Airbnb Cash Flow

Airbnb Cash Flow 101

Airbnb cash flow management for the serious Airbnb managers

Did you know that almost 9 out of 10 small businesses will fail in the first five years? When surveyed, many entrepreneurs cite the lack of liquid cash as a reason for their failure. Simply put, they don’t have enough money to pay their employees or buy materials so they can keep their day to day business afloat. This problem isn’t just an issue for traditional entrepreneurs; it can happen to Airbnb managers too. Even if there’s no demand for your rental for a month, you still need pay mortgage/rent, insurance, utilities and make repairs. Having proper Airbnb cash flow can be an integral part of an Airbnb entrepreneurs success. Do you know how to handle your Airbnb cash flow?

Set aside an emergency account

The best way to always remain in the green is to have some money saved for the rainy day. Having a little extra put aside is essential in case of a pipe bursts in the basement, or you just need to replace an old rug. Being blindsided by an unforeseen cost will make it hard to make ends meet which can start the negative cash flow cycle that can disrupt your successful business.

Pro tip: Need some help bringing more people into your rental? Read about how to promote your Airbnb rental

Make a cash flow spreadsheet

Spending the time to make a quick cashflow spreadsheet is a fantastic way to make sure you always have enough to pay for the essentials at the end of the month. Add your expenses for each month and estimate your revenue. After these numbers are in place, the formulas calculate how much you have at the end of the month. This way you can see any months that your Airbnb cash flow may be in the negative so you can plan accordingly.

Invest in quality

If you have the ability to do so, spend the money on quality items for your Airbnb. Buying quality appliances, linens, towels, and electronics do have a high upfront cost but will last longer than cheaper items. Purchasing quality items that need to be repaired or replaced less often will help you even out your cash flow.

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Being diligent of your spending and truly aware of how much it costs to run your Airbnb business can help you avoid any Airbnb cash flow issues. A final tip is to work on maintaining a high credit score. In the event that you do need to borrow some money, it can be done with ease. Happy hosting!