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Episode Number: 371

Episode 371: Following Your Passions & Navigating Airbnb Success by Building Unique Homes w/ Whitney Hansen

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Following Your Passions & Navigating Airbnb Success by Building Unique Homes with Whitney Hansen

Click Here to Read the Transcript for This Episode

After paying off $30,000 of debt in 10 months, paying only $472 for her MBA, and buying her first home at 19, Whitney Hansen discovered her love for teaching others how to get better with their money. She travels frequently, teaches college students about personal finance as an Adjunct Professor, and tests side hustles for fun. 

Whitney’s most recent side hustle includes unconventional real estate investments of building a geodesic dome and a flower pot Airbnb. We chat about the creative approaches to finding and developing unique properties, as well as the financial aspects of these projects and how to navigate the Airbnb business successfully. 

In this episode you will learn:

  • Why personal finances must be in order before investing in real estate
  • The importance of understanding local regulations, seeking professional help, and creating accurate cost estimates during the planning phase.
  • The need to consider multiple revenue streams when investing in short-term rentals
  • Why property owners should manage their own properties rather than use property managers and much more!

Check out photos of Whitney’s Cascade Dome and Idaho Flower Pot Airbnb below.

Timestamps:

  • 0:49- 14:42- Whitney discusses building a geodome which is a unique structure resembling a giant igloo and serves as a glamping site in Cascade, Idaho.
  • 14:42-25:07- Whitney discusses her unique project, the flower pot Airbnb, which was chosen as a grant winner, receiving $100,000 to fund the build.
  • 25:07- 36:40: Whitney offers advice for individuals considering building or converting properties for investment purposes. 
  • 36:40-38:41: What are test guests and how to find test guests opportunities in the Airbnb community
  • 38:41- 40:24: Whitney discusses the considerations & potential risks associated with Airbnb rentals, particularly in light of regulatory changes in certain cities and states.
  • 40:24-42:27: Whitney shares her approach to time management when juggling Airbnb management & her personal finance business.
  • 42:27-46:38: The importance of personal involvement in managing properties

Watch the video to this episode on YouTube below or by clicking here.

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Jamila Souffrant 0:49

Hey, hey, hey, Journeyers. Welcome to the journey to launch podcast this week. I have Whitney Hansen back on the show. She was first on the podcast back in 2018. Episode What was it 29. Like, can't believe that Whitney. So Whitney Hansen is a financial coach, speaker, and host of an award winning podcast the money nerds, after paying off $30,000 of debt in 10 months, and hacking her way to a $472 MBA. She bought her first home at 19. And she's discovered her love for helping others take control of their financial life. She loves in her free time to travel, she teaches college students about personal finance as an adjunct professor, and is such a creative who has developed and built a couple of projects that I can't wait to talk to her about. Whitney, welcome back to the show.

Whitney Hansen 1:40

It is such an honor to come back on I cannot believe 2018 feels like yesterday, but so far away. It's crazy.

Jamila Souffrant 1:48

I know oh my god. So I mean, a lot of what needs backstory will be in the original episode, Episode 29 at the podcast, but I don't mind on touching upon it here because I think it's gonna be interesting to talk more about what you're doing now. But let's just go back a little bit in where you landed in personal finance and how you made that your

Whitney Hansen 2:08

career. So for me personally, I think like most people, my childhood really dictated the way I viewed finances. My setup, like all of that origin story really came back from my childhood. And for for me, we'll go much more into detail on that in episode 29. But for me, it was watching my mom stay in an abusive relationship for like 27 years because she didn't have the funds to leave a situation. And so that's where I kind of had my 16 year old aha moment where I was like, Wow, this sucks, like, we got to be able to take control of our finances. Because if you don't, you could be stuck in a situation that's truly unhealthy for you, and have no way out or so it would seem. So that was kind of my entry point into personal finance. And then I went off to college, studied accounting at Boise State, graduated with $30,000 in debt and had my first like, come to Jesus moment where I'm like, Oh, that is a lot of money. I've got to figure out a way to get out of it. And so I buckled down and worked as a nail technician doing manicures and pedicures nights and weekends. And by day I was a staff accountant and doing tax returns and external auditing, like the weirdest combination. And between that I was able to pay off my 30,010 months. So that's kind of where I started helping people just on a coaching basis and my business kinda came from that experience.

Jamila Souffrant 3:28

Right? And so you spent a lot of your years coaching and talking about money, which you still do, but I love you've always been creative and like hands on. I remember I feel like as Facebook friends like you shared like you did a chimney it wasn't a chimney or fireplace remodel. Fireplace? Yes, I did. You were like, I'm gonna do this myself. Like, I'm not gonna like hire anyone. I'm like, wow, she's really good with her hands and like construction. How did she even know to do that? So where did that come from? Were you always like, good with your hands and into just remodeling things? Yeah,

Whitney Hansen 4:00

it's really funny. That also came from childhood, my dad ran a pallet distribution company, which is like a fancy way of saying pallets that goods are shipped on in semi trucks, he would buy those, fix those up and sell those. It was like really strange business. So when I was a kid, my way of earning cash or earning money was to go out there and flip pallets, so I would have to use saws and hit nails. And so that has always been ingrained in me. And so I didn't. I think that's why I'm so comfortable with that stuff is I just have been doing it since I was a kid.

