Post by High Priestess on Nov 11, 2015 0:46:15 GMT
Originally posted on New Hosts Forum, moved to this forum since we don't allow advertising there and this post was viewed by many as advertising.
MICHAEL shared Nov 10 2015
Would you as a host factor or sell your reservation earnings at a discount ahead of time?
Airbnb does not release earnings to hosts until 24 hours after guest check in.Would you as a host factor or "sell" those earnings ahead of time at a discount?If so, what is that discount for selling 2 weeks to 90 days ahead of time? For example, if your expected earnings for a $250 per night stay for a week 60 days from now, plus a $30 cleaning fee, less Airbnb's 3% fee is $1,700, would you factor those earnings today for ~90% of earnings or $1,550?I think there is a company that has started to do this.I look forward to your feedback.
Ed & Hugh
Sounds like a terrible deal...nearly 53% annualized interest rate for the service. Most people would be better off getting a cash advance against their credit card, which would still be expensive, but not quite as bad as this deal.
MICHAEL
Well before Airbnb you would probably argue that "whoa, this company wants to take 3% of my profits for renting out my OWN home?". Depending on how many times you rent your home in a given month, this 3% adds up to even a HIGHER cost as it is not a 3% APR, but 3% of proceeds. Your home is your asset and Airbnb's fee is a cost so you could argue it is indeed "interest". Our service will charge 2-3% depending on the cost of the line of credit we secure. As such, the rate will reflect host's willing ness to use our service. We do no deserve to be in business and will be put out of business if all hosts share your sentiment and we cannot agree on a market equilibrium rate. I will say again that I truly appreciate your criticism and critique of our business so that we can make more accomodative changes. Especially this early in the process. Thank you.
MICHAEL
Ed & Hugh - thank you for your feedback. We are trying to figure out what that effective discount is that hosts would indeed accept. We are not aware of any cash advance or lending businesses that would advance against an Airbnb host receivable.
In your honest opinion, what would the fair discount be 15, 30 and 60 days out? What would you accept or what do you think is fair? We are seeking to get feedback from hosts to find this equilibrium to make our business viable and provide this service to hosts.
We have started the company and it is called AirPay. You can visit it at www.airpayhost.com/
Ed & Hugh
In your original message you said you "think there is a company that has started to do this." Then you suddenly remember that it's your company! You're trying to get people to visit your site, but insist, "we are not advertising." The APR shown in the example on your web site is over 65%, yet you claim that you are not a loan shark operation. There are red flags all over, and hopefully hosts will stay away. I'm tempted to flag your post to have it deleted, however your post is an excellent warning to all hosts of the types of scams that are out there, so I think it should stay.
Ed & Hugh
And actually, some of the examples on your site show an annualized rate of over 81%! Stay away folks!
MICHAEL
Thanks guys. Once again...we have not made one advance with this business and we are speaking with hosts to finds to appropriate rate. The rates on our website will change. They are just examples. This service will not be for everyone. Also a scam takes money first...does not give it first, as our business model will. It is important you understand this. We thoroughly appreciate your feedback. We really do. And our rates will be dramatically reduced to reflect our sentiment and feedback, as well as that of other hosts we speak with. Thank you.
MICHAEL
I would also say that you saying we charge 80% APR is like saying Airbnb charges you 36% APR (the 3% host fee x 12).
Ed & Hugh
Obviously, AirBNB is not in the loan business so it makes no sense to compare their fee to an interest rate on a loan. The host fee is not for any particular amount of time, so it makes no sense to multiply it by 12 (or any other random number).
MICHAEL
You can visit us on the web by googling "airpay airbnb". We are the sixth or so link down. We cannot post a web address in this forum.
Ernest
Not happy to see advertising on this forum.
Deb
I agree. Especially this type of advertising.
MICHAEL
Ernest, we are not advertising. We are seeking feedback from host on this potential service, which would essentially give hosts a receivable factoring option. This is helpful to hosts with two or more listing looking to grow. We are in conversations with several hosts in the NYC area on this and would like your feedback as well. Thank you.
Margaret
This is very distasteful, skimming money off the income of hosts. Sounds like money lending.
