Our First Month Making Money With AirBnB

Making money with AirBnB

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We’ve lived in our apartment for just north of two years and have been renovating it ourselves little by little for the same time. It’s not ready for the pages of Architectural Digest yet, but more recently things started to come together in the apartment to the point that we felt ready to start hosting overnight guests. Sure sure, we have hosted family and the occasional very close friends who wouldn’t judge the fact that most of my clothes and shoe collection the construction materials crowded out the master bath, forcing the entire household to rely on the guest bath. But we weren’t in the habit of entertaining like we used to owing to the renovation. Two years in, however, we were ready to live like normal people again, sans jackhammers and Jimmy Choos in the loo. We also thought we were ready to begin making money with AirBnB by hosting out our second bedroom/bathroom. We’d been side hustling for about two years, had made some pocket change, and were ready to take things to the next level.

Making money with airbnb

For those of you under a rock, AirBnB is a online marketplace that acts as a brokerage for property holders to rent out their entire homes or just a room to travelers. Owners (“Hosts”) feature their spaces on AirBnB’s web and mobile platforms and set rental rules and rates, typically for short term bookings, such as vacations. Potential tenants (“Guests”) then request bookings or have the option to book instantly. AirBnB takes a nominal service cut from both the host (3-5%) and the guest (6-12%) once a booking is complete. AirBnB takes care of the financial transaction and ensures that no money passes directly between guest and host. AirBnB has grown exponentially over the past decade since its founding in 2008, and for good reason. With over 150 million users and all-star hosts making AirBnB gives travelers a viable alternative to hotels. Many love the excellent deals they can score in cities known for having expensive lodging. Others believe that AirBnB affords them a more authentic vacation experience, out of tourist traps and with local families.




For hosts, the prospect of making money with AirBnB is an exciting and practical prospect. There are tons of tales on the interwebs of hosts amassing multiple properties and hundreds of thousands, if not millions of dollars in short term rental income with AirBnB. Of course, no investment is without risk, and making money with AirBnB the potential risk is great. First, in many cases you are renting out your own home. In our case, we live in our home (sorry, we aren’t fancy enough to have multiple properties in the Maldives and Positano…yet). That means that you are potentially sharing your space with a stranger. So your space and potentially your self are at risk in inviting randoms into your home. AirBnB touts an “insurance” program called “Host Guarantee”, which supposedly entitles a guest up to $1M for damages caused by guests. But Google quickly reveals just how good, or rather, bad that coverage may be. Given the risk, making money with AirBnB is clearly not for everyone.

Making money with airbnb

Even if you can get over sharing your space with strangers, you still may not be able to host. Like any new industry, AirBnB has faced its share of regulation and legal blocking over the past decade. In NYC, where we are, court battles seeking to protect or banish short term rental platforms have raged on for several years. We weren’t super comfortable hosting when so many issues were unsettled. And we definitely were not comfortable hosting while we were renting. Now that we own our apartment and NYC is at a bit of a “pro”-AirBnB standstill, we feel ok about sharing our space with guests. If you are considering hosting, make sure you read up on the rules not only in your municipality, but also in your building, if you live in an apartment. Things can get very complicated and the last thing you want is to be evicted because you tried making money with AirBnB.

If you are ready to take the jump and host, feel free to keep reading on about our first month making money with AirBnB and sign up to host using our referral link. When we signed up to host, we didn’t know what we were doing so we researched AirBnB tips and tricks. We stumbled across Dany Papineau’s site AirBnB Secrets. This was a great resource for us to get started in short term rental management. We learned about guest amenities (who would have thought to provide guests with a toothbrush or bottled water) and wireless locks. I highly recommend taking Dany’s free email course and signing up for his email list. Tons of great ideas available for free? Sign me up! We also started reading Lily’s AirBnB posts over at The Frugal Gene. She has some great real world advice on the benefits and struggles of being an AirBnB host. There are so many great resources out there to help you make money with AirBnB so please don’t go it alone. Here are just a few of the tips we used:

Take Great Pictures

Making money with airbnb

AirBnB used to offer a free professional photographer service, but that has since gone away.  We missed out so we just used an old Canon Rebel camera to take some pretty decent, but not amazing photos. Even with these semi-pro photos, our listing gets tons of views, especially over some nearby competing properties. Potential guests have their pick of listings, especially if you live in a larger city. It’s important to have clear, well lit photos showing your space in the most attractive light. So make up your bed, open your windows, and stuff your dirty laundry away in a closet. No amount of photoshop will make a dirty or messy home look attractive. If you don’t have a DSLR camera, a good phone camera will do the trick. You may want to use a bit of editing software to lighten and sharpen things as well.


