Author Topic: Anyone used Airbnb as part of their strategy?  (Read 3377 times)

andyp2010

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Anyone used Airbnb as part of their strategy?
« on: October 31, 2015, 08:26:47 PM »
I've got some flatmates at the moment, it's all medium term kind of things, 3-6 months.

Once they leave I've been thinking about using airbnb and essentially turning my home into a bed and breakfast. It's likely to double my rental income from the place and I'm sure there's a bit of extra work but does anyone have experience with this? The main thing I'm wondering is, what are your occupancy rates? If it's only going to be 50% full, obviously not worth it, at 90%+ we should have a winner.

Reddleman

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Re: Anyone used Airbnb as part of their strategy?
« Reply #1 on: November 01, 2015, 06:46:43 AM »
I haven't done this, but from what I know about landlording this seems reasonable:

http://affordanything.com/2014/05/27/the-airbnb-experiment-how-much-did-i-make/

Pretty good read because she tried pretty much the same thing.  The hassle/benefit analysis depends on a lot of factors- mostly how much you want to deal with people and cleaning, and the vacancy rates in your area.

larmando

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Re: Anyone used Airbnb as part of their strategy?
« Reply #2 on: November 01, 2015, 11:11:54 AM »
We've had good results and very low vacancy. But then again we didn't compare to renting long term because we didn't want to have long term flatmates.

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Bracken_Joy

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Re: Anyone used Airbnb as part of their strategy?
« Reply #3 on: November 01, 2015, 11:30:06 AM »
I know the Frugalwoods are planning it as part of their homesteading retirement plan next year.

http://www.frugalwoods.com/category/frugal-homestead-series/
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zephyr911

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Re: Anyone used Airbnb as part of their strategy?
« Reply #4 on: November 02, 2015, 10:53:58 AM »
I have one (1) room set up as an AirBnB listing in a 4BR house with one friend and one other long-term tenant renting individual rooms. (#4 is just storage).
It's worked out well. I had a guy on a 2-mo stay just check out today, and I cleared over $1200 on the deal - 50% more than the room would rent for on a long-term unfurnished basis.

Occupancy rates are highly dependent on your location, typical traveler demographics (e.g. business, tourism) and most importantly, your pricing relative to the market. I've maintained 80% or more since June when we converted the room, just by keeping it at 70-80% of the price of a cheap motel, and being reasonably nice to guests.
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patrickza

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Re: Anyone used Airbnb as part of their strategy?
« Reply #5 on: November 02, 2015, 12:50:15 PM »
We rent out our entire apartment, and stay in a tiny self contained room that's not connected to the apartment (old laundry room). We are getting far more occupancy than expected, even after we raised the prices. It's not the most comfortable living in a small room, but I quite like it, and my wife quite likes the idea of paying off her apartment quickly!

andyp2010

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Re: Anyone used Airbnb as part of their strategy?
« Reply #6 on: November 02, 2015, 09:32:22 PM »
Cool, decided I'm going to try it with 1 room first, don't think there's a high chance I can make less than I am currently judging by what others are charging, just at risk of working harder for the same amount. Quite enamoured with the idea of a few hundred extra bucks a week if I do the whole house. Also the idea of having some days where the house is entirely mine!

Top info guys

Bracken_Joy

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Re: Anyone used Airbnb as part of their strategy?
« Reply #7 on: November 03, 2015, 08:39:08 AM »
Cool, decided I'm going to try it with 1 room first, don't think there's a high chance I can make less than I am currently judging by what others are charging, just at risk of working harder for the same amount. Quite enamoured with the idea of a few hundred extra bucks a week if I do the whole house. Also the idea of having some days where the house is entirely mine!

