Landlord + AirBnb - investment versus payoff?
Real Estate Agent · Fort Myers, FL · Member since 2020 · 32 posts · 9 votes
Hi all. I’m a property manager by day (so wish I could type out a cool superhero gig), and I rent my house to two roommates who pay my mortgage plus additional Cashflow. I need your help please!
Do you have experience in Airbnb? Is that the best method of renting out a shed about 200sf, and what type of experience do you have with it? Do you typically have people book for ...x days, weeks? My home and shed (not fixed up yet, so also part of the question is how quickly I should prioritize the build out) are located near the EdisonFord Estates in gulf side Fort Myers SWFL.
How much time does it take to run a successful Airbnb? Again is that the best method for renting it out, or VRBO? What types of food/items/amenities do you provide - Netflix, Cable, microwave, stove, cups, silverware, toothpaste etc the list can be exhausting.
@Matt Oberski
From my experiences -
1) Superhost
2) Ratings / Reviews
3) Amenities
4) distance from city center
5) price
When launching an airbnb i think of it like an airplane taking off. You need to hit the gas as hard and gain speed before you run out of runway. You do this by :
A) setting up the airbnb up front. I dont want to have to add stuff later. Exceeding guest expectations is the name of the game.
B) having a median rental price with the 20% discount for the first booking. (I don't try to make money at first - I try to get good reviews).
C) Have the best looking/ best photos of any listing in the area. Im lucky to be married to an iPhone genius. Her photos look straight out of home and garden.
Once you are in the air (to stay with the metaphor) and at a decent cruising altitude of 10-15 five star reviews- now you raise your rates a little and start to pay off the accrued debt from furnishing the place.
Many people dislike 1 night stays. I love them! More fast and easy reviews. The more reviews the more trustworthy your place is.
Get to cruising altitude. Get 5* reviews. Under promise. Over deliver. We have beers and bubble water waiting in the fridge for our guests. We put up a Christmas tree and decorations. Its your anniversary? Hand written note with a bottle of bubbly on ice waiting for you.
Other places have in their listing "bottle of wine waiting for you". Its tacky. Not the gifting of the bottle - but the fact that people are making a big deal of it.
Thats my 2 cents. I'm sure many disagree with how we do things but it works well in our market :)
I'm assuming the shed is livable. Such a thing would be perfect for Airbnb. You need to market it with a good hook for best results.
I don't provide any food.
Choose your amenities based on weather you want to create a high end or low end place. But I'd recommend that you start and then upgrade based on your success and user feedback.
Best to you
But I'd recommend that you start and then upgrade based on your success and user feedback.
I agree with everything you said except this. Airbnb gives priority to new listings for a few days when they launch. In my eyes it is extremely important that you get as many bookings as possible during this period. Also - if you start off with bad reviews you will be fighting an uphill battle and HOPING to get the overflow from the fully booked listings.
I agree with your exception.
It really highlights a bigger point that you have to do things to satisfy Airbnb if you want to play their game.
If you know how to get direct bookings, then you are free to do what's best for yourself.
It is possible to start and flourish without Airbnb simply by talking to the business owners in your town who bring in essential workers to supplement their activities.
All you need to do is be bold enough to move your lips.
I help people do this all the time.
@Al Williamson thanks Al. The shed WILL be livable, with AC, full bath, living room, bedroom, plus I’m planning on a microwave, coffee stuff... when you say start and see the results, at what point to I change up my marketing and modeling to upgrade it to potentially ‘higher end’?
@Kyle Parks is there an algorithm for Airbnb like most things these days?
@Al Williamson great advice. I’m certainly not shy, and I’ve seen a couple options - I live near a hospital, so with nurses etc could go that way for long term rentals potentially
@Matt Oberski it takes a minute to earn a good reputation. You’ll know it once you’ve arrive.
I coach people to focus on paying back their initial start up cost AND then reinvesting in upgrades. Otherwise you may fool yourself into thinking you’re profitable before you really are.
So focus on marketing hi numerous what means. Let the world know about what you’re offering. Go far far far beyond Airbnb. And you’ll do just fine.
@Matt Oberski
From my experiences -
1) Superhost
2) Ratings / Reviews
3) Amenities
4) distance from city center
5) price
When launching an airbnb i think of it like an airplane taking off. You need to hit the gas as hard and gain speed before you run out of runway. You do this by :
A) setting up the airbnb up front. I dont want to have to add stuff later. Exceeding guest expectations is the name of the game.
B) having a median rental price with the 20% discount for the first booking. (I don't try to make money at first - I try to get good reviews).
C) Have the best looking/ best photos of any listing in the area. Im lucky to be married to an iPhone genius. Her photos look straight out of home and garden.
Once you are in the air (to stay with the metaphor) and at a decent cruising altitude of 10-15 five star reviews- now you raise your rates a little and start to pay off the accrued debt from furnishing the place.
Many people dislike 1 night stays. I love them! More fast and easy reviews. The more reviews the more trustworthy your place is.
