Do yourself and your business a favor and stop renting out your
personal space as soon as you possibly are financially able to.
Always pay yourself and even your kids for jobs that you perform. This is an expense for your business, which lowers the income, which lowers your business' tax burden. As long as your kids make under a certain amount, $12,200 in most cases, they do not have to pay taxes on it.
Get your mindset away from your old thinking. Employees and Self-Employed people think incorrectly about money - which usually is one of the main reasons they're stuck on the E and S side of the Quadrant!
THINK AND ACT like a business owner. Pay yourself! Hire the right professionals to get the job done! Don't step over dollars to save cents!
Stop Thinking Like an Employee
Start Thinking Like a Business Owner!
Create your Success Path and write YOUR VERY OWN
Definition of Success!
WHAT BOOKS, PRODUCTS, SERVICES, OR LINKS WERE MENTIONED...
Recommended Article or Blog Post Related to This Week's Podcast:
Recommended Podcast Episode that is paired with this one like a Fine Wine:
Get This Episode's Show Notes in a pdf form...
[00:01] Over the last two centuries, nearly 90 percent of the world's millionaires have created their wealth through real estate. Here to tell you how you can ride this wave with less risk and less capital while creating greater income, is your host, best selling author and Speaker, Michelle Russell.
[00:21] Hi, this is Michelle, the Master of Money Mindset, and you are listening to the Short Term Rental Revenue Podcast...
and in today's episode, Speaker 1: (00:28)
we're going to be talking about what you are doing right and what you are doing wrong when it comes to your short term rental. But first I wanted to remind you that today's show is brought to you as always by audible. You can get your first audio book for free by going to audible trial.com forward slash s t r revenue, that's audible, trial.com forward slash s t r revenue and you'll get your first audio book three and 30 days to try out the audible membership in which there are channels and freebies given to you every single month. So you'll get two books a month, you'll get all kinds of specials each and every day. Books that are usually around two 95 or something.
Speaker 1: (01:14)
Plus, I mean, you can build your library and guys, it is important to feed your brain and one of the best ways you can do that, especially in this busy world, is just through audio books. You can listen to it in the morning as you're brushing your teeth, getting dressed, getting a shower, getting your breakfast ready, cutting up the vegetables before you juice. You can pretty much listen almost anywhere in, especially if you're driving and you've got a long commute. Best thing to do is try audible. So again, go to audible, trial.com forward slash s t r revenue. Okay, so guess what? If you're listening to this podcast, you're doing something right and I'm not ringing my own bell. I'm saying you're doing something right because you are actually out there doing your best to promote your business and get your business to learn more, to do more, to be a better host, to be a better business owner, to be a better investor.
Speaker 1: (02:09)
You are doing your best to be become the best version of yourself. And I applaud you because honestly, when you're listening to podcasts and you're going to online services and reading blogs and you're doing all these things to help educate yourself, you know you are in the right space. You know you're doing the right thing and you know you're in the right frame of mind and that is critical. So I want you guys to give yourself, you know, reach behind you and give yourself a nice pat on the back because you're doing it right, you're, you're doing everything you can. Now here's where you can start to waste your time when you start taking your eye off the ball. So it's like going down the rabbit hole, right? Somebody sends you a video link to Youtube and next thing you know you're watching like kitten videos and stuff and you're like, like three hours later, what happened?
Speaker 1: (03:02)
You went on for one specific thing and then you got derailed. And that's what happens when we go onto places and forums like youtube or Facebook, when we get lost in those things, we're taking our eye off the ball, we're taking our eye off of our business. We don't need to sit and critique others or read every single comment about something that we already know about in this business. There's really not a lot of right and wrongs, right and wrong in the sense that you're going to really f this up if you do something bad. Now obviously if you don't buy insurance, you can really eff it up. Okay? So things like that are pretty crucial and you really need to have those things. But there are people out there who are operating their businesses and they don't have the proper insurance. And for the love of God, they've got an guardian angel on their backside, you know, watching them and nothing has happened yet, but when it does, the shit could really hit the fan.
Speaker 1: (04:02)
So there are things you can do wrong and still not, not screw up completely. Right. I don't know how to explain it better, but that's pretty much it. There's a lot of people who get by just by dumb luck. I don't want you guys getting by with dumb luck. I want you to be intelligent about this. So there's going to be some things you're doing right and there's going to be some places where you start to go wrong. And I want you to be careful because you're walking the razor's edge, this very sharp edge to where if you go too far over to either side, you're going to fall and you're going to get the ball completely. So be careful and be balanced. So now I want to talk to people on both sides of this business. So there are some of you who have gotten started and how you got started was just renting out a room in your home or renting out maybe a rental property that you had or maybe renting out a vacation home that you had a guest house that you had some piece of your real estate, some part of your property, maybe even your real home as you were traveling someplace, but you are renting out a piece of you basically.
