{"id":1458,"date":"2016-04-25T08:00:18","date_gmt":"2016-04-25T13:00:18","guid":{"rendered":"http:\/\/www.investmentzen.com\/blog\/?p=1458"},"modified":"2022-10-28T09:04:41","modified_gmt":"2022-10-28T13:04:41","slug":"how-i-make-money-as-an-airbnb-host","status":"publish","type":"post","link":"https:\/\/www.investmentzen.com\/blog\/how-i-make-money-as-an-airbnb-host","title":{"rendered":"An Inside Look At How I Make Money As An AirBnB Host"},"content":{"rendered":"

I<\/span> have never been very attached to material things, including my house. Over a decade ago, I signed a lease for a three bed apartment and quickly took in roommates, as well as travellers who paid by the week. When I would leave for a holiday, I\u2019d try to find someone to sleep in my bed and pay my rent.<\/strong><\/p>\n

So when Airbnb launched, naturally I was one of the early adopters.<\/p>\n

Now that I have relocated to Guatemala<\/a> and bought a little house in a tropical paradise, I have turned my house into a more formal guest house.<\/p>\n

I only have four rooms, but can host up to 8 people, and I have a private beach, which is a great selling point. I am located 20 miles away from Flores, a lovely colonial island in Northern Guatemala, and 30 miles away from the UNESCO World Heritage site of Tikal and its impressive Maya ruins.<\/p>\n

\"sunset<\/p>\n

Airbnb\u2019s calculator<\/a> estimates how much you can earn if you put your place up for rent. According to their calculation, I could make between $250 and $500 a week, so I thought it would be pretty easy to turn the place into a cash machine. There is even an Airbnb analytics<\/a> that could even help me see insights once I open up a place for rental.<\/p>\n

However, for the first few months, those weekly estimates looked more like my gross income.<\/p>\n

Can Your House Be An Accidental Income Stream?<\/h2>\n

The good thing was, I didn\u2019t buy the place for the sole purpose of becoming an AirBnB host, nor did I owe the bank money, so I could afford to just live there and enjoy my little paradise on my own. I had a few bookings here and there, and with every one, I learned a few things.<\/p>\n

I learned it was a bit complicated for people to come with public transportation. Visiting Tikal was a 10 hour day if you took the bus, while with a car people would leave at 8am and be back for lunch. I looked for a driver to offer guests.<\/p>\n

\"tikal

Tikale main plaza during winter solstice celebrations<\/p><\/div>\n

I learned some people freak out when they are that far away from civilization. I updated my listing to make sure they\u2019d have bullet points about how remote we are, if they were too lazy to read the whole listing.<\/p>\n

Many came without food in spite of my warnings, so I started cooking for them.<\/p>\n

You keep learning as you go, the important thing is to constantly improve.<\/p>\n

My Biggest Challenge As An AirBnB Host<\/h2>\n

But my main problem was being competitive with other guest houses.<\/p>\n

You see, in Guatemala, many people have a housekeeper anyway, so they don\u2019t factor her cost if she is going to wash one extra set of sheets. They have fully paid-for houses (unlike the US where most people have mortgages<\/a>), so the rent they set is not necessarily a factor of the property\u2019s value.<\/p>\n

Most of my neighbors rent their double rooms for $20.<\/p>\n

There is no way I\u2019m doing all that for $20, and my housekeeper would charge $8 to come prepare the room and $8 to wash the sheets. After electricity and water rates, I\u2019m in the red already.<\/p>\n

I value my time, my property, my efforts. Having a guest means answering a ton of emails, making sure the guest gets there, being at home to welcome them, touring the property together, being glued to your phone while they stay, in case of a power outage or a water leak, fixing meals if required, doing a final property check-out and saying goodbye.<\/p>\n

Sometimes it even means shipping them stuff they forgot, which can range from an iPad to a whole suitcase!<\/p>\n

So my basic double rooms are prices at $30, with a minimum of 3 nights. The marginal cost of the following nights is low, people know the house by day one, and less work is involved. I think I am worth the extra 50% since they get a private beach all to themselves.<\/p>\n

\"airbnb

A bedroom in my AirBnB guest house in Guatemala<\/p><\/div>\n

Then I have two luxury rooms, with a comfy queen bed, A\/C and their private bath. They\u2019re priced around $70, with seasonal fluctuations, and you can stay just one night. But if you try to, I will warn you that because my guest house is in a pretty remote location, you shouldn\u2019t, unless you arrive early and enjoy the place the whole day. Most people book two nights.<\/p>\n

But my main source of income is renting the full property. For $150-200 a night, you can book my whole house for your party of up to 8 people. $25pp is reasonable, and few properties around cater for that big a group.<\/p>\n

I lowered my rate from an initial $250 that got me few bookings, and now I have increased my sales dramatically, while scaling down on one room bookings. Win-win for everyone, since my fixed costs are pretty much the same, and people are grateful to find a place where they can be together as a group and enjoy their privacy.<\/p>\n

Plus big groups generally come by car so we don\u2019t have to deal with the public transportation hassle.<\/p>\n

Don’t Be Afraid To Dive In And Figure It Out As You Go Along<\/h2>\n

It took me a while to figure that out, and now things are much better. My income has doubled, and while not huge, it pays for all house related expenses, two staff, taxes and so on. And best of all, I still get to enjoy my little house while I am around.<\/p>\n

Having tried VRBO<\/a>, Homeaway and Booking, Airbnb is by far my preferred platform. It is a great way for me in a remote location to still get visitors, but also keep my occupancy rate is low.<\/p>\n

While I could rent my place long term for around $500 a month, I generate around $1,000 a month with short term rentals<\/a>, and get to use it when it is not booked.<\/p>\n

At $150 a night for the full property, I can make more in 4 nights than I could renting out long term<\/a>. My house costs around $100k, so I am getting close to a 12% return while still getting to enjoy the property most of the time.<\/p>\n

Some of the pros of using Airbnb<\/h2>\n