Ed & Hugh
This is not the appropriate venue for loan sharks.
MICHAEL
Thank you, Margaret. Different people value money differently and that is the premise of this service. With almost any asset you own today, you are able to obtain financing, whether that is a car, primary home, rental property, education, etc. More specifically, almost all businesses across the world use accounts receivable factoring where they pledge their accounts receivable from an invoice to a financial institution or their bank, and they receive 85% or so of those monies today to fund their business and make working capital investments. Listings are assets of Airbnb hosts, as they produce cash flow and have a present value based on that cash flow. As such, this service would provide hosts with the ability to book well into the future and collect that money today to travel themselves, make repairs or add furnishings to current listings, buy a new listing, or for any other reason. No bank or financial institution gives Airbnb hosts this option yet. It will not be for all hosts. But for hosts with several properties and who have confirmed reservations out into the future 30, 60 or 90 days, this will likely be beneficial to them.
Deb
Michael, I've always been curious how much $ Airbnb makes by holding the guest payments until the day after check in. This is called a float, correct? It's got to be some substantial coin. Do you have any data on this?
MICHAEL
Hi Deb - that is a very curious question. I think the correct term is called the "interest carry". With all elese held constant, yes, AirBNB makes more "spread" on listing further booked ahead in time, as they do not pay interest to the guest or host, yet they are holding those monies in their bank accounts. You can bet as large as they are that they do get a decent rate on that money with a large bank. Airbnb is a private company so there is no information on this. Great question though.
Gretchen
Sounds like loansharking to me
MICHAEL
Hi Gretchen - thank you for your feedback. Loan sharking is illegal. Accounts receivable factoring is not. Thank you.
Jeannette
Terrible idea. If the guests cancels, POOF.
Evelyn
Or the host cancels.. What is the guarantee to this company?
MICHAEL
In the trailing 12 months August, Airbnb hosts in the New York City area earned $451 million in revenue. This number is net of any cancellations. Moreover, Airbnb would not be a successful business if its hosts or guests were always canceling. In fact, the business is so strong because its guests and host do not cancel. The cancellation rate is probably somewhere south of 5-7%. What traveler and guest likes to cancel their future plans and create uncertainty? What host likes to cancel and cut off their earnings. Yes, there are circumstances that absolutely make cancellations occur and they will happen. But the cancellation rate of all bookings must be put into context. Airbnb is valued at $25 billion and has 60 million guests and 2 million listings. It would not be valued at this valuation and have this many guests and hosts if cancellation was a major risk. Like any bank or other financial institution, there will be a small delinquency and default rate as a percent of the whole. We will seek to minimize credit risk by only advancing against receivables from hosts who have been on the site a while and have great reviews. Moreover, we will focus on dense markets with high daily rates.
Gretchen
Semantics. You would be taking advantage of desperate people and taking a huge cut of their profits. What if the gust cancels? You going to break their kneecaps or just charge them 300% interest compounded weekly till they can pay you back?
MICHAEL
Gretchen - this service has not been established yet and the rate has not been determined yet. We are speaking to hosts through forums like this to see what that rate is. We will not be starting this business to charge significant interest and take profits. The rate charged will be in equilibrium with what hosts demand and what we are willing to give. So please stop using the terms loan sharking and 300% rates, as that is pure nonsense. Moreover, the host will be allowed to counter offer our offer on our website in real time. This will keep us in touch with the market and allow hosts to dictate terms. If a guest cancels, the host will get an extension of the receivable advance to pay it back over another month or so at a legal statutory rate in line with state law. But again, the hosts we will cater too will probably have additional listings or bookings and will be able to pay the amount off. And do not forget that we will have given them the money already into their account, and the average factoring size will probably be (phone number hidden).
Gretchen
Right. Providing a valuable service for poor people who need root canals and weed. Got it.
MICHAEL
Your hyperbolic attitude makes you unfit to comment on this post with any sense. Please move on.
Susan
As most of my bookings happen with days of the guest arriving this would not be worthwhile for me personally.
MICHAEL
Me too Susan! I am usually booking Friday on Monday or at most 2-4 weeks out. Thank you!
