Follow up question: can anyone give a breakdown of their costs associated with renting on Airbnb? Not just the taxes paid (which I'm sure vary from one municipality to another), but also what they typically spend on all the 'other' stuff?
Startup costs will depend on your space, obviously, but consider a fresh coat of paint, carpet/rugs, mattress, waterproof mattress cover, and at least two sets of bedding per bed, sofa, table/chairs, kitchen items, etc. I furnished my place through a combination of Freecycle/Buy Nothing, Craigslist, Goodwill, and Ikea and did it all for a 2BR/1BA for about $2500. There are certain things not to scrimp too much on - comfy beds and seating options, fully stocked kitchen, thick bath towels, etc. - as this will come back to bite you in guest reviews. Star ratings drive AirBnB's algorithm for how your place gets featured in searches, so this has a direct effect on your bottom line.
Ongoing costs to consider:
- Property taxes
- Lodging taxes or other regulatory requirements: depends on your jurisdiction; in Seattle, I've spent I think about $150 on license application fees (one-time), but AirBnB collects all the taxes on my behalf so that is not a line item for me. I pay regular income tax on my earnings.
- Utilities: my rental space is not metered separately from my own space, so I don't know how much the rental adds specifically, but I would guess about 25%.
- Cleaning: I charge a $100 cleaning fees to my guests and pass 100% of this on to my cleaner. Once a year or so I have a deep cleaning of the carpets done, which is around $300 for the Stanley Steemer.
- Vacancies: I make significantly more on AirBnB than I do with monthly rentals, even with vacancies, so I don't consider this a big cost. I'm booked around 95% of the time. I block off some times for transition time and I also set my calendar for 5-10 night stay minimums, then fill in the shorter periods in between once I have the longer bookings set, which helps minimize open nights.
- Supplies: Around $10/mo. in cleaning supplies and around $15 per booking for the "welcome" items -- snacks, drinks, etc.
- Replacing damaged items, responding to specific requests from guests: Around $150 a year
In short ... once you get up and running, the ongoing costs are really minimal. You can scrimp on a lot of these but adding a little extra for your guests (nice toiletries, snacks, etc.) makes a big difference in terms of their experience and your subsequent ratings.