Speaker 1: (05:12)
That's well and good. If that's all you want, that's okay. You get to decide and you get to define your degrees of success in this life. My degree of success and your degree of success maybe very different. My success keeps me in my balance so I don't have to compete with anybody but me. And I want to make sure that I have an income coming in, that I get to live and enjoy my life the way I like to live. You know, I usually go the end of September and the beginning of October for an entire month to Florida and, and my place there and have fun with my kids and I've done that for 1520 years. But that's my idea of success. Being able to do those things, being able to go inside a car dealership and pay cash for a car. I don't always use other people's definition. Dave Ramsey would be really pissed at me if he saw me flipping a property.
Speaker 1: (06:13)
You know, there was a couple of times where I was a little low on cash and we found out there was a big major expense and I put it on my credit cards. So what? It's my money, I can do it with it what I want and it was my risk factor. But it's also my definition of success, right? And I want you guys to know that you deserve to have your own definition of success. You deserve to write it yourself. So don't allow anybody else to tell you or dictate to you what is successful for you. Because your life is not their life. The things that you want to do, it's not exactly what they want to do. The people you are doing it for are probably not the people they're doing it for. So you have to learn to really stand up to other people.
Speaker 1: (07:02)
You don't have to drive the really nice cars. You don't have to live in the houses that you can afford. You don't have to go places to impress people. You have to live for you, and you have to make yourself happy. So once you get to a certain age, now a lot of people will say, well, I don't care what other people think. And I love that because my kids have said that a bunch of times. But they do. It's funny because they're lying to themselves because they have to have the latest iPhone 11 or whatever, you know, so they can look and make their emojis talk and things like that. I was like, well yeah, you do. Yeah you do because you're on this and you're doing this and do you see how you're conforming to your peers, what they expect of you? You are happy with an iPhone six it was working fine for you, right?
Speaker 1: (07:51)
And then no, you had to upgrade to this seven and upgrade to the eight and then go to the 10 why? Because somebody else made you do that because you weren't cool if you weren't doing it right. You're not cool if you don't go to this place or you're not cool if you don't vote this way. You're not who other people think you should be and they don't have the right to do that to you and you don't even see yourself being manipulated a lot of times by the people around you because we are so used to it. We're brought up that way. So I want you to really sometime this week and honestly if you can do it now, right after you get done listening to this podcast, if you could just sit down with yourself and start writing out the things that you want, the things that you want to do.
Speaker 1: (08:38)
I just want to have my house paid for. I just want to have my car paid for. I just want to make enough income with my short term rental that I'm paying my monthly expenses. If that is success for you, then I want you to do that. Write that down as your goal and kind of f everybody else, right? Just screw them. Let them have their goals. Let them sit there. It's so funny too because there's so many haters out there and there. Get down on people and the thing is you can build a tower two different ways. You can work your butt off and build the tower or you can knock everybody else down and be the tallest tower and that's what most people do. They don't want to work hard, so screw them. You're not doing this for them. You're doing this for you and you're doing this for your family.
Speaker 1: (09:23)
So first I want you to write your definition of success because it might not be huge right now and it can change and it will change all across your life. Like I said, when my husband and I began investing, I mean, you're talking back in the day, right? We thought that making $100,000 a year was going to be the be all end all thing. Way Back in the 80s we're like, aw man, someday when we hit 100,000 and we hit 100,000 pretty quickly, and when we did, we looked at each other and went, yeah, that's not enough. I don't even know why. That's not enough. We used to work down in the city of Chicago and we were going to school and we probably made 18,000 a year or something, maybe 16,000 a year. We were busting our butts, going to classes, doing all this stuff, not making very much money at all.
Speaker 1: (10:14)
So we thought, you know, wow, can you imagine five times as much as we're making now? And it when we got there, we just realized that there is more taxes. You get a bigger house, your dreams, desires and goals increase with that income all the time. So when people get a raise they think, wow, this is great, but then they go immediately out and they get a nicer car or a nicer house or they do something and they blow that money. They don't put any money towards the future. They don't save any money towards retirement. They most Americans don't even have money in a savings account for themselves. And I'm telling you, that's where I absolutely love Dave Ramsey's teaching because his baby steps are amazing. I realized that I had to be saving for my future and that if I wasn't saving for my future, I was stealing from my future.
Speaker 1: (11:12)
I was literally robbing from my future self and no one was going to be there to take care of me because even back in those days, Dave was talking about, and you, I mean this has been going on for many, many years. The social security wasn't put out there to replace an income. Social Security was put out there as a supplement to what people had put away for retirement, but then people began to depend on it and live longer and therefore, if you guys have read the book that I told you to read at the power of zero, you'll know exactly what I'm talking about. The very first few chapters of that book go into how the social security program just, you know, fell apart because of what happened. People living longer, not enough people putting money into it and the fact that they were using it not as a supplement but literally for their retirement.
