Using Airbnb to make money

heavy

Hummingbird
Gold Member
WestIndianArchie said:
Stayed in an AirBnb recently

Close to the city, but not close to reliable public transportation.

House went for 160k. That's 4800 down, 757 a month @ 3.92 % interest.
3 finished rooms, 3 unfinished rooms.

He was renting the rooms out @ 31-41 per night.
I could have gotten a monthly for 826.

If only 1 of those 3 rooms was rented, he'd cover his mortgage.

There was some other upkeep involved and expense, but for the most part he'd be okay during the winter and making real money during the summer.

The kicker, he didn't live there. I think he had a full time job besides.
The 2nd kick, it was one of his 3 houses.

I only saw him @ noon when he came to clean the bathroom.

I'm thinking this is a good business model that just needs a bit of tweaking.

WIA
Good lil breakdown.

AirBnB is basically a way for someone to tip-toe into the real estate rental market. With user reviews, you have a good idea of who's renting. If they're idiots, they're only staying a short time anyway, small likelihood of having to evict (I'm sure it's happened before), you only have to put up with people for a short time.

I suspect, all else equal, AirBnB would increase the price of long-term rentals in the area because of the ease of rentals, simply because it would decrease the quantity supplied. There are a certain # of owners who would rather pick and choose when, to whom, and for how much they want. They can keep it available for friends or family to use if needed.

I rented a place in Chicago a couple months ago...around $50 per night, just a room. They made around $200 from me, pretty worth-while to have to put up with a tolerable stranger.

My friend does this in my decent-sized Midwestern city. For the most part, she's had great experience renting out her spare room+bath. Couples in town for weddings, events, etc.
 

DJ-Matt

Hummingbird
Gold Member
I'm considering renting my house out very soon as well, this would be a great way to get an idea for how it's going to be. I don't live in a particularly desirable part of the country but my hope is there will be some interest. Have to wait until I remodel the inside since my carpet and lino is blech condition.

My plan is to keep one of the smaller bedrooms to myself, and rent out the master and the other (three BR total, 2 bath) since I plan to live in my camper during warmer months.

By the way there are a whopping total of 10 AIRBNB properties in my city, 7 of them owned by the same person who is locally known for buying old houses and turning them into bed and breakfasts.
 

Irish

Kingfisher
Gold Member
tattiemasher said:
Irish said:
Now my tenants have moved out, I took some time out to fly back from Asia to Glasgow, UK to do up my old apartment to rent out on airbnb. This thread is full of gold information, particularly from Isaac Jordan (which I have duely +1'd)

I have just about got the place finished off with new carpets and painted walls. Planning to go live with the advert tonight. I will keep this thread updated on how it does

Apartment is a 2 bedroom ideal bachelor pad, great open plan kitchen living room ideal for having a few people round to pre game before going out on the town. The real selling point is the location however, on the doorstep to Glasgow's Merchant City which is one of the best areas in Glasgow for bars, restaurants and general nightlife. It is also about 5 minute walk into the city centre, while 2 minutes in the other direction is the Barrowlands, one of the prime music concert venues. While Celtic Park is a half hour walk away. Thus I am now following Celtic's fortunes a lot closer, particularly in Europe. (Now I certainly have extra reason to cheer them on versus Inter on Thursday)

There's another dude renting out his place in the same building, bar the decor it is practically a carbon copy of my place. So I have a rough idea of what to charge. He just put his prices up from 150GBP per night to now 175GBP midweek and 200GBP at the weekend.

Living room photo below. Let me know what you guys think of the place.

(note: that couch has seen some serious action...)
Which part of the Merchant City is it in? I've only seen a couple of places in the area, but they've usually been well done.

Are you getting good business on the flat? I always thought the prices for Glasgow were far-fetched on AirBnb, but if tourists are biting then why not.

Shame about the result as well, at least the treble is on. :banana:
Just on High Street, Merchant Building. Was a great bachelor pad for me.