-------------------------------------------------------------------------------------------------------------------------------------------------------------
This is the website MIchael refers to:
www.airpayhost.com/
From the website:
Q&A
Below is a list of frequently asked questions from Airbnb hosts about AirPay:
How does AirPay determine how much to give me for my reservation earnings?
AirPay's percentage of reservation earnings advanced to you will be a function of a variety of factors, including how long you have been on Airbnb, how long your guest has been on Airbnb, who many reviews and of what quality you and your guest have, your location, your average daily rate and your credit.
What does AirPay need from me as the host to advance me my earnings?
With your application, AirPay will require a
Does AirPay run a credit check on me?
AirPay does not run a credit check on you but as part of due diligence you will be asked to provide a copy of your free credit report from CreditKarma.com.
How long does it take AirPay to send me funds for my future reservation?
AirPay will deposit funds into your account 24-48 hours after approval ad you excepting our offer.
What if my guest cancels after I have received funds?
You will be responsible for the funds if your guest cancels. The reservation advance to you will be structured as a personal secured loan, secured by the reservation receivable, with recourse to you personally if the guest cancels or does not pay.
When does AirPay receive the money from my reservation?
Airbnb credits hosts the earnings from their reservation 24 hours after their guest(s) checks in. At the time of your application with AirPay, and prior to you receiveing funds, you will provide AirPay with the bank account information where Airbnb will deposit those funds. AirPay will then automatically debit the funds out of that account 24 hours after your guest checks in.
How it works:
Setting up an account and getting paid with AirPay is quick and easy.
Step 1: Confirm a reservation through your Airbnb account.
Upon confirmation of a reservation between you as the host and another AirBnb member, visit AirPayHost.com to create your profile and register your reservation to get a quote from AirPay. You only have to create a profile once, which makes your future transactions with AirPay seamless.
Step 2: Register with AirPay to see how much AirPay will pay you today for your future booked reservation.
After creating a profile and registering your reservation with AirPay, we will offer to pay you a significant portion of your earnings from that future reservation, depending on your location, how long you have been on Airbnb, how far in the future the reservation is, and you and your guest's reviews, among other criteria. This offer will range from 85% to 98% of your prospective net reservation earnings from Airbnb.
Step 3: Get funds within 48 hours.
When you create your profile with AirPay, you will also be asked for your bank account information that you use to get paid through Airbnb. This is the same account through which you would ordinarily receive funds from Airbnb 24 hours after your guest checks in. If you accept AirPay's offer today for your future reservation earnings, we will direct deposit the funds into your account within 48 hours. AirPay will then direct debit the funds Airbnb deposits into your account 24 hours after your guest checks in on the future reservation date.
How one gets paid:
AirPay allows Airbnb hosts to get paid today for reservations they have booked in the future. Below are a few examples of offers Airbnb hosts can expect to receive from AirPay:
John rents his condo in New York to Sarah for one week (7 days), 60 days from now, for $500 per night plus a $50 cleaning fee. John's net earnings are $3,444 after Airbnb's 3% host fee. Instead of waiting 60 days, plus 24 hours for his earnings to be released from Airbnb, AirPay offers to pay John $3,214 today.
Lisa rents her apartment in San Francisco to Derek for New Years Weekend (3 days), 30 days from now, for $160 per night plus a $30 cleaning fee. Lisa's net earnings are $495 after Airbnb's 3% host fee. Instead of waiting 30 days, plus 24 hours for her earnings to be released from Airbnb, AirPay offers to pay Sarah $473 today.
Franco rents his vacation home in Miami to Chad for one week (7 days), 90 days from now, for $260 per night plus a $60 cleaning fee. Franco's net earnings are $1,824 after Airbnb's 3% host fee. Instead of waiting 90 days, plus 24 hours for his earnings to be released from Airbnb, AirPay offers to pay John $1,662 today.
Sign Up and Get Paid with AirPay Today
If you are an Airbnb host and are interested in getting paid with AirPay today for a future booked reservation that is 15 to 90 days into the future, please fill out the below and we will contact you in 24 hours with an offer. We are in the process of fully automating our website and will have instant quote estimates for all hosts shortly. Thank you!
