With Airbnb, homeowners have a rare opportunity to generate income from renting out rooms in their homes or offering their entire house to travelers.
According to a survey of 1,000 people from the data company Clever, about 54% of people who own their homes say that they would consider renting it through Airbnb. About 82% of them believe that it’s a good money-marketing strategy.
That belief is well-founded. According to research from the lender Earnest, Airbnb hosts make about $924 per month.
Homeowners may not get rich off of Airbnb hosting, but hosting can generate a fair amount of side-income for families.
The Upfront Costs of an Airbnb Rental
It may sound easy to simply list your home on Airbnb and wait for guests to book your space, but there are some upfront costs that homeowners must keep in mind.
A little redecorating may be in order. Successful Airbnb hosts say that every room must be furnished, and those furnishings should be relatively new. They estimate that the cost to redecorate could be $1,500 for each bedroom and up to $3,000 for the other common areas.
It may sound like a high price to pay, but that investment will offer a high return in more bookings and a higher nightly price.
Superhosts recommend investing in toiletries, pantry staples, WiFi, extra towels, and even a digital keyless entry system.
Other homeowners invest very little in redecorating, but instead, made repairs and spruced up their space through low-cost or DIY projects.
Managing the Property
There are other costs that you might need to consider if your home receives a lot of bookings. It may become difficult to manage the property on your own, especially if you’re out traveling yourself. Co-hosting services like those offered by Airbnb property management services remove some of that burden by aiding in the management of the property.
Airbnb hosts have to deal with a mountain of emails, messages and phone calls. Co-hosts can aid in the management process by assisting with urgent issues, helping with the check-in process and offering tips.
There’s no doubt that Airbnb hosting does require a significant time investment. The more time you invest in communication, marketing and improvements, the more bookings you’ll enjoy.
The Ongoing Costs and Profits
Airbnb hosts don’t enjoy steady income. Bookings may come in waves, and homeowners generally charge different prices depending on whether it’s high- or low-season.
A portion of the profits (about 10%-15%) will be put towards repairs or replacements on broken or damaged items. Renting out rooms or the entire home will undoubtedly put extra wear and tear on furnishings, flooring and decor.
Many homeowners also underestimate the importance of their location. Profitability is largely dependent on whether your home is in a desirable location.
In addition to renting out their spaces, homeowners are also realizing the potential of hosting experiences.
Airbnb Experiences is a tour-guide service offered by the platform. It connects guests to locals who are highly knowledgeable in regards to local activities, and can provide one-of-a-kind experiences to guests.
Filed under: Life