Jamila Souffrant 4:34

Yeah, yeah. And so this leads kind of us into what you've been doing for the past couple years. Which by the way, I don't know how you have all the time to do this. But we'll talk about time management today. And I want you to explain a couple of projects that you have, but you built a cascade dome or geo dome, and he also have a flowerpot on Airbnb. And so look guys, it's a literal flowerpot. I can't wait to show you guys the picture and like that, but tell me let's first maybe Talk about the cascade down where it is what it is. And that process of building it.

Whitney Hansen 5:04

Yeah, the dome was our first entry point into this style of real estate investing. I was always drawn to real estate investing. But the idea of like having long term rentals, the house I'm in now, it has been a long term rental, like I've dabbled in this over the years. But it never really, really spoke to my soul. And so that blend of creativity and guest experience and more of the hospitality side was always very interesting to me. So trying to find a way to blend, how do you make money off of real estate investing, but still combined my strong points? That's where that really came from. So the dome was kind of our experiment to see can we actually make money off of something weird and unique? And it's so funny, Jamila, we had this lot saved on my Zillow because I scroll Zillow, like, it's my part time job. It's terrible. But I had this lot saved on my phone for almost a year. And Tony and I were kind of thinking more seriously, like, sorry, Tony,

Jamila Souffrant 6:04

is your partner, right,

Whitney Hansen 6:05

Tony? Yeah, Tony is like, okay, don't judge me guys. He's my 20 year boyfriend from high school. And we are still not married. We know. We know. But he has. He's been there the entire time. So we got into this situation, we're like, Okay, let's take it seriously. Let's go Lotte Shopping and see what we can find. And so we kind of jokingly came across a lot when I'm like, let's just go look, it's been on my list for a year. I don't even know if it's a good law, we'll find out. And when we looked at the law, we walked down there were like, Yes, this is the one. This is beautiful. It has these massive granite boulders, it's on a very steep slope on a mountainside. And we just kind of fell in love with it. So when we started to get into that property, we made an offer, it got accepted. And we went into the planning phase. And that's where we realized that lot, did not have utilities, we knew that going in that was actually not a deal breaker for us. But it was also one of those lots where a traditional house wouldn't really work on there. Because of those big boulders, it was just too much. And so we kind of went back to the drawing board and said, Okay, well, maybe we can do something that's more along the lines of glamping, or a little bit different. And we stumbled across geo domes, and that was kind of where our entry point into that market. So

Jamila Souffrant 7:22

where is the slot? And then describe to me what a geo dome is.

Whitney Hansen 7:27

Yeah. So a geo dome is essentially a temporary structure. It's very similar to a yurt if you've ever seen those. And so it's almost like a PVC canvas material on the outside. It looks like a giant igloo and it has a panoramic window that is like 12 feet wide and nine feet tall. It is so so cool. But it is essentially a fancy tent. And so that's what a geo dome is. And this is located in cascade Idaho, which is two hours from where we live.

Jamila Souffrant 7:57

Okay. All right. So you guys, you've been thinking about potentially buying some land to build something, you find the slot. You go check it out. It's really in the middle. So I can try to picture what I've seen pictures of the area. But I'm a city girl, right? So for me anything that looks like it's trees all around. I'm like, Oh, this looks like like, how far is two hours from where you live? But how far is it from like, I don't know, miles from another property or like civilization? Yeah,

Whitney Hansen 8:25

that's a very good question. Because a lot of people were like, Am I in the boonies here? What is this? So Cascadas. It's a very small, kind of touristy town, there's a lake there. That's a state park. And so there, it gets a lot of traffic, but it is about a 15 minute drive down the mountain into the city. So that's where you'd have small gas stations, grocery stores, some restaurants, things to do there. So it's about a 10 to 15 minute drive down the mountain. It's only about three miles from the city. But it's mountain road. You know, you got to go a little bit slower. It's all dirt. But you do have neighbors. We have a full time neighbor. That's not even a block away. She's super sweet always looks out for the property for us. In

Jamila Souffrant 9:08

a house in a house that I don't. Okay. Very, very.

Whitney Hansen 9:11

Could you imagine? Got a dome village up there. That would be awesome. So yeah, there's definitely neighbors, but I would say most of the time people are either our viewers or weekend campers in that area.

Jamila Souffrant 9:24

Got it. Got it. Okay, so now we have a sense of kind of where we are. You say to yourself, oh, a dome? And because that's really because you couldn't put a house like a different type of structure there.

Whitney Hansen 9:36

Correct? Yeah, we probably could have it just sort of been very expensive.

Jamila Souffrant 9:39

Right? Right. So talk about this process now of deciding to go with the dome. And then you guys built out and did everything I remember following you. And that account where you were building the steps like you did literally everything. So talk about what that was like and planning for that and the cost. I think the cost is important to hear.

