Maximize Your STR Profits with Profit First & Relay Financial

As a short-term rental host, you already know this business is about more than just providing a comfy bed and clean towels. Ultimately, it’s about generating sustainable income, and that’s where mastering your finances becomes crucial. We’ve been proudly using the Profit First Method in our Airbnb Business for years! In this post, we will look at the ins and outs of the Profit First Method, a system designed to revolutionize your approach to STR income.

We’re excited to have partnered with the team at Relay, one of our favorite STR tools, to share with your how the Profit First Method and Relay can help support you in your Airbnb business! 

Relay is fully online, has no hidden fees, and our favorite feature is its built-in Profit First strategies. With Relay, you can automatically allocate funds for taxes, operational expenses, and most importantly—profit. Whether your goal is to simply cash flow or scale to more properties, Relay has you covered. 

Head over to Relay to open your account and as a special offer, all TFV members get $50 when you fund a Relay account!

Table Of Contents:

• Why Traditional Accounting Often Falls Short for Airbnb Owners
  • Profit First For STRs: Shifting Your Mindset
  • Breaking Down The Profit First Strategy for Airbnb
    • 1. Income Account
    • 2. Profit Account
    • 3. Owner’s Pay Account
    • 4. Tax Account
    • 5. Operating Expenses (OpEx)
• The Power of Financial Clarity in your Airbnb Business
• Maximize Airbnb Profit with Strategies that Work!

Why Traditional Accounting Often Falls Short for Airbnb Owners

For many STR owners, traditional accounting often feels like a reactive game. You total up income, subtract expenses, and hope something’s left over. This approach can leave you feeling financially insecure, constantly playing catch-up. Imagine being able to receive email updates about your portfolio performance instead. Wouldn’t that provide more peace of mind?

Profit First For STRs: Shifting Your Mindset

This is where Profit First for STRs steps in as a breath of fresh air. Instead of waiting until month’s end to see what’s left, you prioritize profit from the start. Imagine this system as giving every dollar a job. When your STR income comes in, a percentage is immediately allocated to different accounts: Profit, Owner’s Pay, Taxes, and Operating Expenses.

Grab your copy of Profit First right here

Breaking Down The Profit First Strategy for Airbnb

Let’s break down these core accounts for a clearer picture. These benefit programs can have a significant impact on your STR business.

1. Income Account

Think of this as your STR business’s central hub. This is where all revenue from bookings, cleaning fees, or any additional annuity from other sources goes.

2. Profit Account

Here is where the magic starts. You’re not hoping for profit – you’re making sure you get it upfront. Depending on your business size and goals, a percentage of all income is immediately allocated to your Profit Account. Think of this as your earnings credits for your business.

3. Owner’s Pay Account

Remember, you’re a business owner and deserve consistent pay. Regularly transferring funds to your Owner’s Pay account prevents you from dipping into business funds and ensures you’re compensated for your hard work. It’s important to keep your business finances separate from your personal finances.

4. Tax Account

Taxes are an inevitable part of any business, and setting aside funds consistently can prevent any end-of-year surprises. Allocate a percentage of your STR income to a dedicated tax account. Always stay informed about the latest regulatory letters and advisory letters regarding tax laws.

5. Operating Expenses (OpEx)

This account is designated to handle the everyday costs of running your STR business, including mortgage payments, utilities, maintenance, and marketing costs. By setting a budget and only using these allocated funds, you promote smarter spending. You’ll be surprised how much your cash balance can grow when you are mindful of your spending.

You’ve heard us say it before….know your numbers! Grab our FREE Know Your Numbers Guide right here so you can dive into your finances while fully backed by accurate financial knowledge.

The Power of Financial Clarity in your Airbnb Business

By implementing Profit First in your Airbnb Business, you gain valuable financial clarity and peace of mind. Having a defined benefit plan like this, helps provide financial security for your business. It’s about consciously managing your STR business rather than reacting to financial ups and downs. You begin to make strategic choices, optimize expenses, and ultimately build a healthier and more resilient STR business. Think of the financial report you will be able to produce for potential investors or lenders when you utilize a program like this.

You’ll be giving potential investors more than just a financial report, you’ll be showing them a clear path to profitability. This approach is beneficial whether you own STRs in Ohio or anywhere else. This method is about providing the utmost service and care to your business finances.

With Profit First for STRs, financial management goes from a guessing game to a strategic roadmap towards achieving your goals. With this method, you will find the support portal you need to be successful.

Maximize Airbnb Profit with Strategies that Work!

Adopting the principles of Profit First for Airbnb is more than a financial strategy, it’s about making a conscious decision to prioritize profit and gain control over the financial health of your business. This isn’t just for early career professionals; seasoned business owners can benefit as well. With its straightforward approach and powerful results, implementing Profit First for STRs might be the key to unlocking your business’s full potential.

Calling All Hosts: The Hosting Handbook Is Here!

If you loved this post we invite you to check out our one-stop-shop solution for hosts everywhere —the Hosting Handbook! While you can download all the easy to consume, step-by-step tips we use in our own hosting business and create the ultimate “book” the Hosting Handbook is so much more than that! If you’ve consumed or content for years (or just met us!) this is the reference guide for all the amazing and tactical tips we have for running a profitable and, more importantly hospitable, short-term rental. How do we price for pets? How do we fold our towels? What sheets do we buy? How do I purchase a short-term rental? All these questions (and more!) can be answered in the Hosting Handbook! Check it out now!

Head over to Relay to open your account and as a special offer, all TFV members get $50 when you fund a Relay account!

Want More Financial Strategies For Your STR Business?

Check out these resources:

1. Airbnb Business Banking
2. Make More Money with a Smart Airbnb Pet Strategy
3. Expert Airbnb Hosting Tips: Boost Bookings & 5-Star Reviews

DISCLAIMERS: Relay is a financial technology company, not a bank. Banking services and FDIC insurance are provided through Thread Bank; Members FDIC. The Relay Visa® Debit Card is issued by Thread Bank under a license from Visa U.S.A. Inc. and may be used everywhere Visa® debit cards are accepted. The Relay Visa® Credit Card is issued by Thread Bank pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa credit cards are accepted. *You must spend a minimum of $10,000 within a 30-day billing cycle to earn 1% cash back, or $40,000 within a 30-day billing cycle to earn 1.5% cash back. Once you meet the minimum spend requirement, your cash back reward will be applied to all spend put on your credit card within the 30-day billing cycle. Please refer to the Visa® Signature Rewards Program Terms & Conditions (https://www.relayfi.com/visa-signatur…) for more details.