Speaker 1: (12:06)
It was never meant to be that. So we need to take care of ourselves as Americans. We are forgetting the number one thing that we are. When people come here and they talk about the American dream, what they're talking about is our ability as Americans to go out and create something for ourselves. We are pioneers in almost every industry. When there is something creative, it's almost always an American. I mean we are fantastic people and the reason why is part of that American spirit is the dream of creating something for ourselves. We don't depend on the government to do for us or to take care of us. We never had, and this is a new belief system that they are trying to indoctrinate into our children through the school systems, which they control. They create these little employees, and I want to remind you, read those books I told you to read because you will see exactly what I'm talking about.
Speaker 1: (13:12)
When you read Rich Dad, poor dad and you read the cashflow quadrant, you'll realize that what they're doing is they're creating little employees. They want kids to think like employees, like little robots. You know if you ever saw the pink Floyd thing where the people are all dressed the same marching and stuff, that's what they're trying to create. But here's the deal. They got us as parents. They've got generations before them of entrepreneurs and when your kid has an entrepreneurial mind, they don't fit into their little boxes and they're not going to be happy being an employee. They're not going to be happy being bossed around. Now, there's always a difference too. There's your razor's edge where you've got kids who are not happy simply because, not because they're not being bossed around or they are not their own boss because they're lazy little shits. Now with five kids, believe me, we've gone through that scenario.
Speaker 1: (14:12)
It's funny how you can have five kids, two same parents, but completely different personalities with your kids, but some of our kids when they were younger or just like, Holy Shit, this kid is never going to go any place. They're the laziest little, you know what that there is, right? Eventually they learned what they wanted to do and learned about themselves and went out and started creating for themselves these wonderful lives. But at first we were really scared because we're like, this kid's just lazy. I want you to know that this is not you. There's nothing wrong with you and there's really nothing wrong with your kids except for the fact that we're allowing this to get into our blood and deeper and almost drilling into our DNA and we need to be very careful that we don't do that because you have the ability in this country to create whatever type of business you want and whatever size of business you define what you want is absolutely obtainable.
Speaker 1: (15:17)
There is nothing stopping you from achieving it, but you have to know what you want and you have to take actionable steps each and every day to go towards those goals and you can't let people distract you because literally youtube, Facebook, all those places are distractions. A lot of times the only thing they're doing is distracting you, especially the news media. When you watch, they're like, watch this hand, watch this hand, and they get you all fired up and angry and you're wasting your time and energy on things you have nothing to do with and you can do nothing about. So be careful. Be careful because your greatest asset right now is time and you're going to be working toward your retirement, towards your goals, right towards your monthly income, towards all these things that you want. And if you're wasting that precious time on things that don't make a difference on the [inaudible] essential items than then you're lost, then you're lost.
Speaker 1: (16:24)
You're running on that hamster wheel, right? And if you've ever played the game cashflow, it's an amazing fun game, but you're just on this hamster wheel. You're just on the rat race. You're going around and around the circle getting up, going to work, coming home, getting up, going to work, coming home, getting up, going to work, coming home. Who wants to live that life? No one. And when you realize you're on that wheel, it's because we're not spending our time efficiently. So we need to take those cracks of time. That's why I said, you know, multilevel marketing had some really great training in it because it taught you to take the cracks of time that you do have. If you have a full time job or if you're doing something else and use it in a way that will move you forward and take you out of the rat race and put you on the big track, the big track to success.
Speaker 1: (17:19)
Remember though, you are the one who defines success for you. You don't have to listen to anyone else's definition of it. So if you are ready to just host and you just want to sit back and when people come in, you want to say hi and greet them personally and listened to their stories of traveling all around the world. You're just happy doing that. Don't let anybody tell you that it's wrong. It's not right for me. It's not the same thing I want, but it's perfect and wonderful for you if it makes you happy and if it's in your definition of success. So I don't want you to think to yourself, oh my gosh, I must be wrong because I'm doing it wrong. No, you might not be doing it wrong for you. It might be perfectly right for you. But in order for you to know what is right for you, you have to define it first and you have to plan it out.
Speaker 1: (18:12)
You have to build that success path. You have to know where you're going and you have to move towards those goals. Okay? So when I say right and wrong, remember right and wrong, their relative, it's just like is it hot outside? Well, it depends on where you are. Cause right now it's only 102 degrees outside here. And that's not very hot because sometimes it's a hundred and fricking 18 and it's really hot. But if you live somewhere in the Midwest and you said it was 102 they go, holy crap. That is really hot, right? It's relative. It's relative to everything. So you have to define things for yourself and you have to know what you want. So when this is over, please sit down with yourself or even if you want to with your spouse, right? And start defining what you want in every area of your life.
