What To Know Before Starting Airbnb
BY MIKEL HUBBARD
FORMER HGTV PRODUCER | CO-FOUNDER, THE HOST CO |
OWNER, TIMES EIGHT PROPERTY & DESIGN
Thinking about buying a property and renting it out full time? Sounds dreamy, right? Before you dive in with both feet…. here are the five things we wish we knew ahead time. Spoiler alert… the reality of owning an Airbnb far differs from the fantasy!
Imma open an Airbnb and be rich. Well… maybe.#1: Don’t plan on pocketing any profits for a year… or three.
You’ve done your research. You know what your monthly costs are gonna be. ou know about what you should make when compared with other Airbnbs in your area. Um, you could probably like stop working if these numbers are right, right? Wrong. The biggest surprise is that the first year or two or three or more, all your profits wind up going back into the Airbnb. Why? You want to make it better, add more amenities, finish that repair you didn’t get to finish before you started renting… the process to making a good house great comes at a price. And that price is usually your profits.
I can’t wait to use it when it’s not rented. Oh wait, it’s always rented. :(#2: Think it would be nice to have a place for the holidays and weekends when it’s not rented? Spoiler alert: that’s when it’s rented.
Your weekends and your holidays are your bread and butter to making money. Even if you can have them, you generally want the cash more. Often, you could rent something cheaper than your Airbnb for the weekend - so do that! But don’t plan on it being an actual second home. It’s generally a business first and your personal crash pad second.
READ MORE: SHOULD YOU OFFER FRIENDS AND FAMILY DISCOUNTS? HERE’S OUR POLICY.
I love going on vacation, so I’m going to turn it into my job!#3: You might think it’s fun to do projects around the house, but make no mistake, visiting your Airbnb isn’t relaxing. It’s a job.
Here’s the plan: spend a couple days in your Airbnb. Buy some toilet paper. Fix the leaky sink. And then mainly just kick back, relax and enjoy being away from home. NOT!
You may think there’s nothing to do at your vacation rental and then you get there. Oh, why are there crumbs in the silverware drawer? Hmm, the front porch light is out. Does ANYONE pick up their cigarette butts in the yard?!!! Seriously, how is the tv remote missing and no one said anything?
Your cleaner is there for two hours… cleaning, not enjoying the house. Your guests are on vacation, so they’d rather just relax than worry about a burned out lightbulb or a dead remote. It takes spending time in your own home to realize what’s wrong with it, and then the clock is ticking to fix it before you leave. Inevitably, this consumes most of your time when you’re staying at your own Airbnb. Expect to leave your house with a list of projects just as long as the list you arrived with. EVERY TIME.
READ MORE: WHAT WE WISH WE KNEW BEFORE STARTING OUR FIRST AIRBNB
The big money is not in the renting my friends.#4: Don’t expect to get rich off the rentals. Do expect to get rich off the real estate.
Rentals generally don’t make much profit because it’s usually going back into the home or to pay for supplies and repairs. BUT, the equity you create is worth it. Buying in an up-and-coming area, renting it and then using the equity to buy another rental is the name of the game in getting rich off Airbnb.
If you’re making good monthly income, great. But the real prize is the equity at the end of the rainbow.
At the end of the day, I own a pretty kick ass home!#5: Don’t worry too much about the time needed to respond to guests. The correspondence actually integrates fairly easily into normal daily life.
Often, the profits you make are around what you’d pay a property manager so think twice before hiring one. The biggest surprise? The job of talking to renters is a lot easier than you think. Do you get a call about an irrigation pipe flooding the pool at 4am while you’re on vacation in a foreign country? Yes. But only like once... a year. Most of the time, guests are low maintenance and fairly low hassle. After a while, you get so used to handling the requests that it feels like maybe an hour of your WEEK which ain’t that bad at all. And in the end, you’ve got a sweet house to show off to your friends!
What do you wish you knew before buying a property and converting it into an Airbnb? Do tell… in the comments!