Saturday, September 14, 2019

lahug bnb operational expenses and revenues

operational expenses:
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load for guest wifi - 100
laundry soap - 63
toiletries - 122
trash bags - 117
globe internet - 1899
#(P2,301 entered in quicken 9/26/19)

electricity (8/25 to 9/25) - 1100
water for (8/15 to 9/16) - 360
laundry soap - 70

toiletries - 50
laundry soap - 35
2 medium gasuls to replace large - 1536

estimated electricity (9/25 to 10/25) - 4236
estimatedwater (9/15 to 10/16) - 749

estimated elecricity (10/25 to 11/25) - 5000
estimated water (10/15 to 11/16) - 650

estimated electricity (11/25 to 12/25) - 1959
estimated water (11/16 to 12/17) - 200

estimated electricity (12/25 to 1/25) - 4537
estimated water (12/17 to 1/16) - 565

estimated electricity (1/25 to 2/25) - 3338
estimated water (1-17 to 2/16) - 91
internet - 900

estimated electricity (2/25 to 3/25) - 1000
estimated water (2/17 to 3/17) - 200
internet - 900

#entered in quicken 7/15/20: P27,476

# from now on, the electricity/water/laundry expense is estimated as 20% of total revenue (cash + paypal). 

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# note base amount for electricity is P4,500 and for water is P750. example if the electric bill is P6,000 then the airbnb expense is 6,000-4,500= P1,500.


revenue:
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9/16/19 - 2400
#(2400 entered in quicken 9/26/29)
sar cash 10/4/19 - 3200
#a/r globaltech (9/28 to 10/10) - 22800
airbnb 10/25 to 11/21 - 15140
#a/r globaltech  (10/21 to 10/31) - 20000
terra architect cash - 800
airbnb cash - 2400
airbnb cash - 1900
maritez ybanes cash - 10000
airbnb 1/17 - 2286
airbnb 1/16  - 763
airbnb 1/10 - 2492
airbnb 11/27 - 620
airbnb 11/25 - 620
sybil labato cash 1/20 - 5850
airbnb cash 1/22 - 650
# entered in quicken 7/15/20 cash total P24,800 (excluding paypal entries)
cash 8/22 - 740
cash 11/22 - 500
cash 12/6 - 500
cash 12/22 - 500
cash 1/18 - 750
# entered in quicken 8/6/21 cash total P2990 (excluding paypal entries)
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income: P21,645 (+P42,800 went to gikom)

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1/18/20 update:

guest from china playing chinese musical instrument. he also had fun playing the piano:




11/21/19 update:

the total airbnb revenue for just 1 room for 1 month oct 24 to nov 23 is exactly P15,140. the 3 rooms could easily earn P25,000 a month through airbnb. the total revenue for 3 months from september to novemember for the 3 rooms is P64,340. expense is P15,422 for a total income of P48.918. by the way our neighbor's grandmother (cybil's great grandmother) will rent a room (P800/day) for 2 weeks starting december 20 and they will have their christmas and new year family dinner at our place.



11/17/19 update: 

as i predicted, sar will be giving us back his bunk beds because his students are not staying in his hostel. there are just too many options. cebu is over saturated with hostels, airbnb and red doorz. that's why i  did not buy bunk beds yet because i knew this would happen. good thing my girls as servants offer the guest something that will separate us from the competition. but i will temporarily block the calendar in airbnb while i'm in vegas to sell one of my properties.

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financial forecast report (september to november).
(it's important we make these kinds of reports whenever we handle family tasks. we should break the family habit of poor transparency)

highlights:
- posted 1 room to airbnb with positive review so far
- the forecasted profit through nov 21 is P87,000 (P99k revenue - P13k expenses)

details:

i posted 1 room to airbnb just to test it out. so far i got 1 review and it's very positive as you can see in the attached screen shot.  after eduard checked out, a couple (french dude and his pregnant filipina wife) booked it from oct 27 to nov 8. i think they will also give a positive review because they are enjoying their stay. when they arrived the french dude had fever and as advertised, they asked the girls to buy them medicine and food. last night they asked EJ to drive them to a karinderia (motorcycle). EJ does not have a license yet but it was ok because it was already midnight no more citoms. i was just worried because the pregnant wife already had a big tummy. EJ also drove them back home. they asked EJ to join them for dinner but EJ was too shy and told them he will just wait outside. they gave EJ a P100 tip even if i told them to give only P20. the french dude went out to the front yard to join gikom's contractors who were drinking. he did not drink. he just tried some of their pulotan.