Speaker 1: (19:06)
Be Courageous and stop allowing other people to define success for you. Watch who you're hanging out with, but watch those people. If they're negative people, watch the energy that they bring because negative energy brings negative results. You get what you attract, and if you're putting out a lot of negative, you're going to get a lot of negative back. You know, my sister and I had this huge conversation because she said, well, life is different for you. And I said, that's because I focus on different things. I focus on the good where if you're focusing on the bad every day you're going to wake up and see everything that's wrong with the world. But if every day you wake up looking for your blessings, looking for things to be grateful for, you're going to see more and more and more blessings and things to be grateful for.
Speaker 1: (19:58)
So you have to change your life. You have to change your rituals, you have to change your mind and begin to focus on the difference, the positive, the things that can move you forward and you're not going to get that balancing on that razor's edge or sitting inside of Facebook and you know, going at it with other people, it's, it's really not a positive place to be. Take that time to move your business forward. Take that time to move your life forward. Like maybe it's not even business you want. You just want more help. So take that time to go work out at the gym or walk your dog around the block for an hour or whatever it is that's going to help make you feel good. Right? Just being outside always makes me feel good even when it's hard. I sat out there this morning with my dog, just let the sun shine on my face and just felt the light and the love coming down.
Speaker 1: (20:55)
You just, you feel it when you're outside, you feel the earth. I think everybody needs to connect a little bit more with nature and so do those things for yourself. The things that you know are moving you towards your dreams, goals, desires, what you want to be do, and have, okay, so do that. Now when I'm saying you're doing it right and doing it wrong, one of the things that you can be doing wrong if you're not careful is you can be falling back into the e and s mentality. So again, we're going back to Robert Kiyosaki's teachings with the cashflow quadrant, right? And what the cashflow quadrant says is we have an employee mindset. That is what we are literally educated in to be little walking, talking employees, and even when we're not, even when we think, well, I'm going to get a better job, I'm going to trade time for dollars, but I'm going to do it as an attorney where I'm getting hundreds of dollars an hour or I'm going to do it as a doctor where I'm getting hundreds of dollars an hour, you're still on the e s side, meaning you're still trading your time for dollars.
Speaker 1: (22:01)
So if a doctor can't go and perform surgery, he's not going to get paid if an attorney does not go and work. And do all the research and go to the court and stuff. They're not going to get paid. They're still trading their time for dollars. And the difference is when you are on the B and I side, your money is working for you even when your not there. And that's what we aspire to do. So if you are happy being on the es side, meaning running your own bnb, doing everything yourself, cleaning the rooms yourself and doing all that stuff. If you don't mind doing that and that makes you happy and you don't mind being on the e and s side forever, then by all means stay there. If you don't aspire to be doing, have, you know more than that. If that just makes you happy in your super content, don't let anybody bust your bubble.
Speaker 1: (23:02)
You don't have to need to do more. You know, if you're happy where you are. My husband's a very content person. He would be happy just going to work every day, coming home, switching on the tube, watching this football, you know, just doing his thing in the yard, barbecuing and grilling. Oh my God, the man loves to grill. He's an amazing griller. I told him, I said, when we move and we retire, I said, I'm just going to get you a food truck and you can just piddle around the island with your food truck and feed people because that makes him happy. He's super, super content. The person who's never content or happy with everything, you know like I hit a goal, I celebrate for a moment, right? Celebrate all wins, but then boom, onto the next goal. What else can I do? What else can I accomplish?
Speaker 1: (23:52)
What's next? I'm always out there looking for ways to improve my business every single day because that's just who I am. I am never contend, but that doesn't mean you have to not be content and be looking for things every day. If you are content, be content, be in the moment, be appreciative. I'm in the moment a lot. Appreciating what I have right now and then doing my best to connect with my future self, seeing the next goal that I want already accomplished and asking myself what I did to get there. Because as long as you can talk to your past self, you can totally talk to your future self because time is not linear. Einstein said it so if time is not linear, if we can look back, we can also look forward. There must be a connection. So let's connect with ourselves and find out what we want.
Speaker 1: (24:44)
But I want you to really know what an employee mindset is or when you're slipping into that and you don't want to. So when I see you're doing it wrong, when I'm talking about slipping into the ens side, if it's somewhere you want to be know that I'm not talking to you. Okay? I'm talking to all the people who are trying to get out of the ens side so you can start there. I mean everybody pretty much starts as an employee or a self employed person. And to move over to the other side, you have to begin to think like a business owner, like an investor. Now when we're talking about real estate, that would be an investor because they're not doing it the same as a business. You can if you own a big like an investment firm or even a real estate investment firm.
Speaker 1: (25:39)
So let's say you had an acquisitions team, you had a marketing team that was constantly sending out letters. You had this whole thing going with all these employees that are running basically a business for you. And you could even put, you know, like a real estate brokerage firm could do that if they were collecting properties for themselves. If you had a business, it would be something like a property management company or a BNB. So we have an LLC that is specifically for the BNB side of our business and that is a business. It's not an investment. So let's say we were to buy a piece of real estate, we would actually buy the real estate. And one of our holding LLCs where we knew we were going to hold the property more than two years, right? Because there's holding LLCs and flipping LLCs. If you're flipping any property, if you're holding it for less than two years, you're flipping it less than two years.
