So What the Hell Happened? Part 4 of 5: Airbnb
September 15, 2017 Posted by Tyler CruzIn part 3 of my “So what the hell happened?” series, I wrote about how I started running a homestay. After our first homestay student, we decided to become Airbnb hosts as well.
So why Airbnb when we were already homestay hosts? Simple – to fill in the voids for when we had no homestay students.
We’ve now been Airbnb hosts for one year, although so far we’ve only ever hosted during the prime tourist season, which here is in July.
What is Airbnb?
Unlike being homestay hosts, I doubt I have to explain to you what Airbnb is, but for those of you living under a rock, Airbnb is an online service that lets people rent out part or all of their home, just like a hotel. People will book a room (or entire house) just like a hotel, pay Airbnb, and Airbnb will pay the host.
Both guests and hosts leave reviews for each other, meaning that it is very safe for both parties, as you will likely be very satisfied with somebody who has an average of 5 stars.
The Fee
One thing that surprises me about Airbnb is just how small the fee is for hosts. According to the Airbnb website: “it’s generally 3%, but may range between 3-5% depending on the cancellation policy selected by the Host.” — this is a miniscule amount, especially when Airbnb is doing all the hard work of getting you a paying guest.
So if you were to list your downtown apartment for $75 a night, you would receive $72.75.
To be honest, I would be fine if Airbnb charged 15%-20%, as my main concern is getting guests period.
How Much Can You Make?
This will of course depend on a number of factors including: your location, the size of your listing, the quality and features of your listing, and the season. A listing in downtown San Francisco will obviously be a hell of a lot more expensive than a place in rural Nebraska, for example.
For me, I live on an island in British Columbia, Canada, and in a house which is about a 10-minute drive to downtown. The listing is for the large downstairs unit, then they have access to our shared spaces such as the living room and kitchen upstairs as well.
Again, we have only ever hosted during the prime season so far, but after expenses (little shampoos and soaps, for example), that 1 room brings in about $1,000 a month profit.
When you compare this to what you can make running a homestay, it’s not even close. However, running an Airbnb listing has its pros and cons as well, which I will be blogging about in an upcoming scheduled post.
Since we were booked solid (something like a 90% booking rate) this month, I raised our unit’s price by $5, but that room won’t be available for likely at least a year due to homestay students arriving in a couple of days.
$1,000 a month is most definitely nothing to sneeze at. While I’m not factoring in taxes for simplicity’s sake, that’s $12,000 in one year you can add on top of your normal income. So two years of Airbnb you could earn enough to put a down payment on a small apartment or even house depending on where you live, then rent that out (either to standard tenants, or again on Airbnb!). Then rinse and repeat.
How Has Running an Airbnb Gone so Far?
First off, I’ve only run an Airbnb by listing the downstairs “room” in the house that I live in, so I have no experience in running an apartment-based listing or a listing in a property that I don’t live in, which are a fair bit different from running one out of your home. When it comes to managing pest control, I’ve always relied on professional services like pest control dayton oh ensure a comfortable stay for guests.
So far, things have gone very well. We’ve had no negative reviews (our lowest rating so far has been a 4/5 (which is very low by Airbnb standards), and actually became a superhost after our first month!
This was actually from a guest that had just checked out this morning!
Due to the review system, we have never had horrible guests. I require positive reviews as a guest requirement, and it’s simply difficult to get bad guests this way. I do not accept unreviewed guests (I only did for my first guests since our listing was also unrated at that time). I did have one guest that I didn’t care for, but he made a lot of bookings and wasn’t terrible so I could live with it.
The two hardest things about running an Airbnb has been:
- The cleaning between guests. This is when you turn into a hotel maid. Fortunately, most guests leave the place extremely clean (this differs from how a guest might leave a hotel room, as guests are rated on cleanliness!), and a lot of the cleaning is redundant. For example, a guest may have just arrived at 11pm and then checks out at 7am, and despite having only been in the room for 8 hours, you still have to clean everything in the room – all the sheets, pillow cases, bathroom, etc.
- We share our kitchen, so it’s a bit of a pain to try to co-ordinate when we can cook dinner. We have a mini-fridge downstairs though, and may in the future add a microwave and kettle to try to limit the use of our upstairs kitchen.
Other than those 2 points above, running an Airbnb is really easy and a fantastic way to bring in additional income.
I would highly recommend Airbnb as both a host and a guest!
Stay tuned for two upcoming Airbnb posts: one on the pros and cons of running one, and another on various tips on being a host.
I’ve thought about being a host a few times, but have never pulled the trigger, mostly due to a comfort level thing about having strangers in my house. I have used Airbnb (and similar services like VRBO) as a guest while traveling though.
At first it’s weird, but then you realize that most guests are pretty awesome people (I’ve only had one set of guests that I felt uneasy about). You have a young daughter though so I can understand your apprehension.
This was before we became parents and still had an “extra” room in the house.
You should talk to your accountant, as some of your principal residence sale tax exemption may be in danger due to the fact that you are using a significant portion of your household to generate income.