It's been up and running for about a month now and been doing really well. Tho mainly because I got a guy come in for a month only to extend for a further couple of weeks. I gave him a bit of a deal for the flat for the long stay consistency.

Only been a couple of minor issues which were easy enough to resolve. I have a couple of friends who live nearby being my on site management for a bit of a cut. Net all in I reckon I am making 2.5x at least what I would have been otherwise renting the place out at.

Having said that I am not sure what sort of interest I would have had otherwise if this guy didn't come along. Only had a couple advance bookings for a day here and there a couple months down the line but not had much else other than a couple of time wasters. But it's hard to say as this guy has had a big slab of my calendar booked out in the immediate future. I reckon most airbnb folk book no more than a month in advance.

For Glasgow the prices on airbnb are surprisingly high. But there was a guy with a near identical flat in the same building getting solid business at a slightly higher rate. Although I personally think my flat looks better I am charging less, tho I need to build up my review base before I up the price.

The odd thing is that the fraser suite professional serviced apartments literally a block away go for less, tho that said they are a fair bit smaller.

sammybiker said:
The freshen up looks great @irish, would like to hear an update as to how it's going.

Don't forget to incorporate expenses into your calculations gents...taxes, insurance, utilities, maintenance & repairs are very real things. As a good rule of thumb, take your gross rent, multiple it by .5 and you'll have your net rent after expenses and a conservative maintenance & repair fund. Then you can subtract your mortgage payments and you'll have your net cash flow.

If you're managing yourself and can handy man a bit, you may be able to increase your cash flow a bit - but gross rents * .5 is a good, long term, conservative rule of thumb.
Yeah, on top of repairs and expenses I also need to amortise the set up costs of getting the place repainted and the carpets done. But having said that, these were things I would have needed to do anyway as not been done since I got the place over 7 years ago.

I am looking at this more from the opportunity cost angle in as how much more net income I am earning versus me renting the place out conventionally. ie additional rent earned vs additional expenses (and hassle) of going through airbnb. The additional costs are essentially your utilities (gas, leccy, broadband) and the big one council tax. Which thanks to the phenomenal number of freeloaders and benefits whores in Glasgow is absolutely extortionate. No less than 235GBP a month. Other than that, other than getting a cleaner in between bookings there's not much more additional expenses than for your usual tenants other than your time and hassle in handling the continuous turnover of bookings.

Still however, I am netting way more than I was on a conventional rental. And I actually feel safer with the airbnb tenants given they have all sorts of verifications and you can look over their reviews also. Heard many many horror stories from friends of their nightmare tenants who moved in only to wreck the place or cease paying rent only because the agency was happy with some forged references provided to them.

There is also one additional massive benefit as well in that I have a place to stay if I need to return to Glasgow for a week or two. I just block it out in my calendar and that's that. Previously I had plenty of friends who offered me their couch or spare room to stay for no cost but nothing beats staying in your old gaff in your old bed.

Still early doors however. I've not been analysing the net profits and cashflow further than some back of the fag packet calculations as it's still too early to really analyse. The big thing will be the volatility of income due to the ad-hoc timing and length of the bookings. I will analyse the trend in depth further once I have a few more months under my belt. Interesting side note, airbnb provides some useful tips and analysis such as suggested daily, weekly and monthly rental price to charge based on what other properties in the nearby area are going at. Also you get occasional notification tips pop up. Such as today where I was pleasingly informed that occupancy rates normally increase by 50% during April to September (assuming based on their booking stats)

Certainly looking into this as a serious long term income option in the future. Potentially acquiring a few properties in Asia (purchase or subletting) and managing full time. Essentially like a buy to let except with a much much higher rental return for not much additional input of management time and hassle. Plus you could potentially use the places yourself to stay in as well when unoccupied.
 