Speaker 1: (26:36)
You want it in a separate LLC. Remember that because if you have a property in your holding LLC is now holding properties or any properties that you hold over two years that you own for over two years and you can write off a ton of stuff. When you're holding a property for more than two years, you can depreciate tons of things from carpet to paint to light fixtures. I mean, you name it, you can depreciate it, right? But when you're flipping a property, you're gonna hold it less than two years. And when you do that, you're not going to be able to write off all those items. They will not be deductible. They cannot be depreciated. And you're going to pay taxes in a totally different way because your tax differently on a flip than you are on a hold property. And what happens is if you were to take a property and you had your holding LLC, so let's say, you know, mine would be like Russell Holdings, right?
Speaker 1: (27:40)
And I bought a property in there and I put it in there and I'm holding the property and then I had another property that I was holding. I was going to keep it for more than two years and I'm renting these properties out, doing all this stuff with this property. And then I took another property and if I were to put it in my holding LLC and sell it in less than two years, I've literally made it impossible to write off anything inside those holding LLCs. Every single one of those properties are now going to be taxed like a flip because I flipped inside my holdings. So you can never ever do that. You have to be really careful how you do that. Okay, now let's go back. I've got a piece of real estate. I know it's in my holdings. I'm going to be renting it out.
Speaker 1: (28:25)
I keep it there from more than two years, two years or more, right? That's in my holding LLC. And now my short term rental business, my B and B business, it rents from my holding LLC. So I get a fair market rent. So if a fair market rent is $1,800 a month for a three two in that area, that is literally what my short term rental business, we'll rent it from my holding LLC four so my short term rental business rent from my longterm holds and my real estate business. Do you understand that? And that's what I want you to learn how to do. Now here's another thing, in order for you to basically cut the cord from those first short term rentals that you have that are inside your properties, you need to start moving away from renting out properties you really, really care about.
Speaker 1: (29:21)
I know that sounds stupid, right? But here's the deal. We are so emotionally attached to those first properties now you can still keep them, but know that when you can detach from real estate and run it as a business, you're going to run it as a business and you're going to run it better. It's just emotional thing. Nothing is more emotional than your family's cabin up in the woods. Now, I'm not saying that you can't rent those out. Obviously you can, but just know and realize that when it was your great-grandma's couch and somebody spills something on it, you're going to think of it differently than a couch you just bought from Wayfair and you put it into a short term rental. Everything that is yours personally has an emotional attachment to it. Not that that attachment is real because believe me, I lost my home to a fire and so I've learned that we are the ones who put the memory attachments on items so when those items are gone we were like, oh no, I'll never have this again.
Speaker 1: (30:25)
But actually you do because it wasn't the item itself. It was just the item that triggered a memory or an emotional attachment. Just know that, but that's hard to get through and it takes a long time to learn and I sure as hell don't want you to go through a person, a house by her where you lose pretty much everything in your life that's important to you. You know, item wise, I would say to have to go through that lesson and realize that those memories are still there even without the items. So I no longer have my kids' baptismal outfits and I no longer have my wedding dress and I no longer have the VHS videos of my kids first steps. I don't have those things, but what I do have are the memories of them and those are still there without the attachment. But just take that, take that story and move it over to your business and you can see and feel the difference of renting a personal property and renting just a short term rental, just a property with just some items in there.
Speaker 1: (31:29)
Something gets stolen, it's, it's replaceable, you've got insurance and you move on. Do you see the difference? It's so difficult to expand yourself with that attachment there would that emotional attachment you need to detach from that attachment and move out of it. I can understand when you're first doing stuff, you're making money on those places, right? But eventually wouldn't it be nice to just have those places that you don't have to make money on and if you want to rent them out, maybe you can or maybe you have certain people that you've rented to every year and just you rent to those guys cause you're making enough money somewhere else because if money wasn't an issue, you wouldn't be renting that space out anyway because it's your personal space, it's your personal stuff and it means a lot to you and it might mean a lot to everyone in your family if it's got all those memories and stuff in them, right?
Speaker 1: (32:26)
So you're going to move away from those things. If you're going to be building a business as soon as you possibly can replace that income, I want you to move away from renting out your personal spaces because it's just going to be easier to do business and you'll be able to duplicate it a lot faster and you won't have that worry because that emotional attachment actually takes away from building your business. It actually detracts you. It's actually keeping you closer to the ens side because you want more hands on and it's not allowing you to move fully into the business owner side of your business. Okay? So I want you to think of that. So the s side of your business, I always say, who's putting on their Superman Cape, right? That's going to be people like my husband. Oh my gosh. Doctors are really good at doing this.