Whitney Hansen 9:56

Yeah, it was a crazy process. So we're pretty Andy, but that was next level even for us. So essentially what it entailed is you have to build a pretty strong foundation. And that foundation has to be engineered, it has to be permitted by the counties like they have to make sure it's safe. And so once we had that process done, we did the work ourselves, which entailed drilling through rock, it was digging these massive footers, it's crazy, I'll have to show pictures of that, because it was pretty wild. But building the strong deck foundation first, and then the dome itself is just a kid. So you have metal struts, you put it together in a very specific order. Once that's secured, then you throw the canvas on top of it, and then you zip up the window. And that's kind of how it works. But it took us about a year and a half, we kept getting snowed out. So mountain climates, but it was a cool process. The total cost including the land was about $75,000. That would not be the case today. We bought the lot for 35,000. Now it's about 150. If we were to do something similar, just a

Jamila Souffrant 11:02

lot itself, just a lot. Yeah. And that doesn't include the labor obviously, the if you had other people doing this, this would have been

Whitney Hansen 11:09

oh my gosh, it would have been so expensive. Yeah. Yeah.

Jamila Souffrant 11:13

So all right, there is no, like running water electricity. So when you first did it, were you thinking this is an investment where I'm going to have other people come and rent it out? Or was this for guys going to be for you? What was your thought process around that?

Whitney Hansen 11:28

It was a mix of both. But it was primarily designed to be an Airbnb rental. So that was kind of our sole intention. But we initially knew that we want to stay there occasionally to we want to enjoy the property. It's beautiful. But there's no utilities, there's access to utilities, eventually, it's just very cost prohibitive in mountain areas, I don't think people quite understand that. So to give you context, for us to get electricity, not even two blocks away would be close to $25,000 on the low end. And so that's just as hopefully get the electricity. If they run into rock and they have to blow out some of the rock, it's even more expensive. So that's just one portion, a well would be upwards of 80 to $100,000 to get clear down the mountain. And so when we say like these lots, sometimes you find them for really good deals, they are so expensive to develop. And so that's why we definitely had to be a little bit more creative there.

Jamila Souffrant 12:23

Right? But you do have like so even though there's no electricity, you do have amenities. And I think there's like a hot tub, or steam room

Whitney Hansen 12:32

sauna. Yeah. So we have a woodfired sauna up there, we have a couple little solar panels, that is enough to run a solar generator that basically powers a single light, it charges your devices. We have a porta Potti company that comes every single week. So they're on our roster, they come every week no matter what. And so it truly is a camping experience, but people love it. So it's been really fun.

Jamila Souffrant 12:56

Yeah, and how far is I guess the nearest airport for people are not like in that city or state? Probably about two hours that would be flying into Boise. Right, right. So Are most of your renters local, like live in the state? Ironically,

Whitney Hansen 13:10

it's a good mix. So it's a lot of people that are road tripping, or just checking out Idaho, we have fantastic outdoors here. So we get quite a few people from out of state that are just exploring the hot springs and the forest here. So it's a good mix. But I would say it leans more towards local people.

Jamila Souffrant 13:28

Right. Now during this time, you know, you are an entrepreneur, you were you still teaching? Yeah. How are you fitting this all in your schedule, because I know that you didn't like factor in how much you like your your pay for doing the work yourself. But how to impact like your business, and also fulfill a client's needs and your students needs how to do manage that.

Whitney Hansen 13:50

That's the tough part, I think. But fortunately, for me being self employed, I have a lot of control over my schedule. So when I'm doing a build, and when I'm focusing on that, specifically, I will do calls Monday through Wednesday. And then Thursday through Sunday is my time to either catch up on work or to go do the build, like actually go do the work. And so I've structured it that way. And I just know during a Build My Income is going to take a little bit of a hit. I can't take as many coaching clients and that's okay. My partner Tony has a normal nine to five plus job, I would say. And so most of the time when we were building the dome, it was just on weekends Jamila. That's all we could really do. We'd go up there Friday, we'd go Saturday, Sunday, and we'd get a little bit of work done. And I would say that's probably partially why the timeframe was also a year and a half is because we were just doing it in our free time.

Jamila Souffrant 14:42

Right, right. So now let's talk a little bit about your other project, which is a more recent one, the flower pot. Tell me about how that came to be because it literally is a flowerpot that you can rent on Airbnb. And so tell me where that is and How you got to this concept and all the things.

Whitney Hansen 15:03

So the flower pot was, it was kind of a funny story. We were just finishing up the dome. And my mom had helped us quite a bit on weekends to at the dome, just for fun. She's really into that stuff, too. And we were driving back to Boise after wrapping up the dome. And we were kind of thinking like, wow, what are we going to do now, like all of our weekends are totally, they're dying, like, oh my gosh, we actually have free time. This is crazy. And so we were all just kind of laughing about like, I don't know what we're going to do with all of our free time. And around that same time, I came across this Airbnb OMG fund. And this was a global call that Airbnb put together and said, Hey, we're looking for creatives, DIY errs, architects, builders, anybody that has a unique idea for a property that has never been built, the world has never seen, we want to see that. And the catch was, if they chose one of the ideas, there was 100 winners that they were going to choose from, they would give you a grant of $100,000 to help you fund the build. And so I kind of jokingly submitted this idea tongue in cheek not really thinking it would really go too far. And it kept progressing into different phases. And so that's where we finally got to the point where it was actually going to happen. And my mom was wanting to start a flower farm on some property that she owned. And so we thought a flower pot would be kind of cute with this like that it fits. And so that's where the idea really came from.

Jamila Souffrant 16:27

So wait, we you submitted the idea as originally a flower pot, or evolved into that? Yeah,

Whitney Hansen 16:33

I submitted it originally as the flower pot, same time that my mom's like, hey, a flower farm sounds kind of fun. And so we were thinking like, there's no way this would actually win. And it kept progressing. We're like, holy crap, like there were over 10,000 global application. So we're like this idea actually has legs. This is actually something that could go pretty far. So that's where it all came from.

