Summary: Do you Have the Right Mindset to Invest in a Short-term Rental? So you think you want to invest in a short-term rental? Do you think you have what it takes? Before you spend your hard-earned money on a short-term rental, I urge you to stop and think really hard about your decision. In this article, we’re going to cover the type of mindset you’ll need to successfully invest in short-term rentals. We’ll also cover two tools you can use to not only survive as a short-term rental owner but instead thrive and enjoy the journey.
[Disclaimer: We are not accountants, lawyers or financial advisors, so please consult your own team of professionals about the topics covered in this article.]
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If you’re a high-income earner and looking for a way to not only create a significant income source AND at the same time save on taxes, short-term rentals are a good option.
Download Our Free Short-Term Rental Cash-on-Cash Calculator!
Before you take the plunge, you’ll want to pause and think really hard about what you’re about to get yourself into. You need to make sure you have the right mindset to invest, before you embark on your journey!
If you’re concerned about late-night calls from your tenants with a regular rental, short-term rentals are on another level.
Now for this article, I’m assuming you’re self managing, which you’ll have to do if you want to get the tax savings and maximize the income from your short-term rental.
Know What You’re Getting Into
So you might be wondering what it’s like to own and manage a short-term rental.
The bottom line is, there’s a lot more that can happen with a short-term rental compared to a regular rental.
The main reason for this is the sheer number of guests who stay at your property.
When you have so many guests, this results in considerable wear and tear on your property. So things break down more frequently.
The guests themselves range in personality from good to bad. While most are kind and respectful, a small percentage can make you want never want to self-manage again.
This is usually due to unrealistic expectations resulting in non-stop complaints and unreasonable demands.
If that wasn’t enough to make you want to run the other way, there’s also the possibility that your property is used for illegal uses. This could be a raging party or involve illegal drug activity and/or prostitution.
That makes the proverbial “leaky toilet” problem seem like small potatoes!
Having the Right Mindset: How NOT To React
So how would you react to a challenging guest. Or something breaking down in your property at the most inconvenient time?
I can tell you from experience that there are many people who feel they are always the victim.
You can tell who they are because everyone else is the problem. These are examples of not having the right mindset to invest.
If something breaks down, it’s your cleaner’s fault for not noticing the problem ahead of time. Or it’s your contractor’s problem for not doing his/her job the right way in the first place.
If you have one of those guests who light up your phone with messages, it’s the guest’s problem. They are a pain in the you know what.
Now it’s important to point out that there are many degrees of victimhood. Therefore, it’s likely that almost all of us can feel like a victim from time to time.
While it’s probably the norm to feel this way, the good news is that you can choose your thoughts and therefore, change these feelings.
Having the Right Mindset: Life is Happening For You
So how do you change these feelings?
How do you go from feeling you’re a victim of your circumstances to the complete opposite feeling?
This is where having the right mindset is so important.
The answer to this question is, change your thoughts about what’s happening from “life happening to me” to “life is happening for me.”
In other words, you completely change your thoughts. The world is no longer against you. It’s all happening for you.
We’ve been in numerous situations over the last several years with our properties. Despite how bad the situation, there was always something positive that came out of it. Maybe it’s an opportunity to grow both intellectually and emotionally. Maybe you learned a lesson and it helps you avoid a big mistake in the future.
In one case, things actually turned out better in the end! So life was truly happening for us!
The 5 Givens
One other helpful insight that has had a profound effect on our mindset is learning about the “givens” of life.
In his book, David Richo tells us that there are five “givens” of human existence: 1) everything changes and ends, 2) things do not always go according to plan, 3) life is not always fair, 4) pain is a part of life, and 5) people are not loving or loyal all the time.
If you embrace these “givens” as part of life, it’s much easier to shift from feeling like a victim to viewing what happens to you as the way it’s supposed to be.
In Conclusion
We have discussed the importance of having the right mindset to invest. Now when things happen, when you realize that “life isn’t fair” and “everything changes,” at least for us, it’s much easier to accept what’s happened and move on.
Using “life is happening for us” and “the five givens” have put us in the right frame of mind to handle anything that comes our way. And at the same time, enjoy the journey!
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