How to get More Cash Flow with Airbnb
The biggest problem facing Airbnb hosts is one of cash flow. Many hosts find themselves in a terrible predicament; they have lots of bookings, but no cash.
This can occur because Airbnb often takes several weeks to pay bookings. That means the host has no income coming in, but the bills keep arriving. The host also has to deal with day to day expenses such as groceries, cleaning supplies and pay for the housekeeper or handyman.
Not surprisingly even some very successful hosts end up flat broke. They work hard, write great listings and get lots of guests, but still find their bank account empty. To make matters worse a lot of these hosts end up turning to credit cards to cover every day expenses which puts them deep in dept.
Hosts end up turning to credit cards because many banks will not issue mortgages; or home-equity loans, to Airbnb entrepreneurs. News reports indicate that even some Airbnb hosts with great credit ratings have had a hard time getting a mortgage. Many lenders do not like working with hosts because they are regarded as businesses rather than residential loans, so they are not federally insured.
Sources of Capital for Airbnb Hosts
Fortunately there are some sources of capital that Airbnb hosts can take advantage of. It is even possible to tap some of them without running a credit report which can keep your credit score from going down.
One of the easiest solutions for Airbnb hosts to take advantage of is Payfully which provides cash advances against unpaid bookings. The great thing about Payfully is that the advances are not a loan. That means they do not have to be paid back and will not affect your credit score.
More importantly Payfully often pays very quickly sometimes within 48 hours which can be a lifesaver. The company is able to accomplish this because it is a factor; a buyer of unpaid invoices. It makes money by paying hosts a portion of the booking (say 90%) and keeping a portion for itself.
Hosts with a good income; and a lot of credit-card debt, should check out Marcus. Marcus is a new consumer lending service offered by the giant investment bank Goldman Sachs (NYSE: GS). Applying to Marcus will not affect your credit score because it uses other metrics to make loan determination.
There is no guarantee that Marcus will approve you but if it does you can get an income based loans. It also offers a wide variety of interest rates and the ability to consolidate credit card debt.
It is also possible to find mortgage lenders that will work with Airbnb hosts. You will have to go online and search. Generally nonbank lenders will be more likely to work with hosts than banks are. Smaller banks and mortgage brokers might also be willing to underwrite Airbnb hosts. This means you might have to contact mortgage underwriters directly and explain your situation.
Another Cash Flow Suggestion for Airbnb Hosts
Another solution is work with professional Airbnb cleaning and management services. These firms might be willing to bill you on a monthly basis and defer payment until after Airbnb pays you. Some of them are also willing to work with Payfully.
Unfortunately there are not many of these services around yet and they only work in a few places. GuestPrep is only available in Denver, New York, Austin; and Washington D.C., MaidThis! operates in Los Angeles, San Francisco and Orange County, California. You will have to search for services that are available in other areas.
It is possible to increase your cash flow with Airbnb and even make a good living from the app. To do so you will have to work hard, be creative and be willing to think outside the box.