the confirmed bookings from oct 25 to nov 21 is P9,468, with 70% occupancy rate as of oct 28 as you can see in the attached screen shot. note there is still enough time for the nov 9 - nov 15 vacancy to be filled. my conservative estimate is that the 3 rooms could earn P20,000 a month through airbnb. as a benchmark, note that saar is renting pintor's house for P20,000 a month.


except with airbnb or hostel, we have the flexibility to stop it anytime whenever mama and papa comes back. gikom wanted mama and papa to live in another place which i was against because he was ignoring the "comfort zone" factor. i mean what about mama's 2 sewing machines? what about her materials and workplace for her soap business? what about the big oven for her apple pie business during christmas? many condos and apartments don't allow you to have gas stoves or ovens. it's also not that easy to transfer the piano. what about mama's love for gardening and planting? if we rent a house that would meet mama and papa's needs, it would easily cost P50k a month. note that the revenue from saar's guests during the trial period was only P5,600 and there was never a problem with my babygirls until the last guest questioned why there are young girls in the house. but actually the main complain of that guest was she saw a spider in the bathroom. in any business, it's normal to once in a while have customers that are never satisfied.

also i think it is important for me to be living with mama and papa considering their age and fragile health. but gikom insisted mama and papa can take care of themselves and they don't need me. when i suggested we should just ask mama and papa he said mama and papa would say they need me but only to protect my feelings.

in the future we can also do a hostel hybrid through bookings.com. but for now the 2 other rooms are making lots of money from gikom's contractors. in just 13 days the revenue was P22,000 (although not yet paid). their stay for oct 21 to nov 21 would incur a P60,000 revenue. i know their company will freak out and surely just get an apartment because they said their projects in cebu could go on for a year depending on the sales. i think it would be a good idea to just bill them P800 per room instead of P400 per person. even that would amount to P48,000 and still does not make sense especially the contractors look like construction workers so any accountant or financial officer would think they don't deserve comfortable accommodations. i think P35,000 a month would a a fair deal considering we pay for the electricity and water.

but i'm sure even if we just charge P20,000 a month, they would rather stay in another place if my babygirl's older sisters are not here. so kicking out my babygirls is not a good financial decision. i'm not even sure gikom wants them to continue to stay here because he told them my girls have HIV to discourage. however, they are contractors and not employees of the company and i don't think they rely on gikom's good graces. however, i think gikom is having cash flow problems because he was trying to borrow money from me and asked me to pay for the revo registration so it's possible that gikom will let them stay here if the money goes to him which i don't mind because that money is technically mama and papa's and i'm sure they would want to help gikom.

as i said, the revenue from saar's students for the 3 rooms during the 1 month trial period was only P5,600. gikom said it's because it's low season. from the start i told saar we need to do a trial period because i really felt his students would prefer exclusivity (israelis only). for his students who want the backpacking experience, our house won't also be a good fit because there are too few rooms and there are no fun activities. meaning even if my babygirls are not here he probably would still have backed out of the deal. i think what made saar back off is when 2 students came to look at the place and decided to stay somewhere else. but note that only EJ and april were here when the 2 students came to look and one of them told me they prefer a more hostel atmosphere. but i think it was a blessing in disguise because saar told me his peak season is around march, which is usually the time mama and papa comes here.

i surveyed the competition landscape  i searched in airbnb for rooms $10-$13 (P500-P650) and there were 300+ available rooms. 6 months ago when i searched a room for michael otsuka there were only 3-5 rooms available for this range. so i thought emphasizing that they will have servants would set us apart from the competition. i think my strategy is working because i'm getting pretty healthy occupancy rate. however, yesterday i got a phone call from airbnb customer relations where the rep asked me to change the title because it sounds negative. i think they have a point and i will go ahead and change it from "travel like a lord with servants" to simply "practical room 1km from ayala mall". what do you think? i think this is more powerful because the main marketing message of a hostel near st therese church near camp lapu lapu is "WALKING DISTANCE TO SM CITY AND AYALA MALL". so maybe the distance to a major mall is very important because they would resort to such lies just to grab the customer's attention.