Jamila Souffrant 16:55

Describe the flowerpot itself now that it's completed. It's

Whitney Hansen 16:59

huge, actually. Okay, so the flower pot stands 24 feet tall from ground to the total roof. And it is quite seriously looks like a giant flower pie. Like it's the funniest thing. So when you walk in the walls taper out so it has a bit of an angle. And there's it was designed to be a little bit more moody inside to help you feel like I'm actually in a flower pot. And so it's got a sleeping loft with a queen size bed. It has a sofa couch that you can convert so you can sleep a couple of your buds. It has a beautiful bathroom. We did all of the interior ourselves. And then on the outside, it's just surrounded by nothing but farmland. It so it's truly a beautiful, beautiful property.

Jamila Souffrant 17:42

And where is this located?

Whitney Hansen 17:44

This is in Burleigh. So this is two and a half hours from Boise. Boise

Jamila Souffrant 17:48

now so with this grant that you found, do you own the land that it's on? Do you own the building or Airbnb have a portion of it?

Whitney Hansen 17:55

No, that's a great question. So there are no legal rights from Airbnb to the land or the property. The land was farmland that my mom had already owned like her. Her dad had farmed it when she was a kid. So it's kind of a sentimental piece. And so we already had the land. The grant helped us with the actual build. And then yeah, Airbnb does not have any rights to the property.

Jamila Souffrant 18:16

Oh my gosh, I love this. And for many reasons, because I'm a big proponent of just like there's we have sometimes these random thoughts in our mind, like things that have never been done. And it's like, if you told someone they'd people would think, you know, maybe you're out of it, or that's impossible. But I just love hearing things like that and seeing this and hopefully it inspires other people because it's like, literally, oh, flowerpot. Now there's a flowerpot Airbnb building or place that people can go and just shows you that there are some things in your mind that feel crazy or impossible. But it can be done. Now I know like there was some help from Airbnb. But without that do you think you would have maybe was that helped to push you to do it? But do you think you would have done this as your next project?

Whitney Hansen 18:57

I don't think so. Actually, I think the fund was enough of a financial push to where we actually truly had some big money on the line, that it made it work. I don't think I would have done that. Historically, though, at all, I think I was actually planning on just taking a little bit of a break from the financial side of it to just, you know, let me recoup my savings and save up for the next project. So I don't think we would have

Jamila Souffrant 19:20

so even though they gave you 100,000, how much more Did you probably have to put in? I'm assuming you had to put in more was it under budget?

Whitney Hansen 19:26

Oh, no, no, no, I wish it was under budget. So the $100,000 still gets taxed almost like a lottery winning. So you still have to pay taxes on that. So even if you have 100,000 You don't actually have that much. So we ended up I think it was $78,000 is what we truly had to work with. And so in addition to that, we had to drill a well get electricity, do a septic system, all of that needed to be installed, pre build, and then the build itself. So with that and utilities, I think we're looking at about $160,000 There's including the fund. So that was the total cost to just develop this tiny flower pot house.

Jamila Souffrant 20:06

Wow. I mean, obviously from the onset, it was going to be Airbnb rental for you guys. How long? How long does the process take? We

Whitney Hansen 20:15

broke ground in April. And then we launched it officially in December. So the build portion was, what, seven months, seven, eight months, maybe a little bit more. And then the actual process started, it would have taken about a full year to get your engineering your plans talk with the city. So I'd say a full year process.

Jamila Souffrant 20:34

And just for curiosity sake, what were the other Airbnb grant winners ideas?

Whitney Hansen 20:41

So cool. There are incredible people out there. So one of my favorites is it's a planetarium style home in the Ozarks. And the way they did this is it's two towers, and it has like a dome on top. But one of the domes is totally clear. So you can stargaze from your bed or just like laying there. It's incredible. So that's one of them. There was a giant teapot in the UK. I don't know if they've actually launched yet, but that one was really cool. There's a rainforest beehive home in Costa Rica. The ideas are crazy and amazing.

Jamila Souffrant 21:18

Oh my gosh, I love that. Now when you were thinking about this, because you know you are a finance person, even for the dome, and then the flowerpot Did you were you running numbers on Okay, once we do all this and complete this? How much do we need this turned out like to make this profitable at some point? Like how did you run those numbers? And

Whitney Hansen 21:37

what did it look like? Yeah, it's a great question. So all of these things, I would never do it if there wasn't some potential upside, it's just too cost prohibitive too much time. So with the dome, specifically, I will share pretty exact numbers. So our first year of running that as an official business, our revenue on the dome was $45,000. And that was with really limiting our calendar at the beginning of the year. And so your biggest cost is generally either your mortgage or your payment for the property and your cleaners. Those are the ones that it just costs a little bit more, you just have to accept it. But from that dome, we profited a little bit over $20,000 last year. So that was off of a $75,000 investment. So it's pretty crazy. So that's the dome, and then the flower pot. The way we financed that one as well is of course cash out of pocket. But we also had to get what's called a land equity loan. And so if you own land outright, and your land has improved in equity, much like your house, you can get a loan to take out some of that equity to help you with the build. So we did that. And between that and the cash like so our payment on that site, just shy of $500 for like the actual mortgage portion of that. So it's really not too bad. So that one we expect to probably bring in about $55,000 its first year, and I believe the profit will probably be somewhere around 30,000. So that one's a little bit cheaper to run.

