How I earned over $20,000 in less than a year with my Airbnb. Or did I?
Ever thought about using your home as an Airbnb, but not quite sure if it’s for you? Then keep reading.
After being a landlord for a few years, I wanted a break from it. Like many, I heard so many positive stories about how Airbnb was a great side hustle to get into. So, after turning my garage into a large studio, I decided to enter into the land of #Airbnb once the renovations were completed. Before I made the jump, I did some research. This involved looking at properties in my area, to see what they offer along with their pricing.
I already knew reviews on Airbnb were like cash. So I knew I had to form a strategy on the best way to enter the business. I decided on using a low pricing model, to build up my reviews and gain consistent bookings in order to get to Super Host level. Getting to this level will allow me to be on the first page and my property will be viewed more. This strategy worked. I received positive reviews and obtained Superhost status within a short period of time. Throughout this time, I was slowly increasing my price. Particularly within the peak months, that being the summer months and around big holidays such as Cup Match and Carnival.
Included in this strategy, I used the 4 P’s of Marketing:
Place: My Airbnb was centrally located and near a grocery store;
Product: Apartment was well designed, and recently renovated;
Price: entered the market with a low pricing strategy; and
Promotion: received continuous positive reviews, obtained Superhost status which elevated my listing to the first page, based on visitors’ filtered results and used social media.
Using these tactics helped me earn over $20,000 in sales in less than a year. Like many who were operating vacation homes, it would have been more, however, I had quite a few cancellations due to the pandemic. Although I had cancellations, I was still consistently booked as students came home and needed somewhere to study. With all that said, as great as the extra income was, some people do not realize the amount work that goes into operating an Airbnb. There are some things that homeowners should consider before entering into this business.
When operating a business, it’s important to keep a log of expenses. An Airbnb unit is no different. For Airbnb’s, this can include, purchasing supplies, paying cleaners, utility bills, providing gifts and possibly paying the person that operates the unit for the homeowner. Outside of the monetary payouts, if the owner is operating the unit, their time should be factored in as well. Owners also have to deal with questions from guests or deal with guests that arrive late due to flight delays.
Therefore, did I really earn over $24,000 operating my unit? The answer is no. When I factored in the time I put into the unit, which included the expenses mentioned above and time invested, I decided it just wasn’t worth it. Although I could have raised the price to get a larger profit, it’s only so high I can go. When I calculated the potential profit margins in comparison to placing my apartment on the local market, renting it out full-time was a better option. I wouldn’t have to buy supplies or pay for utilities for the apartment, or act as a host and be in continuous contact with guests that had questions. In addition to that, there is no guarantee I would make the same amount each year. Most importantly, we are now living in pandemic.
Anyone looking to enter the market because they want an easy buck, I would say, it’s not as easy as some may think. Although I really liked meeting guests, the time it takes to run an Airbnb became a bit much. Especially when you have a new born baby. On the brighter side, Airbnb’s are highly flexible. If you are a person that wants to travel or are leaving for school and you want to live in your home when you return, this is a good option. Airbnb allows you to block out dates. Even if you have a spare bedroom and are in need of extra cash, this is also an option. However, due to the pandemic, I wouldn’t recommend this.
Although I no longer operate my Airbnb, I couldn’t completely leave the business alone. The vacation rental market gave me insight into how I can assist hosts by creating templates.
These templates help save lots of time for Airbnb hosts, which allows them to focus more on operating their business. The templates include, guests welcome book templates and various signs. Take a look by visiting: www.droppinganchorbda.com/digital-prints.