MICHAEL shared Nov 10 2015
Would you as a host factor or sell your reservation earnings at a discount ahead of time?
Airbnb does not release earnings to hosts until 24 hours after guest check in.Would you as a host factor or "sell" those earnings ahead of time at a discount?If so, what is that discount for selling 2 weeks to 90 days ahead of time? For example, if your expected earnings for a $250 per night stay for a week 60 days from now, plus a $30 cleaning fee, less Airbnb's 3% fee is $1,700, would you factor those earnings today for ~90% of earnings or $1,550?I think there is a company that has started to do this.I look forward to your feedback.
Ed & Hugh
Sounds like a terrible deal...nearly 53% annualized interest rate for the service. Most people would be better off getting a cash advance against their credit card, which would still be expensive, but not quite as bad as this deal.
MICHAEL
Well before Airbnb you would probably argue that "whoa, this company wants to take 3% of my profits for renting out my OWN home?". Depending on how many times you rent your home in a given month, this 3% adds up to even a HIGHER cost as it is not a 3% APR, but 3% of proceeds. Your home is your asset and Airbnb's fee is a cost so you could argue it is indeed "interest". Our service will charge 2-3% depending on the cost of the line of credit we secure. As such, the rate will reflect host's willing ness to use our service. We do no deserve to be in business and will be put out of business if all hosts share your sentiment and we cannot agree on a market equilibrium rate. I will say again that I truly appreciate your criticism and critique of our business so that we can make more accomodative changes. Especially this early in the process. Thank you.
MICHAEL
Ed & Hugh - thank you for your feedback. We are trying to figure out what that effective discount is that hosts would indeed accept. We are not aware of any cash advance or lending businesses that would advance against an Airbnb host receivable.
In your honest opinion, what would the fair discount be 15, 30 and 60 days out? What would you accept or what do you think is fair? We are seeking to get feedback from hosts to find this equilibrium to make our business viable and provide this service to hosts.
We have started the company and it is called AirPay. You can visit it at www.airpayhost.com/
Ed & Hugh
In your original message you said you "think there is a company that has started to do this." Then you suddenly remember that it's your company! You're trying to get people to visit your site, but insist, "we are not advertising." The APR shown in the example on your web site is over 65%, yet you claim that you are not a loan shark operation. There are red flags all over, and hopefully hosts will stay away. I'm tempted to flag your post to have it deleted, however your post is an excellent warning to all hosts of the types of scams that are out there, so I think it should stay.
Ed & Hugh
And actually, some of the examples on your site show an annualized rate of over 81%! Stay away folks!
MICHAEL
Thanks guys. Once again...we have not made one advance with this business and we are speaking with hosts to finds to appropriate rate. The rates on our website will change. They are just examples. This service will not be for everyone. Also a scam takes money first...does not give it first, as our business model will. It is important you understand this. We thoroughly appreciate your feedback. We really do. And our rates will be dramatically reduced to reflect our sentiment and feedback, as well as that of other hosts we speak with. Thank you.
MICHAEL
I would also say that you saying we charge 80% APR is like saying Airbnb charges you 36% APR (the 3% host fee x 12).
Ed & Hugh
Obviously, AirBNB is not in the loan business so it makes no sense to compare their fee to an interest rate on a loan. The host fee is not for any particular amount of time, so it makes no sense to multiply it by 12 (or any other random number).
MICHAEL
You can visit us on the web by googling "airpay airbnb". We are the sixth or so link down. We cannot post a web address in this forum.
Ernest
Not happy to see advertising on this forum.
Deb
I agree. Especially this type of advertising.
MICHAEL
Ernest, we are not advertising. We are seeking feedback from host on this potential service, which would essentially give hosts a receivable factoring option. This is helpful to hosts with two or more listing looking to grow. We are in conversations with several hosts in the NYC area on this and would like your feedback as well. Thank you.
Margaret
This is very distasteful, skimming money off the income of hosts. Sounds like money lending.
Ed & Hugh
This is not the appropriate venue for loan sharks.