Jamila Souffrant 23:02

You obviously have a skill and talent. Have you ever thought about turning that into a business, whether it's like consulting to help other people do similar things with their ideas? And what does that look like for you?

Whitney Hansen 23:12

Yeah, I don't know yet. I think about it quite a bit. And I'm just not totally sure. Part of it is a little bit of imposter syndrome. I don't feel like I'm skilled or knowledgeable enough yet. And so I would like to have a couple more properties under my belt before I feel like I could, in my own ethical way, take people's money and give them advice. So I don't know, I don't know if this will ever become my full time job, but I'm having a heck of a time with it. I think it's just a lot of fun.

Speaker 1 23:40

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Jamila Souffrant 25:07

I know you had some tips for people who are also maybe thinking about building something or converting something and becoming an investor, can you share what that would look like for someone who's thinking about doing something like this?

Whitney Hansen 25:20

Yeah, I think the first thing you have to do is look at your own personal finances. And I hate that we always have to go back to this. But it's kind of true, if you don't have a good financial foundation, real estate investing, even if it's long term rentals, it can literally bankrupt you, if you're not careful, it is incredibly expensive. There's a lot on the line. So having your own emergency fund, having some cash reserves for properties, and then also making sure that your credit is in a good place so that you can get loans and you can leverage if that's the style you choose to go, that is all going to be first and foremost, the biggest key to getting started. And so I think that's the part that most people skip, we just want to dive into, like, I want to make money immediately. But it is, it's a business at the end of the day, it is a business 80% of businesses fail, you have a lot working against you already. And you don't want to drag your financial life down with it. So that's the first thing that I like to tell people.

Jamila Souffrant 26:17

And it's start right and that's why getting financially sound before going to the next level and doing the next thing is important. Okay, so that's step one. And you know, someone's thinking about, I want to get into real estate, maybe it's traditional real estate, or maybe it's like want to build something is making sure your personal finances are in order. Okay, what is something else they should consider or do to get started,

Whitney Hansen 26:35

the very next step, like let's say you have your finances in order, and you're ready to start actually diving into some type of real estate investing or a unique property. The next thing you're going to do is you're going to go talk to your city or your county, you want to talk to the building department. And you also want to talk to planning and zoning. Why we are doing this is because city and county regulations can immediately shut down your business, if you don't follow by the rules and the laws that they have in the different counties, you truly have no business, you're walking on eggshells until they knock on your door, and then you can no longer make money. So what I would do is I would not try to be sneaky about this, I would actually go directly to the county or city, I would say here's what I'm thinking about doing. Is that allowed on this lot? Is that allowed in this county? Can I do something like this here. And they will tell you like their job is not to be a jerk like that. They really do want to help you. And so the very next thing you want to do is go talk to them first.

Jamila Souffrant 27:31

Right? That way you can figure out this is even feasible plan that you have, I find that like I'm thinking about okay, if I wanted to do some unique structure, like I'm thinking New York, and I'm just assuming like it's really hard to do anything in this city. So that's where maybe being in rural areas or different parts of United States, that's beneficial. Yeah,

Whitney Hansen 27:52

exactly the case. And of course, if you're in an HOA area, there's no way they're gonna allow a geo dome or a giant flowerpot like it's probably just not going to happen. So you do have to like look into your CCN RS as well to see is it even allowed say that again, and tell us what that means. Oh, CC and Rs. That's all the covenants and all the crap that your HOA will tell you, you can and cannot do with your property. Got it, which is great. That's why we don't have you know, bright colored houses, sometimes in areas where it doesn't fit. But it usually doesn't play nice for short term rentals. Right? Right.

Jamila Souffrant 28:27

Okay, so what's that next step?

Whitney Hansen 28:29

So the very next step is to dive into your research phase. So once you've talked to the county, you've got your personal finances in order. That's where you're going to start to see what areas might I choose to invest in? And what do I need to see, for me to feel good about this as an investment, there is a lot of websites that help one of my favorites is air dna.co. And so air DNA aggregates all of your vacation rental by owner, your verbose and your Airbnb is in one singular place. And from there, it's really cool, because it'll show you occupancy rates, which how often is this place actually rented, it will show you average revenue, it's going to give you a really good idea of what all of the different properties in your area that are short term rentals actually look like from a financial standpoint. And it's fairly accurate. It's actually pretty good data. So you start to make a list of all of those different things. And then you can start to see, okay, what is that occupancy rate that I can possibly expect to then start to run your estimates, I always go a little bit lower. I don't expect anybody to ever be 100% booked. That's very unrealistic. And so you can usually find like about 40 to 50% for your first year, depending on your area. So once you have all your numbers, then you can start to play around with your different rates. How much do you want to charge per night? How much is your cleaning fee need to be? What are your estimated expenses, and so you're doing all of this stuff before you you've ever put money into a project. And this is going to tell you, Okay, I need to rent it four nights a month for it to be at least breaking even to cover the costs. So if I rent it for five nights, and I actually make a little bit of profit, that's cool. So you start to see what you're you feel comfortable with. But you have to do that research phase,

Jamila Souffrant 30:18

right? Okay, so step one, check your personal finances, make sure they're solid. Step two, like talk to the city to the town to make sure that whatever you're thinking about is legal and feasible. Step three, you gave a great resources. Now say that one more time, err dna.co. Air dna.co. By the way, we're going to put all the links in the show notes for this. But there you can research to see what the market rates are in the current occupancy of similar properties that you might be thinking about. And you can do this for your own like, even if you want to, like turn your own home into or portion of your home into Airbnb or short term rental.