Irish said:
tattiemasher said:
Irish said:
Now my tenants have moved out, I took some time out to fly back from Asia to Glasgow, UK to do up my old apartment to rent out on airbnb. This thread is full of gold information, particularly from Isaac Jordan (which I have duely +1'd)

I have just about got the place finished off with new carpets and painted walls. Planning to go live with the advert tonight. I will keep this thread updated on how it does

Apartment is a 2 bedroom ideal bachelor pad, great open plan kitchen living room ideal for having a few people round to pre game before going out on the town. The real selling point is the location however, on the doorstep to Glasgow's Merchant City which is one of the best areas in Glasgow for bars, restaurants and general nightlife. It is also about 5 minute walk into the city centre, while 2 minutes in the other direction is the Barrowlands, one of the prime music concert venues. While Celtic Park is a half hour walk away. Thus I am now following Celtic's fortunes a lot closer, particularly in Europe. (Now I certainly have extra reason to cheer them on versus Inter on Thursday)

There's another dude renting out his place in the same building, bar the decor it is practically a carbon copy of my place. So I have a rough idea of what to charge. He just put his prices up from 150GBP per night to now 175GBP midweek and 200GBP at the weekend.

Living room photo below. Let me know what you guys think of the place.

(note: that couch has seen some serious action...)
Which part of the Merchant City is it in? I've only seen a couple of places in the area, but they've usually been well done.

Are you getting good business on the flat? I always thought the prices for Glasgow were far-fetched on AirBnb, but if tourists are biting then why not.

Shame about the result as well, at least the treble is on. :banana:
Just on High Street, Merchant Building. Was a great bachelor pad for me.

It's been up and running for about a month now and been doing really well. Tho mainly because I got a guy come in for a month only to extend for a further couple of weeks. I gave him a bit of a deal for the flat for the long stay consistency.

Only been a couple of minor issues which were easy enough to resolve. I have a couple of friends who live nearby being my on site management for a bit of a cut. Net all in I reckon I am making 2.5x at least what I would have been otherwise renting the place out at.

Having said that I am not sure what sort of interest I would have had otherwise if this guy didn't come along. Only had a couple advance bookings for a day here and there a couple months down the line but not had much else other than a couple of time wasters. But it's hard to say as this guy has had a big slab of my calendar booked out in the immediate future. I reckon most airbnb folk book no more than a month in advance.

For Glasgow the prices on airbnb are surprisingly high. But there was a guy with a near identical flat in the same building getting solid business at a slightly higher rate. Although I personally think my flat looks better I am charging less, tho I need to build up my review base before I up the price.

The odd thing is that the fraser suite professional serviced apartments literally a block away go for less, tho that said they are a fair bit smaller.

sammybiker said:
The freshen up looks great @irish, would like to hear an update as to how it's going.

Don't forget to incorporate expenses into your calculations gents...taxes, insurance, utilities, maintenance & repairs are very real things. As a good rule of thumb, take your gross rent, multiple it by .5 and you'll have your net rent after expenses and a conservative maintenance & repair fund. Then you can subtract your mortgage payments and you'll have your net cash flow.

If you're managing yourself and can handy man a bit, you may be able to increase your cash flow a bit - but gross rents * .5 is a good, long term, conservative rule of thumb.
Yeah, on top of repairs and expenses I also need to amortise the set up costs of getting the place repainted and the carpets done. But having said that, these were things I would have needed to do anyway as not been done since I got the place over 7 years ago.

I am looking at this more from the opportunity cost angle in as how much more net income I am earning versus me renting the place out conventionally. ie additional rent earned vs additional expenses (and hassle) of going through airbnb. The additional costs are essentially your utilities (gas, leccy, broadband) and the big one council tax. Which thanks to the phenomenal number of freeloaders and benefits whores in Glasgow is absolutely extortionate. No less than 235GBP a month. Other than that, other than getting a cleaner in between bookings there's not much more additional expenses than for your usual tenants other than your time and hassle in handling the continuous turnover of bookings.

Still however, I am netting way more than I was on a conventional rental. And I actually feel safer with the airbnb tenants given they have all sorts of verifications and you can look over their reviews also. Heard many many horror stories from friends of their nightmare tenants who moved in only to wreck the place or cease paying rent only because the agency was happy with some forged references provided to them.