Top info guys

Don't forget though- higher turn-over means more cleaning!
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humbleMouse

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Re: Anyone used Airbnb as part of their strategy?
« Reply #8 on: November 03, 2015, 08:53:51 AM »
I am going to try airbnb'ing my 1br apartment soon.  Curious as to what the demand will be in Minneapolis of all places but fingers crossed.  I have lots of friends/family I can stay with and would love the reduced rent.
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andyp2010

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Re: Anyone used Airbnb as part of their strategy?
« Reply #9 on: November 03, 2015, 01:57:53 PM »
Cool, decided I'm going to try it with 1 room first, don't think there's a high chance I can make less than I am currently judging by what others are charging, just at risk of working harder for the same amount. Quite enamoured with the idea of a few hundred extra bucks a week if I do the whole house. Also the idea of having some days where the house is entirely mine!

Top info guys

Don't forget though- higher turn-over means more cleaning!

I'm a bit of a clean freak anyway and have stacks of spare new bedding stashed away

Bearded Man

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Re: Anyone used Airbnb as part of their strategy?
« Reply #10 on: November 04, 2015, 10:17:58 AM »
My only caution is city or county regulations. I've read a few articles where cities have banned ABNB and similar apps by limiting rental duration.


calimom

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Re: Anyone used Airbnb as part of their strategy?
« Reply #11 on: November 04, 2015, 10:58:41 AM »
I am going to try airbnb'ing my 1br apartment soon.  Curious as to what the demand will be in Minneapolis of all places but fingers crossed.  I have lots of friends/family I can stay with and would love the reduced rent.


Good way to get some extra income, but be careful.  If you rent, check your lease.  Your landlord might not allow this.  If it's a condo, check your HOA CC&Rs, short term rentals might be in violation.

ajmers

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Re: Anyone used Airbnb as part of their strategy?
« Reply #12 on: November 05, 2015, 07:53:54 PM »
I had decent success doing Airbnb for my second bedroom this summer. I live in a part of the city that is low on hotels and people seem to like coming here so there are a number of airbnbs. After my roommate moved out I decided to go with airbnb so that I could choose to keep the room open for *my* guests when I needed to. I also appreciated being able to decorate and keep it furnished as a guest room. I'm not in a good location for business travelers so it was mostly weekenders, but still over the course of the summer it ended up being a bit more than having a steady roommate. The cleaning did get a little old, though!

My sister moved in with me for a month and I realized - hey, it's nice having someone here on a more consistent basis who does her own laundry! So once she moved out, I got a new roommate, which coincides nicely with the lower demand in winter.

Maya

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Re: Anyone used Airbnb as part of their strategy?
« Reply #13 on: January 02, 2017, 03:07:34 PM »
Just wondering if you went through with it and how did it go?

MayDay

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Re: Anyone used Airbnb as part of their strategy?
« Reply #14 on: January 03, 2017, 04:39:37 AM »
My sis rents a 4 bedroom house in a developing country. She needed the house to get a yard for her dogs, but didn't really need 4 bedroom.

She Airbnb's one or two of the bedrooms.

It isn't much work for her, as she has a maid that for 12$ does all the cleaning, dishes, laundry. The maid comes twice a week normally, 3 times if there are Airbnb people.

She only rents to women and families, or single men who she has a personal connection with. This is for her own comfort level, not necessarily based on data. The main problems she has had are men who have either been piggy levels of slob such that even a thrice weekly maid wasn't enough, and men with nearly live in girlfriends who break house rules. No doubt with time she'll get bad women too :)

She likes it as her pricing and amenities tends to attract other expats, so she gets some conversation and socializing in English, and it pays her rent.

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NoNonsenseLandlord

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Re: Anyone used Airbnb as part of their strategy?
« Reply #15 on: January 03, 2017, 04:49:30 AM »
If you only do it for 14 days or less, it's 100% tax free.

rachael talcott

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Re: Anyone used Airbnb as part of their strategy?
« Reply #16 on: January 03, 2017, 07:43:43 PM »
My sister did this as an experiment this past year and made just under $30K renting out her house, although she got more business from VRBO than Airbnb because of the way each site handles hotel taxes.  She does live in an HCOL area attractive to tourists.

bendavis

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Re: Anyone used Airbnb as part of their strategy?
« Reply #17 on: January 04, 2017, 05:16:42 PM »
Yes sir.