Whitney Hansen 30:54

Right? Exactly. So even if you only want to rent out one bedroom, you can still use that same website. And you can see how many different properties are a studio or a shared home. So it'll still give you that data to you just have to dig a little bit deeper. Okay, so step four, what's the next step. So the next step, once you have all of that information, and it's all guns ablaze, and you're ready to go, then what you want to do is you want to go talk to a drafter. So this is if it's required, if you need some type of engineering, you need some blueprints, you what I found is actually a drafter is very effective. And they're a little bit cheaper than architects by a couple $1,000. And so the way it works is you will have probably some like back of the napkin sketches of what you want your property to look like, you take those over to an architect and you say this are a drafter. And you say, this is what I'm thinking of doing. Here's, you know, I want it to be kind of small, I want it to be big, like whatever your searches, and they will help you create blueprints and designs that any builder can look at and go execute on. So that's a key piece. And then part of that that plan process is you have to have it structurally engineered for most cases, even if it's not required, I probably still would do that just for peace of mind. And so then an engineer will go and run some calculations to say yes, this is a safe building, if we do these certain things. And so they're gonna give you what's called a redline, you take that back to the drafter, they make those adjustments. And then you can take those plans and go turn them into the city or county. And that's how you get your building permit. So then you're ready for the next step, which is finding your contractors and getting all of that stuff lined up.

Jamila Souffrant 32:37

Got it? So is that step five, so all the drafter engineering the kind of back and forth the iterative process that's, you know, kind of maybe in one step, and then the next step is now looking for contractors, do you do you at this point, know what the cost? Because I'm, I'm feeling like, at some point, to have an idea would be helpful to even know if you can do it?

Whitney Hansen 32:58

Yeah, well, and the weird thing, too, is with unique structures, in even tiny houses, people think if it's a tiny house, or it's kind of a different house, that means it'll be cheaper. No, no, that usually means it's more expensive, quite seriously, because you don't have the economies of scale. So at that time, you have an idea, once you have those plans you can take, this is one of my favorite tips. When you have your plans, take those over to a building supply store, or like your Lowe's or Home Depot. And you get what's called a takeoff list. So a takeoff list is a list of all of the different materials that you need, how many two by fours, how many windows, how many doors, they will aggregate that all in one place. And then you can start to shop around to see how much is actually going to cost you is the same process if you were to like build your own custom home for yourself to live in. So you are just functioning as the general contractor here where typically you would hire somebody that is about 20 to 30% more, and they would do all this on the back end for you. But it's really not that hard. So if you can get that process at least going you'll have a better idea of what it's gonna cost. Right?

Jamila Souffrant 34:05

All right. So you take that you plans to a contractor or I'm sure you're shopping around like what you probably did this for the flower pot, right for the flower

Whitney Hansen 34:14

pot. Yep. So for the flower pot was a little bit more complicated of a build. And we were on a slightly shorter timeframe. So I didn't have the luxury to be able to do the stucco and the framing and all of that stuff on my own. Nor did I even want to that's, that's beyond me, man. But when you're looking for contractors there are I didn't realize this was such a problem but there is so much scams and so much fraud. And the only way if we got we got ripped off on the dome a little bit so that's the only way I actually knew this. But when you're looking for a contractor, you want to make sure that they are registered in your state. So they have some type of like legal license to be able to do this. And you also want to make sure they are insured out A minimum, okay, registered and insured. So what would happen is if you hired somebody that is not registered in your state can't legally operate a construction business, then you're taking on all of that risk yourself. And you're also taking on all that liability yourself too. So if somebody gets hurt, it's 100% on you. And we don't want to be in that situation. So you want to reach out to contractors, get their registration number, get their proof of insurance, and get an estimate from them. And the rule of thumb is, you're going to call at least three different contractors, for every part of the build three different framers, three different door installers, three different foundation people at a minimum, and then you're going to start to see like, what's a normal price? What's too high, what's way too low, and what's about average, so you'll start to learn that from doing that process.

Jamila Souffrant 35:50

It sounds like a lot of work, but it's worth it to do it upfront and be thorough, because of what can happen in the back end, if it's not done, right.

Whitney Hansen 35:57

It's significant. And of course, like once you start to settle on maybe to different contractors, and you like their style of work, get some testimonials like it is you're right, you're going to spend a ton of money, ask for those references before you hire them, and never give them all of the money upfront. Ever just take my word for it, it's a really, really bad way to go, you will get screwed over. And that's the same if you're doing like projects at your house, if you want to hire a plumber, same thing, you have to go through that same process.

Jamila Souffrant 36:27

Well, I was just gonna say like this step actually is like, relatable or applicable to just just any project you're doing at your own home right now, like, so important just to do was that the fifth step, or the sixth?