There is also one additional massive benefit as well in that I have a place to stay if I need to return to Glasgow for a week or two. I just block it out in my calendar and that's that. Previously I had plenty of friends who offered me their couch or spare room to stay for no cost but nothing beats staying in your old gaff in your old bed.

Still early doors however. I've not been analysing the net profits and cashflow further than some back of the fag packet calculations as it's still too early to really analyse. The big thing will be the volatility of income due to the ad-hoc timing and length of the bookings. I will analyse the trend in depth further once I have a few more months under my belt. Interesting side note, airbnb provides some useful tips and analysis such as suggested daily, weekly and monthly rental price to charge based on what other properties in the nearby area are going at. Also you get occasional notification tips pop up. Such as today where I was pleasingly informed that occupancy rates normally increase by 50% during April to September (assuming based on their booking stats)

Certainly looking into this as a serious long term income option in the future. Potentially acquiring a few properties in Asia (purchase or subletting) and managing full time. Essentially like a buy to let except with a much much higher rental return for not much additional input of management time and hassle. Plus you could potentially use the places yourself to stay in as well when unoccupied.
It's just a shame you didn't get in there in time for the Commonwealth Games, you would have made a killing.
 

heavy

Hummingbird
Gold Member
My friend I mentioned above - I'll have to ask her for an update now that she's been doing it for 6 mos - but she was covering the mortgage cost in just a few stays. She actually bought an additional studio apartment to go back and forth, renting out vs staying in either depending on customers.

Don't underestimate the work tho. For your average customer:

Laundry and Cleaning - The big two. She's doing a lot of laundry (mostly time, some cost). Sheets and towels for each customer. You have to keep it spotless (Unless you're pricing really low in a big market. For instance, dirty wouldn't do well in my smaller city, but in Chicago, the place I stayed wasn't really clean, but I was getting it for really cheap.)

Gift basket - she does a little gift basket for customers with local things. You wouldn't have to do this, and you could keep this cost fairly low, but good customer service for sure.

Replacing things - People spill shit, bleed, throw up, have incontinence, etc, etc. Might as well prepare to replace the sheets, towels, comforter, lamps, furniture, clean carpets.

The big one - If they're staying in your spare room (ie where you live), the hassle of having someone there.

My friend usually doesn't worry about being there when they leave (probably check in as well) Her logic is, "I can either spend my time making sure the tenants don't do anything stupid like stealing stuff when they leave, or I don't worry about it and plan on spending some replacement costs for that random weird person who takes my tv."

I know she's made exceptions to this for people she didn't trust.
 
Anyone else here rent out their place while they are out of town?

You'll have to keep the place tidy and find a place to store your valuables but it can be a great way to cover some of your travel costs. I just went to visit my parents who live out of town for 10 days and was able to rent out my place for most of the nights (had a friend managing it) - made over $500.

Now I'm planning on renting out my apartment when I go on weekend/short trips as the money I get from the rental can go towards covering my accommodations.
 

Philly215

Pigeon
This is very common in West Hollywood/Hollywood area. Investors buy new town homes and rent them out through airbnb to travelers.

In every case the other home owners complained to the developer and the association. They made good money from it, but these are 3000 sq ft houses getting top rates. Even owning the property, people still complained.

In my opinion, this is only worth doing if you plan on using it to pay your rent. If you are trying to make an income from it, it will get very hard to manage that kind of volume spread over several properties to actually bring in several thousand a month.
 

Sebastian

Pelican
What city do you live in? what's the going rate for 2 bed room apt?

I am going to move to Seattle. I like capitol hill area but it's more expensive and crowded for me.
But I think if I am going to do Airbnb, I should be in capitol hill area. Just decent 2 bed APT in there is about $1800. I think I can charge $50 a night. So if I book it for 20 days a month. that's $1000. I don't know if it would be worth my time and risk compared to getting just a 1 bed.