Speaker 1: (33:24)
They're really good at wearing the s because they're self employed. We call them self-employed Superman's because they want to do everything themselves. So if something in the beginning of our business broke with one of our rental properties and toilet was clogged or you know, it wasn't working or something, and the people used to always say, you don't want it to be a landlord, you're going to get calls in the middle of the night to fix the toilet. Well actually that's never true. We've never gotten a call in the middle of the night to fix the toilet. Probably gotten a call in the morning and whatever. But you don't have to do that stuff yourself anyway. If you are a business owner now, if you're self employed in your business, you might do it yourself. And that's what my husband would want to do. He would want to go fix everything himself and he would spend all day on his day off doing one little thing that I could've hired somebody to do, a professional plumber to do and fix.
Speaker 1: (34:18)
They would've gotten it done probably in an hour or two maximum, probably cost me at the most a couple hundred dollars and it would have been done professionally and probably warranty. The work would have been guaranteed, right? Because it was done by a professional and I could write it off. But no, my husband, who makes hundreds of dollars an hour as a doctor is spending an entire day, eight to 10 hours fixing something that he wasn't really good at, that he would take, you know, one look and go have to go back to home depot and get the right size. And then he'd try it again and that didn't work. And He'd do it again. And he was spending all day doing something that he wasn't trained to do. And instead he could have been spending his time in his own business making the money to do that. But see, people don't do that.
Speaker 1: (35:08)
They'll say, well, I wasn't going to go to work anyway, but they don't see the benefit of working as a business owner. There's a lot of benefits to doing that and walking away from the ESP mentality, you need to pay people to do their job. Or while you're first getting started and you don't have a lot of money, I want you to pay yourself for doing that job. So for instance, if you are cleaning your own place, pay yourself, pay yourself as a cleaner because that is your time. And eventually you will have to pay someone. And so if you're paying yourself, you're training your business to work expenses the way they should be worked, right? So let's say you had a restaurant and you also had a farm and you decided, well, I'm just gonna use my own chickens from my farm. I sell chickens to all these other guys, but I'm going to take my own chickens and run this chicken restaurant.
Speaker 1: (36:10)
There'll be like a little Knott's berry farm, right? So people would go and get this chicken, but if they didn't pay their farm for those chickens, what would happen to the chicken farm? The chicken farm would eventually go out of business. Right, because they need to pay themselves back. But what would happen to the business side of that? Well obviously the, the restaurants going to do pretty well cause they're not paying for their damn chickens if they're not paying for their chickens. Pretty much almost everything they're making seems like it's a positive cashflow. Right? They're like woo, we're raking in the money. Well that's because their expenses aren't real. They're not basing it on real expenses. So literally they could be charging way too little for those chicken dinners because they're not paying what a competing chicken restaurant we'd be paying for the chickens. So if there was a neighboring chicken place, chicken restaurant that was paying your farm $2 chicken and they had to charge more for their chicken dinners because they were paying for the chickens.
Speaker 1: (37:16)
Yeah, your restaurant would be doing okay, but guess what? Your chicken business would eventually go out of business. Do you see? Because it needs to feed the chickens. It needs to do all the things to run a chicken farm, get little eggs and hatch the little eggs and have the mama hens running around and stuff. It needs do everything to keep up the chicken farm business. But the restaurant business is completely different. So when you're running your B, and B, you need to be charging yourself for all the real charges, which include cleaning. Because if you weren't there, if something were to happen to you tomorrow and you had to hire somebody to clean your place for you, what would you do? If you didn't have those expenses already there? You'd be Sol. You would be completely sol. So you need to do that. You need to work your business like a business and you need to set those expenses aside like a business.
Speaker 1: (38:16)
Now I want you to do that. Whether or not you're going to be renting out your home and your home space and you're going to be moving your business forward, still be paying yourself because that is a legitimate expense for your business. You can write it off and if you're not paying someone, you can't write it, you're going to be taxed on that income. So write it off. Have your kids go help you clean it. Pay Your kids. Your kids can make up to a certain amount of income without having to pay taxes. Did you know that? Have your kids working in your business? It's a very smart thing to do. Have them do any little possible thing that they can do. Have them help you with the laundry. If you're doing your own laundry, have your kids help you fold the towels and go down there.
Speaker 1: (39:03)
Have everyone in the business have a job and you can literally pay them as a kid. They can make up to a certain amount every single year. Ask Your accountant and they won't owe any taxes on it and you can pay them right off that expense legitimately because they're performing the job. For you and your kids won't be paying taxes on it. You'll be able to write it off. Your kids are making it and not having to pay taxes. Yay. That's a win-win, right? So make sure you're doing stuff like that. Another thing you do when you are way too attached to a business, as you get way too personal into people's shit. I don't know how to say that in a nicer way, but you get way too personal into people's business. Now, I'm going to preface this with, obviously we don't want drugs in our properties or people doing drugs or using our properties as a meth lab.