Whitney Hansen 36:40

So the last step we have that was the fifth. So once you have your contractors, you're moving right along. The last part of all of this is actually running the business. So you've got your Airbnb, you're launching it, you are starting to run the business, the biggest tips I can give people there, even if it's only renting your spare bedroom or your basement, get some practice guests in there. They're called Test guests. And their whole job is to stay for free and give you feedback. What was kind of awkward? What was really hard to work? What do you need to create a tutorial on because it was really confusing. So they're gonna help you get that process together. And then once you have that you can officially launch the business and start focusing on the hospitality side, which is I think the fun part.

Jamila Souffrant 37:25

Yeah, well, first of all, how do you become a test guest? Like, how do I become a test guest? So I can stay somewhere for free?

Whitney Hansen 37:31

For sure. Right? So one of the biggest ways, this is a great question. And we utilize a lot of like local influencers. And so we will, you don't have to have a huge audience, either. I think a lot of people think you might need to, but there's a whole concept of like, use user generated content, which is essentially people that are good at creating videos or pictures, but maybe aren't really the best on social media, you can still reach out to some of those properties. And if they have one property, they probably will have another so just put your your name out there, reach out to them on Instagram and say, Hey, if you ever launched another business and you want to get a test guest in here, I would love to stay give you feedback and create some content for you while I'm there. It's a great way to go.

Jamila Souffrant 38:18

So test guests is a real thing. Like people in Airbnb world are just renters know about this is not like something Yeah, yeah. Okay, that's I didn't even know that. That was like a thing.

Whitney Hansen 38:27

Yeah, you could also look in Facebook groups to if you were just to put your name out there and just say, Hey, I would love to be a test guest. If you ever need anybody to stay here, I'm very reliable. I give great feedback. And I can also create content, they're gonna say yes.

Jamila Souffrant 38:41

And now when it comes from the Airbnb side, I know there are different places you can have the list. I don't know if there's the flowerpot like you have to listen on Airbnb or yes, yeah, exactly. Yeah. So there's some exclusivity there. With that, because I know I think it was New York, or there's some cities and states where they're trying to like push some changes where Airbnb and it was just like, if you're depending on this business, you know, regulations can change. So what are your thoughts on that and how to navigate maybe what you should be cautious about when you're thinking about this type of business model.

Whitney Hansen 39:12

Usually, the thing you want to look at is what is the precedence for short term rentals. So if you are in a great vacation destination, generally speaking, this isn't tried and true. But generally speaking, that economy depends on tourist dollars. So if they depend on that, you're usually a little bit safer, you might have some additional regulation you have to follow. But generally speaking, their economy depends on those dollars coming in. So that tends to be a good way to go. But I think with any type of investment, you have to look at what's the downside. So for us with the dome, we looked at what happens if they say, No, we don't want this anymore. You can't rent the dome. Okay, so we could take it down. And we still make money because we have equity in the land now. So even if we sold we're still coming out ahead. What The flowerpot, could we turn that into a long term rental probably might be a little harder to rent, but we definitely could. And so I think anytime you're investing that much money into truly anything, you just want to look at different revenue streams to make sure it still makes sense as a short term rental, it still makes sense as a long term rental, and you still have some equity that you're building up. So that's always the Pro to at the end of the day. Yeah.

Jamila Souffrant 40:24

Now, I want to go back to a bit of your time management and like what tools you use to help you manage your time. I know that like when you were listing, like all like the steps and then getting quotes all these builds? Like, are you keeping everything in a spreadsheet? Are you one of those people where everything has to be on your calendar? How are you keeping it all together? When it comes to managing these different parts of your life?

Whitney Hansen 40:46

It's a great question, because it's a little combination of everything, depending on the project. If it's something where I have to chat with my mom about something on the flowerpot, we have a pretty detailed Google Sheet. And one of the tabs on our Google Sheet is contacts. And what we'll do is we'll like list out Who do we contact? Who do we talk to? Do we leave an email? Was it a voicemail? What's their phone number? What was the date of last contact? Do we need to follow up? So we try to track that. So if she needs to pick up where I left off, it's very easy to see like, Oh, this is where we stopped. So that's like one way that we organize that. But I kind of live and die by my calendar, I really do. I will try to batch my time and say like, Okay, here's some coaching calls. But I'd be lying if I didn't say sometimes I'm going for a walk and calling a vendor or communicating with a guest. It is when you're in this type of business, you're you're kind of always on it is very different than real estate investing that very much is hospitality.

Jamila Souffrant 41:48

Right, right. And then you have like you said, your other not just your Airbnb stuff, but just your business, your personal finance business, too. Yeah,

Whitney Hansen 41:57

exactly. I don't think it's all that bad. I think a lot of us are pretty good at juggling multiple things. In general, it's just a season, you know, if you're going to do a build, you're going to be a little bit more chaotic during that time. And then it's going to get pretty chill. And you're going to feel like, why am I getting paid, I'm not doing anything that's really weird. And then something will hit. And it all happens to all the properties at one time. So then you'll have to troubleshoot and brainstorm that. And then it'll get into a wall again. And so you just have to be aware that that's going to happen.