note that the way i estimate the water and electric consumption by the guest is deduct it from the base amount which is based on the average of the amounts during the 3 months before guests started staying. the base amount for electricity is P4,500 and the base amount for water is P750. of course i will not include this in the operational expense because it's my personal and our family's consumption (alin does laundry for the family) and not related to the business operation. but of course if the BIR starts clamping down on airbnb hosts then i will enter the entire bill amounts to the official records. but i will continue to keep track of the true profit to have a fair tracking on when the profits will start going to mama and papa. because as i said the profits will start going to mama and papa after i recover my expenses. i'm not even including my expenses for EJ and my babygirl's older sisters as labor cost because i will still be incurring these expenses even without the airbnb business. but then again if the BIR starts clamping down then jokes on them because we will be just breaking even. even using minimum wage, their salary will be almost equal to that of the revenues (that's probably why the BIR is not going after airbnb hosts).

about the flooding problem, it only happens very rarely and chances are the guests wouldn't want to go out if it's raining hard. the water recedes pretty quickly thanks to papa's efforts in declogging the canal. and if a guest ever wants to go out before the water recedes, i can just position the sentra to face the gate so they can get in the back of the sentra without having to wade through the flood and then drive them to the iskina or ayala mall. this will be EJ's future responsibility.

with regards to the cat and dog poo problem, i trained the girls to inspect the front yard for dog and cat poo and use a plastic trash bag as gloves and wrapper for the poo and throw it in the garbage can. if the poo was on a cemented area they need to hose down the poo residue. i remember trying to teach the maids to do this tasks when i just arrived from the states in 2015 because stray dogs would poo on our front lawn and it bothered my chipping practice and the maids got angry at me for asking them to pick up the poo. i didn't even tell mama about this because i felt sorry for them.

amaya is pregnant again and i'm administering dexamethasone so the puppies will be aborted. actually a few months months ago amaya delivered a liter of about 5 puppies. it drove me crazy because i thought it will be a nightmare cleaning all the poo when i start having airbnb guests. luckily, all puppies except one got ran over by a car. it was so bizarre as if God was answering my prayers because it all happened in a span of a few days. i would suddenly hear alin scream and cry and then april would tell me one of the puppy's head just got crushed by a passing car. a month ago when i saw amaya mating with the stray dogs, i asked my vet friends how much is it to spay a dog and they said it will at least cost P15k. so i googled a cheaper way to force an abortion and i saw an article to administer 5 milligrams of dexamethasone tablets twice a day for 10 days. but it had to be administered 1 month after mating so i scheduled it in my icloud reminder so i won't forget. i avoided going to my vet friends because i didn't want to offend them. they might think i hate dogs or don't want them to make money so i'm avoiding the spaying procedure which is suppose to be the more humane option.  i went to all the vet shops and supply stores but they didn't have dexamethasone. but i didn't give up. i researched what is dexamethasone and it turns out it's actually a medicine for humans to control inflammation. i went to the pharmacies. the good news is they all carried it but the bad news is it needed a prescription because it's a steroid. i then tried the pharmacies in the slum areas and the one in barrio luz didn't ask for a prescription although i had to bulatik upfront that my vet friend recommended it to treat my dog's illness. it was P2 per 500 mcg tablet. you need ten 500 microgram tablets to get 5 milligrams so i would need 10 X 2 X 10 = 200 tablets but they only had 45 tablets. luckily the TGP pharmacy across the palengke near JY also did not ask for a prescription. fearing the dog will just spit out the food after biting on the bitter tablet, i then researched to find out if the efficacy would degrade if i pound the tablet into a powder. it turns out this depends on the medicine and each medicine would usually indicate if it's ok to do this. so i researched again and it clearly showed that it's ok to pound it into powder form. first i bought peanut butter  and tested if amaya would eat it but she won't. i tried sardines and she gobbled it up quickly. i mixed dexamethasone and luckily she did not notice the medicine and gobbled it up quickly. i'm now on the 3rd day of adminstering. if it does not work, then i might have to put the puppies to sleep if no one is willing to adopt them. if it works, then this calls for another knowledge bomb blog article.