Do you think living little away from the city changes a lot?
I am looking at N side of seattle that's about 20 min away from the downtown.
I think American person with a car wouldn't mind but foreign tourists won't consider.

Bottom line Is ROI better if you have a space in the City?




Clint Barton said:
Gross $1500-3000 a month with airbnb for spare room while living in other room. I've got friends that have been doing mutilple whole apts for the last two years and gross $90k for a nice 2br. There are risks involved and they've had to payoff landlords and winter is much slower due to cold.

I could make $300+ a nite while I'm traveling for work or pleasure. I live in a walkup on a low floor and neighbors all young and cool and my guests are not party goers at all. Very responsible. Ideal sitch and I don't have valuables. Even banged a Brazilian airbnb guest for the flag.
 

booshala

Pelican
Gold Member
Airbnb is starting to collect transient occupancy taxes (hotel taxes) for lots of cities now. Usually start around 12% although it's closer to 20%+ in New York. Makes it a lot less attractive when that $200/night shared room in a Brooklyn loft is now $250 a night plus cleaning fees. Always good to have some hotel points on deck.

Not trying to be a wet blanket, but I'm almost positive that 100% compliance is coming soon. My last three months at work have been figuring out how to change municipal codes to address this lost revenue to cities/counties.
 
booshala said:
Airbnb is starting to collect transient occupancy taxes (hotel taxes) for lots of cities now. Usually start around 12% although it's closer to 20%+ in New York. Makes it a lot less attractive when that $200/night shared room in a Brooklyn loft is now $250 a night plus cleaning fees. Always good to have some hotel points on deck.

Not trying to be a wet blanket, but I'm almost positive that 100% compliance is coming soon. My last three months at work have been figuring out how to change municipal codes to address this lost revenue to cities/counties.
I've noticed the same thing. I was recently looking at some properties on Folly Beach in South Carolina just outside of Charleston and there's a bunch of fees and taxes tacked on by the city for rentals. If you live in the place while you rent I think you can skirt the taxes but on top of taxes they require a business license as well for you to have a rental...

4) Sales and Accommodations Taxes

The rules for when you are required to collect sales an accommodation taxes are complicated and depend on whether your house is a primary (4%) or secondary (6%) residence and how many days of the year it is rented. There are several types of taxes that must be collected, and some are paid to the State of South Carolina and some to Charleston County. Please contact Lisa Stokes, (803) 898-5223, or Shannon Attaway, (803) 898-5037, with the State Department of Revenue with specific questions about which taxes you owe. Below are some basic guidelines for taxes, but we encourage you to contact the State or Charleston County about your specific property.

If your home is your primary residence and it is taxed at a 4% property tax rate:

You may rent your primary residence and continue to live in it during rentals (ie: having a roommate or boarder) without paying sales or accommodation taxes.
You may rent your home without living in it for up to 15 days per year without charging accommodation tax or collecting state taxes. However, you must obtain a business license and complete a rental registration form with the City of Folly Beach.
You may rent your home without living in it for up to 72 days per year and keep your 4% exemption, but you must collect all Sales and Accommodations Taxes, as outlined below for second residences. You must also obtain a business license and rental registration license. Failure to collect and pay the appropriate taxes will result in three years of retroactive penalties during the annual audit.

If your home is a second residence or taxed at a 6% property tax rate:

In addition to the business license, rental registration, and beach rules above, you must collect the following taxes. Even if you hire a property manager, you as the property owner are ultimately responsible for collecting these taxes from the renters and submitting them to the appropriate state and local agencies. You may itemize the taxes on rental bills as shown below. Failure to collect and pay the appropriate taxes will result in three years of retroactive penalties during the annual audit.

State Sales Tax 5.0% Remitted to State
State Local Options Sales Tax 1.0% Remitted to State
State Accommodations Tax 2.0% Remitted to State
County Transportation Tax .5% Remitted to State
School District/ Education Tax 1.0% Remitted to State
County Accommodations Tax 2.0% Remitted to County
Folly Beach Accommodations Tax 2.0% Remitted to County
Total Taxes on Accommodations 13.5%
 

Philly215

Pigeon
Yeah, eventually this will go back to supply/demand and the government will eventually regulate it.