Sign up for Instant-Book

You have the option of manually approving all of your guests or using “Instant-Book”. The day we went live on AirBnB we received our first booking! Instant-Book allowed a guest to–you guessed it–book our space instantaneously. While this feature guaranteed that we could immediately start making money with AirBnB, it unnerved us not to have the ability to vet our potential guests. Thankfully, AirBnB allows a hassle-free cancel option if you choose Instant-Book. You can cancel these bookings for any reason, which gave us peace of mind and wallet knowing that we wouldn’t be hit with any cancellation fees should we feel uncomfortable hosting, or (gulp) forget to update our calendar to block out unavailable dates.


Leave Some Special Touches

Making money with airbnb

Think that you need to host in a palace in the trendiest part of town to make money with AirBnB.  Think again. You can be a successful host in the most modest of homes. We live in a halfway renovated apartment in an up-and-coming neighborhood. We treat our guests, Elliot created a handy guide book and map for our guests. He even customizes the WiFi with each new booking so that the guests can easily remember the code.  We also offer some brand new high quality toiletries and slippers we’ve collected from luxury hotels throughout our adventures around the world. These treats are at no additional cost to us; we are conscious not to use hotel toiletries when we travel so that we can bring them back for our guests to use. We travel a ton for business and pleasure and want to provide our guests with that same concierge experience, almost as if they were staying at a boutique hotel. If a guest is staying more than a couple of nights we take their beverage preferences and give them a bottle of wine or a couple bottles of water. These small tokens have really made a lasting impact with our guests, with some even mentioning the service in their reviews.


Write Prompt and Glowing (but honest) Reviews

Making money with airbnb

AirBnB requires hosts to post reviews within a short prescribed time after the guest checks out. You must leave a public review on a guest’s profile, which will appear to all AirBnB users. You can also give private feedback directly to the guest and to AirBnB. The public review need not be a chapter. A few sentences will do, but they should be specific, and complimentary (if, in fact, a guest has been trouble-free). In the time of Yelp and Twitter, 5* reviews are the norm, and deviations from high ratings could hurt the guest’s ability to book elsewhere. Unless there is an actual problem (blaring music late at night in contravention to house rules and requests/drug use/any destruction to property that hasn’t been compensated), you should give your guest a good rating. Have a guest that stays in her room the entire time and doesn’t want to watch Real Housewives with you? Sorry, she doesn’t deserve 4*. A guest fails to place each of your 9 pillows back in color-coded size order? Don’t dock a star or be a jerk in the comments. You should be commenting on a guest’s treatment of your space and their communications upon check-in and check-out. Compliments that guests are friendly, responsive, neat, and independent make a profile stand out to hosts and guests appreciate them.

Another perk of writing positive reviews: more bookings. I cannot say with absolute certainty, but I also think guests are more likely to book your space if you tend to leave substantive positive feedback. You can easily locate a host’s reviews of past guests and if a host is perceived as difficult to please (oxymoron there huh?), then guests will likely pass, wanting to avoid a potential ding to their AirBnB rating.


Save Your Receipts

A bottle of wine here, a few rolls of toilet paper there. It can all add up and if you want to maximize your dollars and make money with AirBnB, you should learn the tax implications of hosting and how to reduce any tax burden that accompanies your newfound AirBnB income.  (You didn’t think you would get to keep it all, did you?)

There are a ton of resources that can better explain the nuances of tax planning for rental property and AirBnB/temp housing hosts. And they can explain it all much better than we can, especially given the new tax code changes Here are a few links, but you should always seek out tax advice on how to tax advantage your income if you are making money with AirBnB:

Long story short: Things that you buy for your guests and certain improvements to your space may be tax deductible as business expenses. Make sure you do your homework and try to keep or get back more of your AirBnB income. Keeping detailed receipts and records of expenses will help you


Conclusion

All in all going into our fourth month, hosting and making money with AirBnB has been such a positive experience. Not only do we get to be ambassadors for the greatest city in the world to economical travelers, sports fans, and the occasional conventioneer, but we  also get to make a couple of sheckles in the process. It doesn’t hurt to have your ego stroked by reviewers complimenting your interior design acumen and hospitality. Our guests have come from as far as Europe and as close as Brooklyn (take that DUMBO). And they are coming because we offer attentive and personalized service. The devil’s in the details, so whether it’s making sure our bar is stocked with Diet Coke or bone broth (yes, really), or printing out airline tickets,we strive to provide excellent service.

Making money with airbnb

We closed out 2017 making nearly $2,500, not including about $650 in reservations we had to decline in December because of the holidays.  We netted nearly $1,300 in October alone, our very first month making money with AirBnb. This extra income is going to help immensely with wedding and other household expenses, and our path towards FIRE (well, at least the FI). We are so glad we started this journey and are looking forward to hosting more and making money with AirBnB!

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Are you an AirBnB host? Have you ever stayed in an AirBnB or other home share? What are your best tips for making money with AirBnB?

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