most importantly if dexamethasone will not work, then mama will have to be the one to tell alin that she needs to find a way to give them up and the puppies will be put to sleep if she can't. that's because in last batch of puppies some people were asking for the puppies but alin's family refused to give them up.

update 10/15: dexamethasone worked after only 7 days. amaya's tummy is deflated although i don't know where the fetuses went.  another very weird thing is her last remaining puppy who is now quite grown up got run over by a car and died.

update 4/24/20: amaya is pregnant again. i will try to administer dexamethasone again.

after hosteling for 5 years, i learned that hostels that last long have no professional staff. the staff are usually hostelers who are working for a few months in exchange for a free dorm bed. they don't even get free food. i remember one of the staff in one of the hostels in vegas was a norwegian who would only eat once a day and his meal was always ramen noodles, but he would throw away the noodles and replace it with broccoli instead. most fixes and home improvements are also done by hostelers who happens to be skillful in exchange for free stay. when the beds are full, the staff will have to sleep in the common area sometimes even on the floor. that is why i ignored gikom's request that my girls sleep in the laundry room instead of the terrace because it's normal in hostels to see staff sleeping in the common area.

too much competition is what really kills the hostel business. even if you point a gun at your customers, you will still be fully booked if you don't have competition. i stayed at a hostel in russia that was very popular and always fully booked. the owner asked me to drink a glass of vodka with him and when i refused, he took out a gun and pointed it on my head his wife, who was an olympic gold medalist in slalom skiing 30 years ago was telling him to stop doing that because he might accidentally pull the trigger because he was drunk. he goes, "YOU INSULT ME ??? I OWN THIS HOSTEL AND YOU WON'T DRINK VODKA WITH ME???". so i drank glass after glass and had to go to the hospital afterwards. 3 years later i returned to plot my revenge. i was planning to ambush him and stab him on the neck while he is coming home drunk. which is very easy to do because it was winter and late at night the alleys are very dark and deserted. but luckily he already died of a heart attack.

it's pretty obvious that the main advantage of doing business in the philippines is cheap labor. just like in america, the main advantage is cheap and easy access to capital. in the philippines everyone knows it's cheap labor. as i said labor cost is very critical in the hostel business. it's like the piggery business where if you just buy the feeds market price or from regular suppliers you will just break even. you will only make money if you find a way to get feeds at discounted prices. but i notice saar's staff are always the more expensive fellow israelis. even his assistant instructors. that should trigger some alarm bells.

i was also baffled when i saw saar retile his entire bathroom himself. i know papa does this in america because labor is very expensive. but in the philippines, it's really bad judgement unless you really enjoy doing it and you have all the time in the world. i also never hired a contractor when i fixed the lahug house but that's because there was nothing major that needed to be done that my girls cannot do. it was like 50 different little things that needed creativity and "THINKING OUTSIDE THE BOX" more than an expertise of a contractor. example is patching the couch and reinforcing the bed as you can see in these photos:


this explains why saar told me he wanted to outsource the hostel accommodations for his scuba diving students because he is losing money and he is going crazy trying to manage the hostel. so gikom and saar's demand to hire a professional staff was a terrible idea. that's also why saar kept telling me i'm surely gonna lose money because the aircons in my room are not inverter even if i showed him the computation that i will only be saving 91 cents an hour if i get an inverter and the aircon won't be running for 24 hours (https://ian-crystal.blogspot.com/2019/08/vacuum-your-split-aircon-system.html).

by the way i like saar as a friend. i value his friendship and we still talk whenever we see each other. I NEVER CONFUSE INTELLIGENCE WITH VALUE. just like my babygirls are the dumbest people i've ever met but they are very important to me. just like a pet owner who consider's his dog his best friend even if a dog can never be educated or learn to wash dishes.