MICHAEL
Thank you, Margaret. Different people value money differently and that is the premise of this service. With almost any asset you own today, you are able to obtain financing, whether that is a car, primary home, rental property, education, etc. More specifically, almost all businesses across the world use accounts receivable factoring where they pledge their accounts receivable from an invoice to a financial institution or their bank, and they receive 85% or so of those monies today to fund their business and make working capital investments. Listings are assets of Airbnb hosts, as they produce cash flow and have a present value based on that cash flow. As such, this service would provide hosts with the ability to book well into the future and collect that money today to travel themselves, make repairs or add furnishings to current listings, buy a new listing, or for any other reason. No bank or financial institution gives Airbnb hosts this option yet. It will not be for all hosts. But for hosts with several properties and who have confirmed reservations out into the future 30, 60 or 90 days, this will likely be beneficial to them.
Deb
Michael, I've always been curious how much $ Airbnb makes by holding the guest payments until the day after check in. This is called a float, correct? It's got to be some substantial coin. Do you have any data on this?
MICHAEL
Hi Deb - that is a very curious question. I think the correct term is called the "interest carry". With all elese held constant, yes, AirBNB makes more "spread" on listing further booked ahead in time, as they do not pay interest to the guest or host, yet they are holding those monies in their bank accounts. You can bet as large as they are that they do get a decent rate on that money with a large bank. Airbnb is a private company so there is no information on this. Great question though.
Gretchen
Sounds like loansharking to me
MICHAEL
Hi Gretchen - thank you for your feedback. Loan sharking is illegal. Accounts receivable factoring is not. Thank you.
Jeannette
Terrible idea. If the guests cancels, POOF.
Evelyn
Or the host cancels.. What is the guarantee to this company?
MICHAEL
In the trailing 12 months August, Airbnb hosts in the New York City area earned $451 million in revenue. This number is net of any cancellations. Moreover, Airbnb would not be a successful business if its hosts or guests were always canceling. In fact, the business is so strong because its guests and host do not cancel. The cancellation rate is probably somewhere south of 5-7%. What traveler and guest likes to cancel their future plans and create uncertainty? What host likes to cancel and cut off their earnings. Yes, there are circumstances that absolutely make cancellations occur and they will happen. But the cancellation rate of all bookings must be put into context. Airbnb is valued at $25 billion and has 60 million guests and 2 million listings. It would not be valued at this valuation and have this many guests and hosts if cancellation was a major risk. Like any bank or other financial institution, there will be a small delinquency and default rate as a percent of the whole. We will seek to minimize credit risk by only advancing against receivables from hosts who have been on the site a while and have great reviews. Moreover, we will focus on dense markets with high daily rates.
Gretchen
Semantics. You would be taking advantage of desperate people and taking a huge cut of their profits. What if the gust cancels? You going to break their kneecaps or just charge them 300% interest compounded weekly till they can pay you back?
MICHAEL
Gretchen - this service has not been established yet and the rate has not been determined yet. We are speaking to hosts through forums like this to see what that rate is. We will not be starting this business to charge significant interest and take profits. The rate charged will be in equilibrium with what hosts demand and what we are willing to give. So please stop using the terms loan sharking and 300% rates, as that is pure nonsense. Moreover, the host will be allowed to counter offer our offer on our website in real time. This will keep us in touch with the market and allow hosts to dictate terms. If a guest cancels, the host will get an extension of the receivable advance to pay it back over another month or so at a legal statutory rate in line with state law. But again, the hosts we will cater too will probably have additional listings or bookings and will be able to pay the amount off. And do not forget that we will have given them the money already into their account, and the average factoring size will probably be (phone number hidden).
Gretchen
Right. Providing a valuable service for poor people who need root canals and weed. Got it.
MICHAEL
Your hyperbolic attitude makes you unfit to comment on this post with any sense. Please move on.
Susan
As most of my bookings happen with days of the guest arriving this would not be worthwhile for me personally.
MICHAEL
Me too Susan! I am usually booking Friday on Monday or at most 2-4 weeks out. Thank you!