I own ten units, spread over three buildings, the third of which has 6 units and is currently being renovated: www.fromcentstoretirement.com/my-real-estate/. I am planning on leaving 1 of these units to rent out through Airbnb. This building is in a very touristic area.

zephyr911

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Re: Anyone used Airbnb as part of their strategy?
« Reply #18 on: January 05, 2017, 12:00:05 PM »
***UPDATE***

18 months into my AirBnB experiment:

I'll be honest, I don't think I'd do it again. Now that it's set up that way, it makes more sense to ride it for now than to reconfigure for longer-term tenants, but it hasn't met expectations.

Here's a scenario: one guest shows up, has a problem with a minor issue, doesn't have the balls to say anything while there, but leaves and asks for their money back, then writes a scathing review WILDLY exaggerating the issue... and nobody books after that. Drop the price 20%, start to get bookings again, but people paying $30 a night feel entitled to $100 hotel service while they raid the kitchen, eat all your food, and leave messes. And so on.

Not that it can't work, but it's been a real pain in the ass for me, and after spending 6 months' rent on upgrades and furnishings, it's still not netting any more than a stable long-term tenant would.
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clarkfan1979

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Re: Anyone used Airbnb as part of their strategy?
« Reply #19 on: January 07, 2017, 03:17:04 PM »
I'm going to start doing Airbnb in summer 2018.

It makes a lot of sense for one of my rentals because there are very few hotels located in a tourist friendly desirable location. I have a 4 bed/2 bath rental house that gets $2,000/month. If I switch to a 9 month lease, I could get $2,200/month because it's a college town. Some students go home for the summer and don't want to have to pay rent when they are gone and are willing to pay a little extra to save 3 months rent in the summer.

For the 3 summer months, I'm going to ask for $300/night + $100 cleaning fee (done by me). In order to break even, I would need to be above 20% occupancy for the 3 summer months. This also factors in me paying utilities for 3 months.

I have a friend on my softball team that has been doing airbnb.com full-time with one of his rentals. His is around 50% occupancy for the entire year and 80% occupancy for the 3 summer months. He said that I should have no problem hitting 50% occupancy for the summer for my first year, but it will probably take me another 2 years to get it up to 80%.




awilbur27

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Re: Anyone used Airbnb as part of their strategy?
« Reply #20 on: March 09, 2017, 02:08:17 PM »
I think every situation is different based on how many transient visitors/tourists come to your area, and what the hotels typically charge per night each season.  That said, here is my scenario:

I purchased my estate sale 3BR house in Portland, ME for roughly $175K.  If you're not familiar, Portland tends to get a TON of tourists during the summer but is a bit of a ghost town for visitors, with the exception of those passing through to ski areas.  Real estate, strangely enough, is still relatively affordable, so this is the perfect formula for AirBnb.  My house in question had a 420sq ft in-law apartment that was not legal, but was being rented for $400/mo to a relative. Before I purchased, my realtor and I sat down with the zoning office to make sure the 'non-conforming dwelling' could be converted into a legal apartment (the previous owners had converted their garage into this apartment in the early 80s and never got the proper permits).

Long story short is I completely gutted the apartment right after purchasing and converted it into a 'modern rustic' studio apartment. I did most of the work, with the exception of the full rewiring and replumbing.  Total renovations cost me 20K. Since it went live on AirBnB in July 2016, it's had an occupancy rate of about 95%.  The nightly rate ranges from $60 (Jan-Mar) to about $175 (summer weekends).  Average nightly rate is probably about $120 for the year. This will provide me with an additional yearly income of about $25-28K after all taxes.  I also invested in a Roku device and a WIFI signal booster so I can stream things in my own home (30 ft away) and still write off 100% of the apartment internet/cable, 50% Netflix, 50% Amazon Prime, 50% Hulu as a business expense.