Since people have started making money from renting, and travelers are finding cheaper rates, its only a matter of time until the supply gets larger, demand gets smaller, and margins get thinner. Throw in new taxes and restrictions, and possibly higher fees, if rates on average get lower, its much less appealing.

This will all even out in the end with hotels, just like Uber will even out with cabs once the government and basic economics correct it.
 

Clint Barton

Woodpecker
Gold Member
"Eventually" and "starting to" and "even out"...

No risk no reward. After a few good months its all gravy anyways. Plus if you live in the unit you can always just get a roommate for the rest of the lease in the worst case scenario of the Airbnb thing being shut down.
 

tallandblonde

Woodpecker
Just like to add a quick note about my recent experiences to the thread. My room mate and I moved in to a 3 BR in downtown New York City about a month ago. Two rooms were significantly bigger than the others, which we took. The 3rd room was a glorified storage closet, which we ended up putting a lofted bed in there. We've been using Craigslist to rent on a monthly basis, and here are some reasons why we decided not to go the Airbnb route:

1. Taxes. Pretty self explanatory but craigslist doesn't file a form to the IRS telling them out how money you've made. Depending on your salary from other jobs and how much you can deduct on your tax return, this alone could save you 30% or so.
2. Fees. CL you just collect the money and that's the end of that.
3. Turnover. Airbnb guests generally stay about a couple days to a week or so. Room mate and I didn't feel like dealing with this. Our first guest has been staying for the past month and will be staying for the next. No cleaning sheets or anything like that or meeting people constantly to hand off keys.

I think that if you wanted to rent a room for a couple days at a time, then Airbnb is the way to go. But if you have a space that's consistently vacant (and you don't like dealing with the hassle of Airbnb), my room mate and I have found that Craigslist is a viable alternative.

On a side note if you're looking for an apartment in New York city and come across a room similar to ours (two decent sized room with a glorified storage closet as the third) I HIGHLY recommend making use out of that room if it can fit a loft bed. As opposed to paying $1400 a month in rent my room mate and I are paying somewhere around $800 depending on the rate we can get someone in the 3rd room at.
 
Safado said:
This guy has a blog and podcast dedicated to the art of making more money from AirBnB. Got some pretty good tips in there for anyone who wants to make a serious go of this thing.

http://getpaidforyourpad.com/
That guy happens to be me, thanks for the mention :).

I've been traveling the world for almost three years, completely financed by my 2-bdr apartment in Amsterdam. This month I raked in 5700 euros. As a comparison: I used to rent it out long term for 1400 a month.

I wrote a book about my experience which you can find on Amazon (Get Paid For Your Pad.)

I'm now looking sign several long term leases in cities throughout Asia to rent on Airbnb so that I can just bounce around between these cities staying at my own pads and live rent-free :)

I recently launched a video course on Airbnb hosting btw, if you're interested PM me and I'll give you a 80% discount code.

Also happy to answer any questions here.
 

pitt

Hummingbird
Gold Member
I usually rent my room on airbnb when I am in London but when I am travelling I don't really like to rent the room because I am worried that somebody may just rob some of my stuff at home, my brother lives there but sometimes he is just too naive and I get worried that someone may take advantage of that.

Am i over worrying? Any of you ever heard anything about airbnb guests stealing goods?
 

DJ-Matt

Hummingbird
Gold Member
Does AIRBNB work for smaller markets? There are only about 10 properties in my area and the population is around 250k for the metro. Plus this isn't really a tourist destination so I'm worried nothing will come of listing.
 

tallandblonde

Woodpecker
I would check the other properties in the area and see if they have a decent amount of reviews. If that's the case then there are people coming through the area. This will also give you an idea about how much to charge.
 
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