-------------------------------------------------------------------------------------------------------------------------------------------------------------
This is the website MIchael refers to:
www.airpayhost.com/
From the website:
Q&A
Below is a list of frequently asked questions from Airbnb hosts about AirPay:
How does AirPay determine how much to give me for my reservation earnings?
AirPay's percentage of reservation earnings advanced to you will be a function of a variety of factors, including how long you have been on Airbnb, how long your guest has been on Airbnb, who many reviews and of what quality you and your guest have, your location, your average daily rate and your credit.
What does AirPay need from me as the host to advance me my earnings?
With your application, AirPay will require a
Does AirPay run a credit check on me?
AirPay does not run a credit check on you but as part of due diligence you will be asked to provide a copy of your free credit report from CreditKarma.com.
How long does it take AirPay to send me funds for my future reservation?
AirPay will deposit funds into your account 24-48 hours after approval ad you excepting our offer.
What if my guest cancels after I have received funds?
You will be responsible for the funds if your guest cancels. The reservation advance to you will be structured as a personal secured loan, secured by the reservation receivable, with recourse to you personally if the guest cancels or does not pay.
When does AirPay receive the money from my reservation?
Airbnb credits hosts the earnings from their reservation 24 hours after their guest(s) checks in. At the time of your application with AirPay, and prior to you receiveing funds, you will provide AirPay with the bank account information where Airbnb will deposit those funds. AirPay will then automatically debit the funds out of that account 24 hours after your guest checks in.
How it works:
Setting up an account and getting paid with AirPay is quick and easy.
Step 1: Confirm a reservation through your Airbnb account.
Upon confirmation of a reservation between you as the host and another AirBnb member, visit AirPayHost.com to create your profile and register your reservation to get a quote from AirPay. You only have to create a profile once, which makes your future transactions with AirPay seamless.
Step 2: Register with AirPay to see how much AirPay will pay you today for your future booked reservation.
After creating a profile and registering your reservation with AirPay, we will offer to pay you a significant portion of your earnings from that future reservation, depending on your location, how long you have been on Airbnb, how far in the future the reservation is, and you and your guest's reviews, among other criteria. This offer will range from 85% to 98% of your prospective net reservation earnings from Airbnb.
Step 3: Get funds within 48 hours.
When you create your profile with AirPay, you will also be asked for your bank account information that you use to get paid through Airbnb. This is the same account through which you would ordinarily receive funds from Airbnb 24 hours after your guest checks in. If you accept AirPay's offer today for your future reservation earnings, we will direct deposit the funds into your account within 48 hours. AirPay will then direct debit the funds Airbnb deposits into your account 24 hours after your guest checks in on the future reservation date.
How one gets paid:
AirPay allows Airbnb hosts to get paid today for reservations they have booked in the future. Below are a few examples of offers Airbnb hosts can expect to receive from AirPay:
John rents his condo in New York to Sarah for one week (7 days), 60 days from now, for $500 per night plus a $50 cleaning fee. John's net earnings are $3,444 after Airbnb's 3% host fee. Instead of waiting 60 days, plus 24 hours for his earnings to be released from Airbnb, AirPay offers to pay John $3,214 today.
Lisa rents her apartment in San Francisco to Derek for New Years Weekend (3 days), 30 days from now, for $160 per night plus a $30 cleaning fee. Lisa's net earnings are $495 after Airbnb's 3% host fee. Instead of waiting 30 days, plus 24 hours for her earnings to be released from Airbnb, AirPay offers to pay Sarah $473 today.
Franco rents his vacation home in Miami to Chad for one week (7 days), 90 days from now, for $260 per night plus a $60 cleaning fee. Franco's net earnings are $1,824 after Airbnb's 3% host fee. Instead of waiting 90 days, plus 24 hours for his earnings to be released from Airbnb, AirPay offers to pay John $1,662 today.
Sign Up and Get Paid with AirPay Today
If you are an Airbnb host and are interested in getting paid with AirPay today for a future booked reservation that is 15 to 90 days into the future, please fill out the below and we will contact you in 24 hours with an offer. We are in the process of fully automating our website and will have instant quote estimates for all hosts shortly. Thank you!