The Mortgage that Pays Itself: What You Need to Know to Get Started Hosting on Airbnb

published Feb 23, 2018
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(Image credit: David Telford)

If you have any extra space in your home — a spare bedroom, guest house, a finished garage — chances are you’ve toyed with the idea of listing it on Airbnb. Pros: extra money for bills or savings, a fun way to meet cool people, and not a lot of real work. Cons: the potential for weirdos in your space, property damage, and near-constant mental labor in the form of requests and bookings.

I’ve been running an Airbnb in my guest house in downtown Albuquerque, New Mexico for the last few months. On the whole, it’s been a pretty great experience — and we do make almost enough to clear our mortgage! — but there are always lessons learned.

My advice for people who are considering opening their own Airbnb is to ask yourself a few questions…

(Image credit: Sheena Armstrong)

What space can you offer for your Airbnb?

There are so many options for the type of space you can offer on Airbnb — your own spare room, a vintage Airstream parked in your backyard, a mother-in-law apartment…the list goes on. The first thing to do is to consider what space you have to offer and how often you’ll open your space. Will it be open all the time? Just on weekends? Only when you’re in town — or only when you’re out of town? This will help you get a better idea of how much money you have the potential to make and how much time you’ll be spending communicating with guests.

If you have a dedicated separate space (like the one my husband and I operate), your potential for income will be much bigger. But if you just want to make a little side cash for a vacation fund, opening just on holidays or weekends might be fine for you.

Another option is offering your own space in your absence. This option has some additional risks (all your stuff is out there for people to break, damage, or steal, for example), but is a good way to make a little extra money when you travel.

(Image credit: Alicia Macias)

How much do you want to interact with guests?

My Airbnb is a separate building that shares our backyard. It has a keypad so people can come and go as they please. Most of the time, we don’t even see guests — if we do, we wave and say hi, but usually don’t interact too much. We like it that way and guests seem to, too — but it won’t be the ideal situation for everyone.

Some people who host on Airbnb really enjoy guest interaction. Others just want to be left alone. There’s no right or wrong way to do guest interaction, but you should decide what you think might work for you beforehand and make it clear in your listing. I once had a guest who expected that I would greet her (which I didn’t; as I said before, my Airbnb is a separate space with self-check in) so she docked me for that in the review. Obviously, I immediately edited my listing to make it super clear that my space is self-check in.

Over time, you may find you like sitting down to an early morning coffee with guests or chatting with them about the best restaurants in your city. Be flexible and open to your relationship with guests changing.

(Image credit: Aimée Mazzenga)

How secure do you want to be?

If you’re sharing your home with Airbnbers, will they have access when you’re not there? Will you give out keys? Will they have access to the whole run of your property or just certain areas? Security of your space and belongings is a huge concern when hosting. Sure, most people are honest and considerate — but you’ve also got to protect yourself against those that aren’t.

Most dedicated Airbnb spaces work the best when there’s a keypad or lockbox, so people can check themselves in and out when it makes sense. Some hosts even have security cameras at the entrance of their space — if you go that route, disclose it in your listing so no one is surprised that they’re being surveilled.

(Image credit: Diana Liang)

How much money do you want to spend?

Airbnb spaces range from the ridiculously elaborate to the downright austere. You can truly spend as much or as little as you want outfitting the space, from buying everything new to thrifting or using items you already have.

The more amenities you offer, the more expensive your setup and maintenance costs are going to be. Consider what you want to offer in terms of toiletries, linens, and extras (like bicycles, bottles of wine on arrival or optional guided tours of your city). If things are tight at first, you might choose Folgers and a drip machine over a Keurig, at least until you’re regularly booking guests. I have found that I need to budget for new washcloths each month, as guests continually stain mine when they remove their makeup. A small budget item, but something that’s been a bit surprising over the course of hosting.

Make sure you carefully calculate all of your expenses, including supplies, cleaning, rent, insurance and more to ensure you’re charging enough to actually make a profit. Research other Airbnbs in your area (including your immediate neighborhood, not just in your city or town) and see what they charge on weeknights, weekends, and holidays, including yearly festivals or conferences. You’ll want to follow trends carefully and be ready to adjust prices often. I’ve found the pricing that the Airbnb website suggests to its hosts is often low when compared to nearby listings and could actually have you losing money.

You’ll also have to research hotel and tax codes in your city, state, or municipality. In some areas, Airbnb will remit taxes for you. Make sure you really understand what your legal and financial obligations are in running an Airbnb so you’re not surprised at tax time. Airbnb offers hosts up to $1 million in automatic insurance protection, but you can also consider additional insurance through the company itself or other separate options.

(Image credit: Nancy Mitchell)

When should you get professional?

Photos? Yes. Cleaning? Maybe. Having clear, bright and professional-looking photos is a must on Airbnb. If people can’t see your listing well or if it looks dark and dank, they’re not going to book. Period. So do shell out for good-quality photos taken with a DSLR (not an iPhone!). You can hire a local photographer, a friend who knows their way around a camera, or take advantage of the professional photo service that Airbnb offers to hosts. No matter what you do, you must make sure your photos are killer.

Cleanliness is also absolutely imperative on Airbnb, especially if you want to keep those five star ratings. Think about how and when the cleaning will be done for your new Airbnb space. Many hosts will do the cleaning themselves, but your own time and labor will be another factor to consider as you look at the big picture of hosting. Is it worth it to do the daily maintenance yourself or would you prefer to outsource?

I have my unit professionally deep-cleaned once a month, which makes it easier for me to do the day-to-day. Other hosts (likely those with spaces outside of their own homes) use a cleaning company or dedicated cleaning staff. Professional cleaning, of course, cuts into your bottom line — but it may be worth it for you and your space.

No matter what you decide is the right space, budget, and level of commitment for your new Airbnb adventure, stay flexible and open-minded as you get things going. You’ll definitely make some mistakes: things will get awkward, people will be weird, and some stuff will be damaged. But as you figure out what works for you and your space, hosting on Airbnb will get easier. And chances are that extra cash will make it all feel worth it.