The Franklin Prosperity Report | October 2022 | By Jill Schildhouse
Looking for yet another way to fight back against inflation? Turning your unused vacation home or vacant rental property — even a spare bedroom — into short-term housing can pay off in spades when you become an Airbnb host. Airbnb started in 2008 during the Great Recession and is holding strong in 2022, as so many people across the country look for ways to earn extra income. According to the company, the typical U.S. host earned over $13,800 in 2021, an increase of 85% over 2019. And the number of new U.S. hosts grew by more than 50% in the second quarter of 2022 compared to the same quarter a year prior. The demand is clearly there, as travelers continue to look for more local and comfortable ways to experience destinations that don’t require relying on pricey hotels that may have reduced staff (thanks to labor shortages) and fewer amenities. Of course, there are a lot of nuances to becoming a successful Airbnb host, and all of those details are not super obvious when you’re first starting out. Instead of making costly rookie mistakes or leaving money on the table, follow this advice from the pros.
Buy Used Furniture
Between the need for frugality when you’re first starting out and the fact that wear and tear is a very real issue with rental properties, skip the new furniture for your Airbnb property, advises Airbnb superhost Carissa Ultsch, director and partner of Full Circle Farms Getaways and Retreats in Ramona, California. (A superhost according to Airbnb is someone who “goes above and beyond their hosting duties to make guests feel especially welcome.”)
Ultsch furnished a six-bedroom, four-bathroom house with a mere $5,000 without sacrificing luxury. Her secret? Shopping Facebook Marketplace, OfferUp, and Craigslist and searching for big name brands. “I search for Restoration Hardware, Crate & Barrel, Pottery Barn, and West Elm and look for high-end furniture that is in mint condition,” says the former director of finance for Marriott.
Invest in Conveniences and Utility Savers
Amenities that provide convenience and cost-savings are certainly worth investing in. For instance, Airbnb superhost Bryce Gruber, who has numerous Side Hustles October 2022 NewsmaxFinance.com 7 large single-family homes in the Catskills, advises installing a keyless entry system because it’s a timesaver for both the host and guest.
“What happens if they lose their hard key and you don’t have extras?” she asks. “Well, you both end up frustrated, and you’re out $500 in locksmith fees.” Gruber also recommends using a lockbox to lock your thermostat. “I’m always happy to adjust temperatures for guests, but sometimes they get pushy, and in the middle of winter throw the thermostat up to 86 or in summer down to 60,” she explains. “This can break the heating and cooling systems and cost tens of thousands of dollars in damage.”
Similarly, she says solar panels or roof tiles will help save on utility bills because guests often don’t turn off light switches or appliances with the same care they’d use at home.
Pay for Improvements With Your Profits
Many would-be Airbnb hosts have a preconceived notion that their property needs to be perfect before they can start accepting bookings. Ultsch disagrees with that philosophy and urges new hosts not to invest heavily upfront to avoid the risk of burying themselves in debt.
“As long as your house is intact, comfortable, and clean, you can get started,” she says, explaining that cosmetic improvements should come later. “We took the first year’s income and reinvested it in the house, remodeling anything that I wasn’t 100% happy with. It’s a tax write-off as you build income and equity.” Plus, once you make improvements, you can raise your rates accordingly.
Keep Your Pricing Fluid and Adjust Often
To decide how to price your property, Ultsch says it’s crucial to study other listings in your area and know your market. When first starting out, even if it’s a luxury home, you’ll need to keep prices lower to attract guests and reviews. But once you start getting rave reviews and/or make some improvements, you can begin to raise your rates.
“When we first started in 2017, our high price was $500 a night, and now we’re at $1,600 a night,” she says. “We literally tripled our income.” But pricing is not set in stone, as the market fluctuates. Ultsch tweaks the pricing of her listings almost daily to keep up with the Airbnb algorithm, but also adjusts based on the season. In the summer, she’ll make about $50,000 a month, but in the winter it’s closer to $25,000.
Make Your Listings Pop
Photos are everything when it comes to making an Airbnb listing that attracts guests, so don’t skimp here. It’s OK to snap your own photos initially to save money, but Ultsch says to upgrade to a professional photographer as soon as possible because they will make your property look even more appealing.
“I also play with the order of the photos depending on the season,” she says. “In summer, I put my pool photos and outside photos at the top of the listing, and in the fall, I bump up a really captivating photo of people roasting marshmallows at our outdoor firepit and pics of our steamy hot tub under the stars.”
You don’t need to hire models for these lifestyle images, just enlist the help of your friends or family (pets are great, too!).
Finally, for the copy in the listing, study other successful listings and borrow some applicable language from them. Just be sure to personalize it so it fits your property and sounds unique.