Speaker 1: (39:58)
We don't want people in there doing human trafficking and pop up brothels. We're going to watch out for those things. We're going to be very careful that no illegal activities are going on in our property. That's what my preface is, but on the second part of that is those of you who are out there constantly writing and complaining and telling about people who are going in and they're staying up too late and they're drinking a lot and leaving all this liquor and stuff, and you're like, dude, you're running a business. You don't care. Honestly, it's not up to you to be their parent whether they threw the towels on the floor or not, who gives a shit? You're getting way too personal. Think of your self as a business owner. When you go and you rent a hotel room, do they call you afterwards and say, Holy Shit, you tore this room apart.
Speaker 1: (40:49)
You just threw your towels all over the place. Are Our maids had to pee? It took them way longer to clean up your room than it did any other room. No, they're not your mother. They're not going to call you. Stop worrying about what those people are doing. Okay? Stop worrying about how late they stay up or how they drink and see that's where that they're too close to you is getting involved because if they're in your downstairs basement room and they're up all night and you're like, well my house rules stated like nobody reads those house rules all the way through. Very few people read the house rules all the way through. I don't read the house rules all the way through. I skim over them but I don't read them all the way through. It's crazy and I'm really good about asking people about shared spaces and stuff too.
Speaker 1: (41:38)
I stayed at this guy's house up in Canada and I was at a mastermind with a bunch of other wonderful ladies and in our mastermind group we had a bunch of women who are going to be there altogether and I had this huge house, like I had their whole downstairs, which had a full kitchen and a living room with a fireplace and pool table and stuff and I said, hey, even though it's just me, is it okay if one night that I have some ladies over and we have a glass of wine and stuff, but I made sure I asked that well in advance when I was booking the room. Would it be possible if I brought somebody over? That whole thing is you guys get way too personally involved, which is another good reason to move away from the personal spaces as fast as you possibly can because I can understand if you are upstairs and you have little kids and they have to go to school, you have to be really clear about that stuff.
Speaker 1: (42:31)
But don't just expect people to read your books. Some of you, right? Entire Encyclopedia Britannica was, it's so big, it's like gone with the wind, a novel. Don't just expect people to read your house rules. Okay? So when you check them in and if you're there and it's your house and they're in your house and you got to check them in and you should check them in. If it is your house, go through those rules. We have kids, they go to bed at this time. That's the time we ask you to calm down. I mean, and literally go through the rules with them that are the most important for you, but don't be their mother. Don't worry about anything else. You know what I'm saying? Like don't worry about how much wine they're drinking, but obviously if you don't allow a party, say I don't allow parties.
Speaker 1: (43:18)
If I hear a party that's breaking the rule, it's right here and I will ask you to leave. And that's, that's all you have to do is just say stuff like, you know, my kids go to bed, we don't allow parties, blah, blah, blah, blah, blah. In stadium, you don't have to get like down and dirty and crazy about it. And if they start breaking it, boom, he call the police and get their ass out of there. It's not that hard. People make it so much harder than it is. But I'll tell you, it gets so much easier when it's not your property because what do you do? You'll put a noise aware in there and you won't have to worry about it. You've got cameras on the outside of your place. You can see how many people went in or like ringer and you see people going into your property and there's too many.
Speaker 1: (44:04)
You nip that shit in the bud right away and you have a guy go over there. Don't ever go over there as a woman by herself. Although people should be way more afraid of me than they would be of my husband. But I want you to be careful as a woman because you know you don't want a young wife going down there and went and if you are, I've read a couple of people that say that they're single parents, single moms with kids, have a friend come over, have a brother or a neighbor or you know somebody that you work with during the day or something come over and do that with you. Or even call the police. The police are there to serve and protect. They don't mind doing that for you. They really don't. At least the police in our city don't say, look, I've got some rowdy people downstairs in my bnb and I'm a single mom all by myself.
Speaker 1: (44:52)
My kids are asleep and I need to go down there and give them a warning, but three big football players or whatever and they're scary and I would appreciate a little backup. Did you have an officer who could swing by and and help me and they would totally do that for you. They would totally do that for you. So there's always something you can do. Do it your way. Look it up, make sure it's legal. I know there's a couple of things that are going to bug us all on Airbnb or using AIRBNB's platform, but choose your platform wisely. So I want you to remember that the closer you are to it, the property, the more emotionally involved you are and the less money you usually make and the more time you usually invest into it. So as soon as you possibly can move into rental arbitrage or co-hosting and start doing other properties so that you can make up that income so you can get people out of your home.
Speaker 1: (45:53)
Okay. And be super duper picky with the people you do. You know? So if you still want to do it, then just be really picky about it. So you're moving over to the BNI side and as a business owner, you're paying all those expenses and you're being super careful and you're not being emotionally attached. So you don't, you're not going to be their mom. You don't care how late they stayed up or how much they drank. Cause that's an I your business. As long as they're not in your property and they're not making noise and bothering the neighbors, then you don't care. Okay, just make sure stop being so emotionally involved and things. It's not your job, man. It's not your job. Let's we. That's way below your pay grade. All right? That's somebody else's job to worry about those small things. Your job is to run the business like a business.
