your first listing, you are an entrepreneur. Anyone who’s interested in doing so, I can’t remember the name of the episode, but you just recently had a guest. You really explained how you can start up your own Airbnb with less than $10,000. There’s a lot of good value on your show for anyone who’s wanting to do this on their own.

Jasper:  Awesome man. Well, I appreciate you taking the time and good luck with your business. I think your story is very inspirational for a lot of people out there. I would love to hear in the future how things go and maybe I’ll have you back on the podcast maybe a year from now and see where your business is at then.

Sid Kosatky: Yeah. I think there might be some big changes a year from now. Absolutely. Before I go, I’d like to give a quick shout out to Christine McKay who is one of my very first clients. She’s one of your all time biggest fans. She’s always sharing episodes with me she thinks I’ll find value in. She’s been really helpful. Having good customers and good business relationships is absolutely massive. It really helps get everything going.

Jasper:  Awesome. Well, Sid, thank you so much. For the listeners out there, I hope you enjoyed this podcast. Of course, on Friday we’ll be back with a new episode. I hope to see you then.

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