So this article is about renting your spare room on Airbnb? Tyler has “fell off” I mean there’s nothing affiliate marketing worthy that you can teach than trying to stay relevant with your investing.
SMH
Yes, it doesn’t behoove him to post so much about renting out his space to make ends meet. Unless his readers are suddenly interested in selling out their privacy and sanity for a few bucks, writing a single post to cover this topic should be enough. I assumed what Tyler was gonna write about was how he’s been hustin’ with offline marketing rather than online. It’s also tasteless to scatter aff links in these posts cause the content is completely off-topic from what a reader would want to read.
Aside from content, the fact that when things were going good for him he’d happily discuss/brag/share his results. When things started slowing down so did his posts (2-month old stats updates) and when things went to shit he went silent completely. That’s not what I wanna see out of an experienced aff marketer. I get word that he’s posted some new content and find his site as useless as some random stay-at-home-mom’s baking and knitting site. What Tyler doesn’t understand for whatever reason is that aff readers want info and updates from bloggers to stay on topic, have meaning, transparency and humility.
So, Tyler, congrats on selling out your sanity and privacy for a few bucks. Question for you though. In the remaining 20 something posts left (bad idea like others have mentioned), will you have ANY aff marketing related content? If not, you should be transparent with your readers that the upcoming posts are excluding it. The only aff marketing content I’ve seen so far are the lame attempts at pushing products to your readers. Pretty sad “comeback” if you ask me. Perhaps future posts will switch gears to marketing topics but you’d be doing me and others a big favor by addressing if that’s the case so i have a reason to come back. Otherwise, it’s annoying as shit if you just keep peddling aff links in-between random off-topic stories.
I haven’t done affiliate marketing in years – I already said I was done with it ages ago. So don’t wait around for me to reveal some campaigns or anything.
I wasn’t waiting or hoping for campaigns or insider info…I have my own shit and have been in this game for a long ass time. Glad you’re being transparent now about the upcoming blog posts not having anything to do with marketing. Thought you’d put out decent marketing based content in some of these posts but doesn’t seem that way based on what’s been put out already. In any event, good luck with whatever you’re doing now.
If you don’t like this blog, don’t read it – go somewhere else.
Well, except for the Amazon and AirBnB affiliate links in this post and the last few… 😉
You literally couldn’t make this up. Tyler promises high quality premium posts prepared days in advance – “3-months of solid content”!
Now he’s informing us about a website more than ten years old with over 3 million listings and giving us nuggets of insight such as “you have to clean between guests”.
Who knew if you had a spare room you could rent it out to student and Airbnb guests?! This is a whole new twist to making money as an innovative entrepreneur!
Well contrary to Tim’s view, I like the articles just fine. I already knew there weren’t going to be any big IM success stories becuase Tyler’s been “off the horse” (and seriously ill) for a couple years now.
Frankly I value honesty and insight a lot more than yet another “how my site made $$$$$$$$$ last month”.
But, of course, everyone’s entitled to like/dislike whatever they choose to.
Tyler, keep on with the planned AirBNB articles, becuase I have two bed/one bath upstairs suite here in my house close to Manila and I have noticed quite a few apartments and room being offered on AirBnB. A grand or two a month coud be very intersting financially, appreciate the info.
You should check around in your area on the Airbnb website to see what the going rate is in your area…
I just dd. First time I had checked AirBNB locally in ages. Places within walking distance for $58 USD per night. Don’t think I’ll get into that just yet, but it’s good to know. Thanks.
For a room or for the entire place? If the former, that seems like a fantastic rate for the Philippines?
Sorry I didn’t see your response until now. That $58 a night I mentioned was for a complete two bedroom townhouse (very small by North American standards) in a so-so subdivision, abut an hour’s travel outside Manila proper.
That’s pretty expensive by local standards here in the provinces. Actually about 8 or 9 times what a typical monthly rental would be on a townhouse like that. Things are very cheap here in the Philippines if you aren’t a tourist 😉 A property like that one would rent for under $250 USD a month any day.
After investigating a little I found that listing is made by an investor in Singapore who has at least 10 more homes in the Philippines in her portfolio.
I did a little checking on an area in Florida we are interested in, near Cape Kennedy. I found almost immediately and investor/entrepreneur with at least 12 listings in a couple adjoining towns … and he has excellent feedback/reviews.
Apparently if you want to do (or outsource) the cleaning and other details there’s money to be made….
I live in downtown Ottawa and have a full view of the fire works. On Canada Day, I tried renting my place out on AirBNB for $2500 per night. There were no takers but I saw other places near me renting for $1000 per night with a minimum 2 night stay. I could have gotten the same amount but I chose not to because I was worried that my stuff would get destroyed or that the guests would throw a party in my place and invite other people in. I might have been overthinking it but it is a big celebration here on that day. Glad to see AirBNB is working for you!
I personally would not book my place for parties – this is where things go bad!
So you are able to profit about $37 per night for the room? ($1k net profit per month at 90% booking)
Something like that, but remember that rates are highly dependant upon your location and property. My rates are on the very low end.
Thank you Tyler for this post!