Speaker 1: (46:43)
Don't ever move away from that. So you're doing your short term rental arbitrager co-hosting. That's going to be in your short term rental business. You're paying yourself, you're paying all the people, right? You're paying your kids if you can, if they, if they're old enough to work and do stuff. Man, I had little kids, I had my kids when they were little stuffing envelopes for my real estate business, so like I had kids, man, I'm, I made my kids work for stuff. They probably remember being super young painting the house into like your do this baseboard. They can't mess it up. You're like, just give him the white paint. They're putting primer on everything. It's, it gives them something to do and doing something, you know, so it's like kids love that and they're learning too. They're learning that there's a business behind this. There's a reason why my kids have been since they were super little.
Speaker 1: (47:31)
I can remember them inside my rental properties when we were doing things and fixing stuff up on our own and taking all the kids in there when they were little and they'd be running around and sliding down staircases and stuff because you know it was super fun to run through mom and dad's property. So just know that this is your business and it can be a family business and can be a great family business, but run it like a business. Okay? Run it like a business. Pay Yourself for all the things that you're doing. If you're painting, pay yourself to paint. If you're putting cabinets in, pay yourself to put the cabinets in. Whatever you're doing, pay yourself to do those things. Make it make yourself have a little W2. Now, don't overpay yourself because you're going to be taxed on that. You're going to be taxed with your w two is going to be taxed on your taxes, right?
Speaker 1: (48:18)
Might be expenses you can write off with your business, but it's definitely gonna be stuff that you are paying taxes on. She don't overpay for anything. Always look at the fair market value and the fair market rates of everything. If you're renting to yourself, you're charging yourself a fair market rate. You're not overpaying for it. You're paying exactly what somebody else would pay to rent it. Okay? Don't try to take advantage of those things because that will bite you in the ass when it comes to the IRS because they'll say, look, is that a fair market rent and no it's not, and you can't say it is if it's not and they'll know because there are the IRS, so don't try to take advantage of the IRS. Just do what you legally can do right off what you legally can write off. Those loopholes as they call them, are there for everyone.
Speaker 1: (49:11)
I remember look at things like real estate loopholes. There are a ton of books out there, real estate loopholes and things like that, that will tell you how to run your business in such a way that you can write things off. You want to know what those are. So especially when you start holding and flipping real estate, especially using your holdings for your real estate business, you want to know what those are so that you're not over paying for them. So make sure you're doing that. So sit down tonight and go through what you're doing right and what you're doing wrong in your business. Remember, you're always doing it right when you're looking to improve yourself, improve your business, taking little courses, classes, reading books and stuff about your, you know, how to bookkeep or whatever you're doing to advance yourself in your business and you're wasting time with almost anything else.
Speaker 1: (50:01)
So make sure that you're spending your time correctly, because right now, time is your asset, right? And actually time will always be your asset. Later on you'll be able to buy back your time by allowing other people to do stuff for you. But right now you're still trading time for dollars and until you can pay other people. Time for dollars means time for dollars, right? No. What you want with rental properties to know what makes you happy. If you want those luxury properties, by all means go out and go for that. But if you are happy with just your regular properties, just making them look Nice, putting your personal touches on there and that makes you happy, then by all means be happy. Do what makes you happy. Define your own success in this world because that is the only way you will be happy.
Speaker 1: (50:54)
Okay? That's it for today. Hey, I want to thank you guys for leaving all these great reviews. I'm going to start reading them again. Got To get a new gout because Aria is back in school and she hasn't been able to go through everything for me and shoot me back stuff and [inaudible] my other girls, they do other jobs. Everybody's got their own little job and so I haven't gone to anyone to do all the podcasts stuff yet. We just keep farming it out to different VA's. So we've got to find somebody permanent that we go through, but I'm going to start reading those again really soon. So know that I'll even go back and find you and put you on there. So if you leave me a five star review, I would greatly appreciate it and do me a favor too and share this podcast with other people that you know who are into short term rentals because that's the only way we get out is by people talking about us and know that there's a lot of free stuff on the website and there's a bunch of new stuff coming up.
Speaker 1: (51:48)
So coming up we're going to be talking about some legal documentation, which is really cool, what to have inside your agendas and that's going to be really great. We just did addendums inside our membership group and Caroletta did some a few things for us that are really amazing. We're going to tell you what you can put in there so you can create and write your own agendum. We always recommend that you talk to an attorney and have an attorney look everything over, especially an attorney in your state or the state you're doing business in, right when you are in our membership group. That is a part of it. But the addendums are really important guys, and these identities are pretty cool too because you can use them for co-hosting. You can just tweak them a little bit and create a business contract for co-hosting. That includes all the things that you're doing. So we're going to talk about that and next week's episode. So I hope you listen and I hope you leave us a great review and thank you so much. God bless you. Have a great day. Go and grow.
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