My own commitment is very low.  Average stay is about 3 nights, and since I work from home 4 days a week I can build the available rental days around when I'm home.  Now that I've got a system down, it takes me about 30 minutes between stays to change all the towels and linens and to clean the place. 

For me personally this has been a great investment.  In addition to the extra income that I've been putting toward my primary home renovations, I should have my mortgage paid off in 3-4 years.  Best part is I've added an extra $80-100K of value to my home by converting it from a single family to a 2 unit. 

This scenario won't work for everyone, but AirBnb is a great way to get ahead if the situation is right

Dee18

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Re: Anyone used Airbnb as part of their strategy?
« Reply #21 on: March 09, 2017, 04:54:57 PM »
There is a blog by a woman whose focus is real estate investing for airbnbs:

https://www.zeonamcintyre.com/blog/
She's been very successful!

waltworks

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Re: Anyone used Airbnb as part of their strategy?
« Reply #22 on: March 09, 2017, 05:18:32 PM »
As a house-hacking strategy, it's awesome. We finished out a 2 bed/1 bath apartment in our basement this fall and have had great luck with it (something like $9k gross in 3 months).

That said, there are, in my mind, 2 big downsides:
-It does not scale. At least in my area you need to live in the property for it to be legit. No way to just buy stuff up and put it all on AirBnB without risking big big trouble.
-You are tied down and it can be hard to get away/go on vacation. If you are mostly at home all year, awesome. If you have a trustworthy outside cleaning service that won't screw up and can come on a random schedule, awesome. We have not found that to be easy to pull off - but luckily we have small children and aren't out of town a lot (plus we live at a ski resort).

It is an amazing house hack, though. Ours covers our mortgage almost twice over.

-W

SmokeySnow

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Re: Anyone used Airbnb as part of their strategy?
« Reply #23 on: March 17, 2017, 09:56:23 PM »
I use Airbnb as part of my strategy now, but it wasn't always part of my plan. I bought a small duplex (1bd/1ba each side) and started renting out one side as soon as I got some of the renovations done, while living in the other side and doing the rest of the renovations. When I traveled I started using Airbnb for my side, and then quickly saw how profitable it could be. When my tenant gave notice after 2 1/2 years, I started using Airbnb exclusively for one side of the rental. It has been mostly positive for me, I average about 2.5 times the amount I collected in monthly rents, plus I can write off a ton more this way. Occupancy rates are usually only around 75%, and I don't mind it this way--I like being able to offer the rental to family & friends when they come to visit or not do the cleanings sometime. When I buy my next property, ideally I can find the right fit for a long term renter in one side who might be willing to help with the Airbnb side for reduced rent--i.e. cleaning, dropping off laundry, snow shoveling, etc.
Challenges as some others have mentioned are the need to always be present, in constant communication, cleaning schedules, etc. But for me the rewards outweigh the benefits and I should be making an extra $22k-$26K this year after expenses

bendavis

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Re: Anyone used Airbnb as part of their strategy?
« Reply #24 on: March 18, 2017, 03:59:17 AM »
I will, soon.

So my third rental property (http://www.fromcentstoretirement.com/my-real-estate/) is a 6-unit complex, "close" to a touristic spot in Portugal. I planned to leave one of the units to Airbnb exclusively, and rent out the other units to long term tenants. Let us see how I do.

electriceagle

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Re: Anyone used Airbnb as part of their strategy?
« Reply #25 on: Today at 01:03:23 AM »
I have, but I stopped because I wasn't confident in the insurance coverage. There have been significant complaints about Airbnb's coverage.

http://www.airhostsforum.com/t/catastrophic-loss-due-to-professional-criminal-guests-airbnb-denying-60k-damage-claim-help/12403

(not me)

I looked into buying insurance that would fully cover me, but it didn't pencil out. Liability was affordable, but property coverage was not.

I guess it depends on your ratio of expected income to structure value, and your appetite for risk.