With so many people after long term wealth and residual income, it’s no surprise that Airbnb has become a go-to for the average person to generate some passive revenue. Although it seems simple at face value, it actually entails quite a bit more work than one might think. As an owner of a three unit Airbnb on over three acres of land, I can tell you there is a lot you should know before jumping into this type of investment.
Below is a short list of things to be mindful of when looking for that perfect Airbnb. Hopefully this will help you streamline those speed bumps you might encounter along the way.
When we set out to find a short term rental property, we started with a wide spread search of desert cities and eventually narrowed in over the course of a few weeks, checking out each of these locations first hand. One by one we checked them off the list; some were too remote, others too expensive. Finally we landed in Borrego Springs, and we knew basically nothing about the city, aside from a friend’s parents who had recently retired there.
We knew that going into this we would need a partner who knew how to build and/or work on things, given the remote location of this city and lack of laborers. So, we partnered up on the purchase with a friend who is a furniture builder and handy with physical labor. Aside from our partner, we knew we also had our current handyman in our home town of Long Beach, willing to make the two and a half hour trek for overnight work stays when necessary. Over the course of the past three years, we’ve built cow feeder jacuzzi tubs, an above ground 30 foot pool, three backyards with decking and a list of other additions. Below is a link so you can see what a cow feeder jacuzzi looks like and know you have a cool place to stay if you ever find yourself near Borrego Springs…
Now that we have achieved the coveted title of Superhosts, I feel like I am equipped to run through the do’s and don’ts of operating a successful and profitable Airbnb. Below are some basic fundamentals to keep in mind.
here’s a list of things you may want to be aware oF:
How far are you from the rental property? We wanted to make sure we were within a two to three hour range from our home, so if there was an emergency, we could get there fast enough if need be. Unless you have someone you can rely on every day (literally every day) within a close radius, we’d advise you take that into account. Our cleaning lady also doubles as our check in help, if someone is having a hard time with the door code, or can’t figure out the jacuzzis, etc. Make sure you or someone you can trust is close to the property.
Close proximity to dining, shopping, gas. Borrego Springs has two gas stations, two grocery stores and zero stop lights, so prior to every check in, all guests get an intro message reminding them, there is no Target, Walmart or any type of big box store within striking distance. This IS the middle of nowhere. By setting that expectation early on, it avoids poor reviews and saves you from handholding guests who aren’t happy because they didn’t look into it ahead of time.
Cost of utilities. This is definitely something you need to be aware of. For us, water is extremely expensive being in the middle of a desert. Everything also runs on propane, which is stored in giant tanks we pay for to be filled annually, so the cost of utilities is higher than your average location. Make sure you do your research.
Labor and trust is a huge piece of this. When we started, we knew no one other than the tradespeople the previous owner had working there. We quickly learned they sucked, so we had to go into town and ask around if anyone knew a cleaning person and a landscaper to maintain our grounds. Luckily, all three cleaners in town know each other and worked together. We made sure to walk them through exactly what we want done and how we want it done, rather than letting them do their own thing to avoid confusion and inconsistencies down the road.
Consider the fees from vacation rental sites. Hosting on a site like Airbnb seems simple and very rewarding. Well, kind of. Every month the Airbnb app will show you your “earned income.” It’s a gross number which doesn’t account for the cleaning fees and Airbnb’s own cut. So, when you see you made $10,000 for the month, you may only end up with netting $6500. This is what we have left to pay our monthly bills, plus 20% of our gross pay goes to the person who handles the app for all guests.
There’s always issues. At any given time you can get a call and request from one of the guests with some sort of problem. If you have someone really on top of it, this can become a full time job. It also dictates how the guests will review you at the end of their stay. Fortunately, we have someone awesome running our place, but if their questions fall on deaf ears, that review gets nasty pretty quick.
The reviews. Apps like Airbnb dictate your ranking and searchability by your overall review ratings. If you make it to a Superhost status, you’re on top of the list when people search your area. That entails multiple quarterly Airbnb staff reviews of your ratings, where you must maintain 4.5 stars consistently. All three of our units are Superhosts, which takes a ton of energy and time, especially when guests can’t figure out how to work the wifi or feel entitled to a blender that you don’t have for them…
Make it easy on your guests. Having a book/video of “how to” instructions will save you a ton of energy and headaches. This will also give you some backing when guests have issues that they didn’t read in the welcome text, in the book at the property, or perhaps didn’t watch the tutorial on how the front lock works. Try to make it as “idiot proof” as possible. You’d be surprised what people can’t figure out on their own, which always leads to a midnight message from them.
Consider your minimum night requirements. We always set our stays to a minimum of two nights, except for friends and family. This makes the most sense for efficiency and payout. This will be specific to your Airbnb.
Be mindful of the comps. Keep in mind what other hosts are charging in the area and try to be realistic in price with your competitors.
No cell phone photos allowed. Make sure your photos are dynamic and the marketing is on point. Have a binder with the check-in info at the property, and include your instagram handle and any other handles you’d like them to follow and promote. This will allow them to tag you throughout their stay, making your place known to their followers.
Hope this was helpful and if you have any additional questions, connect with me here.