A year ago my wife and I decided to turn a recently purchased rental property into an Airbnb. A few of our friends and acquaintances had highly recommended going the Airbnb route instead of turning our home into a traditional rental.
We knew nothing about how to be Airbnb hosts. In fact, we weren’t even experienced Airbnb guests, having only used the service once before.
But with reckless abandon, we began to research what it would take to be successful Airbnb hosts. We read endless blog posts and interviewed current hosts for pointers and ideas.
We tried to apply everything that we had learned. And then we dove in head first and hoped for the best.
It’s been a full year since we took the Airbnb plunge and we’ve learned a lot along the way. If you’re considering turning a rental property into an Airbnb, here are my three biggest takeaways from the past year.
1. Your income potential may be higher
There’s no doubt that we bring in more income per month with Airbnb than we would ever be able to bring in as traditional landlords.
During the winter months, the income is usually double. During the hottest summer months, income can be three to four times what a tenant would pay to rent our home year-round.
That sounds great, but there’s one big caveat that I should note: We happen to live in Daytona Beach, Florida, which is a popular vacation spot.
In a different area, it’s possible that we wouldn’t be able to ask as much per night for our house. It’s also possible that our house would be booked 50% of every month, as opposed to our average booking rate of 75%.
If you’re considering starting an Airbnb, make sure you do some market research first. Check to see what the average listing price is in your area. And try to get in contact with a local host to find out what they’re bringing in on average.
As we’ll see below, Airbnbs take a lot of work. You don’t want to commit to all the extra effort that an Airbnb will require of you until you’re confident that it will be worth it financially.
2. Your hassle factor will be higher
I’m not going to sugarcoat this. Hosting an Airbnb is a lot of work.
On a daily basis, you need to communicate with potential guests and answer questions from those who have already booked. And the house has to be cleaned in between each stay.
Now you can either do this yourself or pay someone else to take care of these things for you. But either way, “running” an Airbnb is going to cost you time or money.
With a traditional rental, you don’t need to “run” anything. You just collect the check each month. And possibly fix a broken toilet every six months.
But an Airbnb is truly a side job. It requires attention on a weekly (and often daily) basis. Additionally, you’ll be in charge of buying furniture, supplies, and amenities.
And you’ll need to replace things as they get worn down. It’s only been one year and we’ve already had to replace the living room couch and area rug due to wear and tear and spills.
These are things that you’ll want to be aware of and prepared for before you start your Airbnb hosting adventure.
3. Your income will be inconsistent
As a landlord, monthly income is consistent and dependable (as long as you have good tenants).
But with Airbnb, no month is the same. As I mentioned earlier, summer is great in our area, but fall can be rough.
Certain months you may absolutely kill it. And the very next month, you could be checking your phone each day just hoping that a booking will come through.
To prepare for this “up and down” income roller coaster, I recommend saving up part of your extra income during the busy months so that you have a buffer built up for the slow times.
Overall, I’m glad we did it
So do I think that turning our rental property into an Airbnb was a good decision? The short answer: Yes.
But the long answer is if I didn’t live in a tourist area where we can make three times the monthly income of a traditional rental by choosing Airbnb, I’m not sure I would do it.
Hosting an Airbnb is a lot of work and it can take away a lot of your daily freedom.
However, for where we live the income has been fantastic. So much so that we’re willing to live with the extra hassle that comes with it.