How I made $11,604 As An Airbnb Host In 5 Months
5 months ago I launched the Airbnb investment experience. It was completely last minute random decision, I made during the ending phase of renovations for house number 3. I stumbled upon the Airbnb investment model last year traveling back home to Detroit to visit family. I decided to join the sharing economy, and turn my rental property into an Airbnb vacation rental as an experiment to see if I could make more money then I would as a tradition rental. I wanted to know…
- Do Airbnb host make money?
- What kind of occupancy rates would I get?
- Can you make more money as an Airbnb host, than a traditional landlord?
- How much do Airbnb host make?
- How hard is it to be an Airbnb host?
My Airbnb occupancy rate as an Airbnb host
The biggest deterrent about becoming an Airbnb host was a bad occupancy rate. The thought of letting a rental sit on the market not earning a dime concerned me, but thinking about investing in decor and furnishing on top of that, down right scared the crap out of me. Luckily, these fears weren’t necessary.
I want to be completely transparent with this occupancy rate, so its important to note, I also listed my property with Airbnb competitors such as Vrbo and Flipkey. This is something I recommend doing, to ensure the best occupancy rates.
Over the course of the 5 months following my initial launch, I found that on average my home was booked approximately 22 night per month. I’ve had a slow month here and there my slowest month was in August I only booked 15 night(Ouch!) but there have been months I have booked 29+ nights, so it tends to vary per month.
I would say approximately a 75% occupancy rate, I find the majority of my bookings are reserved in the current month, which initially freaked me out a litte, popular months do fill up further in advance, my home is in Clearwater, FL so, our winter season, attracts alot of snow birds, and people who just want to escape the harsh northern winters. As you can see in my airbnb calendar below, I was able to book 28 nights for December. I find people book longer stays in the winter months. As you can see I also had a significant amount of days coming from vrbo as well.
How much did I make as an Airbnb host?
I have a few answers here as an Airbnb host exclusively I grossed $7404, this was Airbnb bookings only.
From Vrbo and Flipkey I earned a combined $4200 gross. So all together in 5 months I grossed $11,604…Woohoo! Let’s break this down.
Lets talk about the expenses, obviously to have a vacation rental, you will have to have the utilities cut on and pay bills. Being the frugal guy I am I want to mention that while renovating this house I had all the lighting converted to LED, for one I like the look of LED Lights, and it saves a lot of money on electric bills. I do this to all my rental properties now, because this is a benefit to my tenants, but its even more beneficial for my vacation rentals to keep the electric bills low.
Also I think its important to note that I live in Florida, so the AC is almost always on. My Electric bill has never been more than $130. Having a Nest thermostat is very helpful with this, so I can make sure the air is off when guest check out, and turned so the house is boiling when guest arrive.
The water Bill never really changes. This is a 1 bathroom home, so the water bill averages $80 a month
Cable, while its not a necessity for your Airbnb rental, I know this is a must when I travel, and everybody needs wifi, so bright house cable charges me $130 a month, this covers cable, wifi internet, and home phone service!
These numbers fluctuate a little bit depending on the amount of bookings, but only by a minor amount. That being said, my bills average around $350ish a month, so in 5 months generated approximately $1,750 in bills.
As an Airbnb host you must also consider house keeping cost. My wife and I currently do the house keeping, our Airbnb cleaning fee is $60, which is what we pay ourselves for cleaning. Yes we pay ourselves, I do this for a few reasons, one because this is separate work, and is time-consuming(turnovers take 2-3 hours) and eventually I plan to outsource the cleaning aspect to make Airbnb hosting closer to passive income, and I want to already be in the habit of separating my cleaning fee, instead of pocketing it and calling it income. In 5 months we hosted 37 guest, which amounted to $2,220 in cleaning fees.
Now that we have the numbers lets do the math $11,604 – $1,750 in bills – $2,220 = $7634 net profit. Score!
Breaking this down even further if we divide this by the 5 months, we made an average of $1526.80 per month off this rental property. This home would normally rent for $800 per month in this area. This is almost double 🙂
How hard is it to be an Airbnb host?
I guess the answer to this question is debatable. The best answer I can give is it depends on the guest. The majority of people who book my home are absolutely the most considerate group of people I have ever met. But there’s a small percentage of guest that are less favorable than others. I’ve had guest need me to come over to show them how to work the television, or help them “get the cable working”. I’ve had guest request appliances.
I’ve had guest leave huge messes, although that is a rare occasion. I mention these things because I think its important to keep them in mind. Having a good deposit amount will provide a decent safety net should you guest, get drunk and accidently punch a hole in your wall.
To be honest, most guest don’t want to ruin your house they just want to have a little fun, to the right is the extent of the mess, I normally have to deal with. I usually come into empty champagne bottles, and beer bottles, its not really a big deal to clean.
Occasionally, a guest stain the carpet, but I find resolve gets out most stains pretty fast!
Other things to consider as an Airbnb host.
A few other observations I have made in my time as an Airbnb host are my initial investment in furnishing the property. I spent $2,000 total on decor and furnishing. I remember cringing spending this money when I first started out. The extra $700+ I averaged per month covered this cost in under 3 months.
Most of the Airbnb guest fit into 1 of 3 categories.
- Family Vacationer – These people are coming in large groups, usually with children. They are in town to do family oriented activities. They usually leave your house in good condition but the leave some minor messes
- Business Travelers – These are mt favorite travelers, they come to town for business related matters. They spend the majority of the day, away from the home and return tired and just want to relax. Because they spend so much time away, the house is very usually very clean when they checkout.
- BFF Vacationers – These are the best friends who plan trips together, sometimes they come into town for an event or just to explore the city. Either way they generally leave the biggest mess. I often come to find large amounts empty liquor bottles, and unwashed dishes.
I spent $2,000 total on decor and furnishing. I remember cringing spending this money when I first started out. The extra $700+ I averaged per month covered this cost in under 3 months.
I plan to eventually expand my Airbnb business. I’m hoping to buy more properties with the purpose of renting them out on Airbnb. I also am highly considering remodeling house #1 into an Airbnb rental, but I want to see how this first house works out before I go to crazy with the expansion.
-Will the market get over saturated?
So far the Airbnb investment experience has been equally pleasant and profitable.
All in all so far I LOVE being an Airbnb host. Because I generally earn close to double the amount of income, I will be able to pay house #3 off earlier than I originally anticipated. I am considering purchasing additional properties to list with Airbnb, even though its by no means passive income, it’s proving to be extremely profitable side hustle. Are you considering becoming an Airbnb host? Click here to earn an EXTRA $50 for hosting your first guest. Do you already a seasoned Airbnb host? How do you feel about Airbnb? Let me know in the comments below?