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To most people, being $12 million in debt sounds like an absolute nightmare. But for Michael Elefante and his wife, it’s the price of financial freedom.

In a recent X post (1), Elefante told his story. He and his wife walked away from six-figure jobs, borrowed hundreds of thousands to buy their first home in Nashville, and listed it on Airbnb. The gamble paid off. The property earned enough to cover the mortgage and then some.

Six years and 11 houses later, they claim to be earning $50,000 to $100,000 a month from short-term rentals — all while carrying millions in debt from their multiple mortgages.

Their message is simple: Instead of fearing debt, use it to buy assets and let those assets pay for your life. It’s a bold strategy, but is their attractive lifestyle a model to follow or a dangerous bet that could collapse under the wrong conditions?

On the surface, the pros are clear.

Elefante and his wife leveraged debt to buy income-producing assets and create financial freedom, allowing them to focus on family, travel and experiences. For those who value time and don’t want to work the 9-to-5 grind, it’s an appealing trade-off.

But the risks should be examined. Carrying $12 million in debt means their success depends entirely on Airbnb listings. Basing your income on another platform’s whims is always risky — if tourism slows, regulations tighten or expenses rise, they’re still on the hook for all 12 mortgages.

If any of their homes were impacted by natural disasters, the income they depend on would be suddenly limited. Even something as simple as a pipe bursting could have an oversized effect on their budget.

And while the couple claims they work only a few hours a week, the reality is likely more complex. Managing multiple properties typically requires full-time attention or the services of an expensive property manager.

On top of that, Elefante has built a side business around teaching others how to follow in his footsteps. He sells books, online courses and content that walk aspiring investors through the process, which suggests that their workload may be more demanding than it appears [2].

In short, managing multiple properties can be complicated — and sometimes you need a little bit of extra support.

That’s where Baselane can help you manage your properties more efficiently. Baselane can save investors an average of $5,000 a year through automated rent payments, visibility improvements and built-in financial tools. Its AI-powered bookkeeping software could even shave up to 150 hours off of your spreadsheet labor a year, depending on the size of your portfolio.

Even better, Baselane is already trusted by 50,000 plus real estate investors.

Baselane’s Core tier includes accounting, tax packages, Schedule E reports and automated rent and late fee reminders for free. You can even sign up today and get a 30-day free trial of their Smart tier, including fast rent deposits in 2 business days and VIP priority support.

Read more: US car insurance costs have surged 50% from 2020 to 2024 — this simple 2-minute check could put hundreds back in your pocket

Most people can’t walk into a bank without a job and qualify for the $420,000 mortgage Elefante used to get started. It’s worth noting that Elefante grew up in Chapel Hill, NC, a well-off area with strong schools, attended the prestigious Elon University (3), and both he and his wife had six-figure jobs before they began their Airbnb venture (4).

That doesn’t make his success impossible to replicate, but it does make it harder for the average person to follow in their footsteps.

Airbnb can also be unpredictable (5). Cities across the U.S. are tightening short-term rental laws, and oversupply in popular markets has already reduced bookings (6) and could cut into host profits.

A recession or shift in travel patterns could quickly change the math, which is an important consideration right now when travel to the U.S. is down (7). And, offloading those homes to get out of the mortgages if needed might not be easy as interest rates rise (8).

If you’re considering an Airbnb investment strategy for yourself, it’s important to start small and keep the risks low. Consider renting out a room or ADU (accessory dwelling unit) on your current property first to test rental demand. This can also help you learn the ropes before taking on a whole mortgage.

Before jumping in, ask yourself:

• Can I afford the mortgage if bookings dry up?

• Do I have cash reserves for repairs, vacancies or slow seasons?

• Am I comfortable being a landlord or paying someone else to do it?

• What are the local laws on short-term rentals?

• Are there any laws in the works that might impact short-term rentals?

The reality is, you don’t need to buy property outright to benefit from investing in real estate. For instance, direct access to the $22.5 trillion commercial real estate sector was long limited to a select group of elite investors — until now.

First National Realty Partners (FNRP) allows accredited investors to diversify their portfolio through grocery-anchored commercial properties, without taking on the responsibilities of being a landlord.

With a minimum investment of $50,000, investors can own a share of properties leased by national brands like Whole Foods, Kroger and Walmart, which provide essential goods to their communities. Thanks to triple net leases, accredited investors are able to invest in these properties without worrying about tenant costs cutting into their potential returns.

Simply answer a few questions — including how much you would like to invest — to start browsing their full list of available properties.

And if you’re looking for consistent rental income, just like the Elefantes, you don’t need to go into debt or even lock in a mortgage. You can invest in shares of vacation homes or rental properties through Arrived.

Backed by world-class investors, including Jeff Bezos, Arrived allows you to invest in shares of vacation and rental properties, earning a passive income stream without the extra work that comes with being a landlord of your own rental property.

To get started, simply browse through their selection of vetted properties, each picked for its potential appreciation and income generation. Once you choose a property, you can start investing with as little as $100, potentially earning quarterly dividends.

For most people, the safest path to this type of financial freedom is through gradual growth. Build equity in your current home, save aggressively and scale up after building a financial cushion. While Elefante’s path isn’t impossible to follow, it may not be as easy to replicate as his online content makes it seem.

Taking on millions in debt can create a lifestyle of freedom, but it can just as easily backfire. The line between financial independence and financial ruin often comes down to the financial resources that you start with, timing and risk tolerance.

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We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.

@melefante6 (1); Skool (2); Elon University (3); Michael Elefante (4); Bloomberg (5); Air Hosts Forum (6); The Associated Press (7); FRED (8)

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.