i already felt from the moment i met saar that it's not gonna work out. as i mentioned before i made a hole in the terrace kisame to fix a wire that was bursting and sparking. when saar first came to the house with gikom he saw the hole and shouted, "I WANT YOU TO TAKE EVERYTHING DOWN AND REPLACE IT WITH SOMETHING NEW !!!". i was shocked at his stupidity. i told him i just needed to patch it and paint it and he goes, "NO NO NO NO. LISTEN TO ME. LISTEN !!! I WANT YOU TO TAKE THE WHOLE CEILING DOWN AND REPLACE IT. OK?". i said ok. then i warned gikom saar is a bonafide moron and we need to team up to manage him. i told him we should pretend papa calls all the shots and makes all the decision and provides the funding. so every time saar demands something  stupid we will just say something like,

"wow saar your idea makes a lot of sense let's hope my dad will approve. the problem is our dad won't allow us to do anything in this house without his approval and he provides all the funding. too bad our dad can be stubborn sometimes. if only he will allow us to do what you suggest this house will be so awesome".

this way we maintain a good relationship and we don't offend him when we don't satisfy his demands. but to my surprise, gikom sided with saar. instead gikom lectured me that to be successful in business, i need to be creative. he suggested i replace the ceiling with something cheap but looks cool like abaca. i just ignored them and when i was done patching the hole and painting it, turns out they both were impressed at the work i did because it looked nice. note that my girls did most of the hardwork in fixing the house and gikom would sometimes praise them.

also, when i told saar about the need to vacuum a split aircon during installation, he refused to listen and insisted what he did was right when he installed his split inverters without vacuuming. also when i saw his bermuda lawn being overwhelmed with weeds, i told him to let one of my girls pull out the weeds and just pay her P50 it will be done in 30 minutes because his lawn is very small. he said he will be buying a rabbit to take care of the problem. at first i was impressed at the knowledge bomb i even told him, "that's amazing. i didn't know rabbits will only eat the weeds and leave the grass alone". then he said no the rabbit will trim the grass and weeds. so i told him he needs to pull out the weeds not trim them. he told me not to worry because the rabbit will solve the problem.

gikom says i'm making a mistake of thinking i'm smarter than everyone else. actually when i was working in silicons valley mama and papa was worried i don't have self esteem because i keep telling them about how i admire and praise my coworkers because they were super smart. here's the complete story - https://ian-crystal.blogspot.com/2017/04/knowledge-bomb-on-self-esteem.html.

also note how i praise the leader of the contractors staying in our house because he is very talented. it happened twice already i'm fixing my motorbike and trying to figure something out then he passes by on his way out and just takes a quick glance and immediately knows what i'm trying to do and gives me a few words that will solve my problem. a week ago the motor won't start so i was holding a hose thinking it was a fuel line that got cut. he passes by on his way to the sari sari store and after a quick glance tells me that hose is just a diversion from the battery liquid so it does not damage the engine electrical. he suggested i check the gasoline inside the tank maybe the gauge is just broken. surely enough the tank was empty even if the gauge was still at the halfway mark. then yesterday, i was trying to install the step bar that came off but the bolts won't fit. while trying to analyze if it should go under the break pedal bar or over it. he passes by, takes a quick look and says, "tama na yan pok pokin mo lang para maging straight". then i inspected it closely and noticed the part where the bolt goes in was crooked so i straightened it with a hammer and the bolts fit perfectly.

i also do stupid mistakes. when the sala aircon is on the terrace becomes non functional because it becomes like a sauna because of the heat form the condenser. at first i thought i should have placed the condenser in the front wall as you can see in the left photo. but that would also make the front yard a sauna where most people would like to hang out to smoke or drink. the most ideal place would have been the roof right on top of the evaporator (just like my 2 houses in vegas) and i would have saved about P7k on copper pipe costs.


which makes me realize the split ac in landmark will easily break again if we have it fixed. that's because the condenser is very close to the cement fence of c5 so the heat will bounce back so the heat cannot escape efficiently so the freon cannot condense properly so the compressor will have to work harder which will give it a shorter life span.













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