Jamila Souffrant 42:27

And you don't have property managers, I'm assuming he does you manage them yourself. Yet,

Whitney Hansen 42:33

this is actually a tip that I wish more people would do is I wish they were more involved in their properties. I've seen so many really, really amazing houses and cabins that would do so Dane, well, but they went with a property management company who just views them as another number. And the guest experience suffers, the communication goes down, you start to lose that soul. And I think that people want to do business with actual people, it makes us feel good. And I think you kind of lose some of that. So the only time I would consider a property management company, is if it was a property that was maybe overseas and I don't speak the language very well. I would consider it there for sure. But I think for most places, if it's within a few hours of your house, like you can totally do this. It is truly not that hard. It's a pain in the butt. But it's not that hard.

Jamila Souffrant 43:22

Yeah, I would say we recently went to San Francisco, and we stayed at an Airbnb. And you know, it was the owner, and the owner was the one that we're communicating with. And you could just tell like, they were like, We love our property. And it was such a like, Well, nice taking care of property, and how much they loved it and then how much love they put into it to make sure we as guests, like knew what was going on. And I was just like, so I felt that versus if it was just like property manager who didn't care. And because we knew they cared so much. I mean, we would have respected it anyway. But because we knew how much they cared and respected it and the way they spoke, were like, of course, we're going to take the best care of this place. And so it created that personal connection to

Whitney Hansen 44:02

Yeah, it really does. I have a lot of people ask about that to where they're like two guests just trash your place. And you know, you're getting so many people in the door, we had over 150 people this are just reservations at the dome last year. And I will say you would think that's a lot of wear and tear on the property. It's actually really not like people generally take really good care of your place. They're only there for a night, maybe two. And you also have your cleaner coming in every single turnover. So you have lots of eyes on that property. So your maintenance tends to be better. I just I don't think that the trashing of places is really something that I've experienced. I'm sure it will happen eventually. But I think it's when you're more detached from your property and you only view it as a moneymaker. I think people see that and start to treat it that way too. And so I do think there's a huge difference. Yeah,

Jamila Souffrant 44:55

you know, something came into mind just now because I had that very pause. Did Airbnb experience and then I also had another, you know, not as nice one in the sense of it was a resort or destination place and it was approved to be an Airbnb. But you can tell that the people around the Airbnb the other owners, property owners just didn't care for that being at Airbnb and so a lot of complaints even though like we weren't doing anything. And so I felt like that also is something to be to take a note because while the city or you know, you legally can be there and do that, if you have neighbors or people around you that are just not with that, which, you know, I can understand why a neighbor or someone living in a community wouldn't want people coming in and out. But that also is something to consider. It's just like, what that neighborhood is like,

Whitney Hansen 45:44

No, I agree. And I think that's one of the perks if you're doing a lot of the work yourself, or if you are actually on the property a lot is you get to know your neighbors, and they start to see like, oh, no, they're out there hustling. Like, we can't fault that. And so I think having that relationship with your neighbors is very key. All of our neighbors at the dome, we know them, they have our phone numbers, we text on occasion, like so there's no issues there. And I think the way you can set up your property too is just by trying to be respectful of other people around you, our neighbors in the dome all have dogs. So we don't allow dogs at the dome that directly limits the amount of business we can have. But our relationship with them is a little bit more important. And I would hate for anything to happen with their dogs. And so you know, I think if you just set it up in a respectful way, your neighbors will take no and they generally are pretty kind but occasionally you'll you'll come across that situation.

Jamila Souffrant 46:38

Yeah, okay, Whitney, please tell us just like, what you're up to now, like what things you're working on, and maybe you're taking a break. And hopefully you are like can relax for a bit. But what are you working on? And definitely where can people find you and the properties that we're talking about? Yeah,

Whitney Hansen 46:55

I am chilling out. I am just recovering financially, I'm giving myself a full year to boost my savings back up, give myself a little peace of mind and enjoy some of my free time again. So this next year is hopefully a season of chillin out we'll see. And the best place to go to learn more about the properties themselves is probably my personal Instagram. It's Whitney underscore Hanson underscore Co. I often post about the properties there too. So you'll definitely find their Instagrams and come hang out with me on the money nerds podcast. That's where I spend a lot of time.

Jamila Souffrant 47:30

Yes, we will definitely like everything in the show notes. Whitney, thank you so much again for coming on the show and learned a lot and I hope everyone listening to too.

Whitney Hansen 47:37

Thanks so much Jamila was so good to catch up.

Speaker 1 47:42

Don't forget, you can get the episode show notes for this episode by going to journey to launch.com. Or click the description of wherever you're listening to this. And you can still grab your jumpstart guide for free to help you on your journey to financial freedom by going to journey to launch.com/jumpstart. If you want to support me and the podcast and love the free content and information that you get here, here are four ways that you can support me in the show. One, make sure you're subscribed to the podcast wherever you listen, whether that's Apple podcasts, that purple app on your phone, your Android device, YouTube, Spotify, wherever it is that you happen to listen, just subscribe so you're not missing an episode. And if you're happening to listen to this and Apple podcasts, rate review and subscribe there I appreciate and read every single review. Number two follow me on my social media accounts. I'm at journey to launch on Facebook, Instagram and Twitter. And I love love love interacting with journeys. They're three support and check out the sponsors of this show. If you hear something that interests you, sponsors are the main ways we keep the podcast lights on here. So show them some love for supporting your girl for and last but not least, share this episode this podcast with a friend or family member or co worker so that we can spread the message of Journey to launch. Alright, that's it until next week, keep on journeying journeyers

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