Get to cruising altitude. Get 5* reviews. Under promise. Over deliver. We have beers and bubble water waiting in the fridge for our guests. We put up a Christmas tree and decorations. Its your anniversary? Hand written note with a bottle of bubbly on ice waiting for you.
Other places have in their listing "bottle of wine waiting for you". Its tacky. Not the gifting of the bottle - but the fact that people are making a big deal of it.
Thats my 2 cents. I'm sure many disagree with how we do things but it works well in our market :)
@Matt Oberski
Also to more directly answer your original question
Always have more settings than possible guests. 6 table settings for 4 people. We have netflix, hulu, Disney plus, espn plus and HBO. Disney hulu and espn are currently bundled for like 8 bucks a month.
- q tips
- makeup remover pads
- womens hygiene products (pads tampons)
- Himalayan salt
- pepper grinder
- olive oil
- extra tp
- pack and play
- coffee from our local shop
- tea from our local shop
- beer from our local shop
- shampoo, conditioner, body wash, hand soap and dish soap all from our local refill shop.
I'm sure there is stuff I missed. We are all about local. People are pretty pumped that we don't have FOLGERS and head and shoulders. Or that we throw our guests beers. When I'm done driving 4 hours or so I want to chill and drink a beer.
Anyways I'm done ranting if you have any questions ping me :)
@Matt Oberski
Alright here’s my two cents, get ready for it.
I’m usually a lurker on here but AirBnB has become a passion of mine and I’ve accumulated a few now so I think I can say my two cents are actually worth two cents!
Your main priority, as stated in other posts, is to get yourself a good number of bookings and reviews. How do you do this? Well what I’ve found is that when you first put a listing up AirBnB is going to give you priority anyway, on top of that they will ask if you want to give a coupon for the first few listings (I believe it’s still the first 3) to keep you competitive. This will help in exposure, but your listing needs to be really filled out and your pricing needs to be under market. It sounds like you are renting a back shed out so I’m sure you can afford an under market price for a bit to get your place seen and booked.
As far as getting your listing done, there are definitely things you can do to help the AirBnB algorithm, and usually that means usually all the available space in each category. For example, AirBnB gives a Max of 500 characters in the property description section, and although you don’t have to use it all, 480 characters and above gives you the best possible chance in the algorithm. There are plenty of other tricks that I could provide if you wanted it but that’s the main thing on the listing.
Pricing. DO NOT USE SMART PRICING. This is provided by AirBnB to help you out but it ends up being a bigger pain the the butt.
There are definitely services you can use that will help you create a pricing strategy, I.E. usewheelhouse.com . I used them for a bit until I figured out how to price things out myself, but I felt it was definitely worth their fee as it increased my bookings.
There’s plenty of other things I could add but I’d be here all day. Let me know if you have any other questions, I’d love to help!
Bonus!:
There is something to be said about under promising and over delivering. Let’s say you over promise in a listing and provide cool amenities such as wine, decorations during holidays etc etc. Your guests will now be expecting that and if it’s not perfect they will feel underwhelmed about the property (trust me I’ve gone through this). So instead just wow them with things that they didn’t expect, your ratings will definitely reflect it.
Also, instead of paying for all these streaming services, just buy a ROKU. Its like $40 and no monthly for you. It has a guest mode that lets everyone sign into their own streaming service and comes with Sling TV and other free tv services that they can watch. Plus, people don’t watch as much TV in hotels and Airbnb’s as we think they do.
@Matt Oberski
From my experiences -
1) Superhost
2) Ratings / Reviews
3) Amenities
4) distance from city center
5) price
When launching an airbnb i think of it like an airplane taking off. You need to hit the gas as hard and gain speed before you run out of runway. You do this by :
A) setting up the airbnb up front. I dont want to have to add stuff later. Exceeding guest expectations is the name of the game.
B) having a median rental price with the 20% discount for the first booking. (I don't try to make money at first - I try to get good reviews).
C) Have the best looking/ best photos of any listing in the area. Im lucky to be married to an iPhone genius. Her photos look straight out of home and garden.
Once you are in the air (to stay with the metaphor) and at a decent cruising altitude of 10-15 five star reviews- now you raise your rates a little and start to pay off the accrued debt from furnishing the place.
Many people dislike 1 night stays. I love them! More fast and easy reviews. The more reviews the more trustworthy your place is.
Get to cruising altitude. Get 5* reviews. Under promise. Over deliver. We have beers and bubble water waiting in the fridge for our guests. We put up a Christmas tree and decorations. Its your anniversary? Hand written note with a bottle of bubbly on ice waiting for you.
Other places have in their listing "bottle of wine waiting for you". Its tacky. Not the gifting of the bottle - but the fact that people are making a big deal of it.
Thats my 2 cents. I'm sure many disagree with how we do things but it works well in our market :)
Great advice. We are newer to AirBNB, just starting in September. We just got Superhost status. Early on we allowed one day stays, but found people would stay one day in the middle of the week and it just created smaller windows for other stays. We switched to two days and love it. Do you have a maximum stay? We had a 30 day stay booked and thought it was great, then they cancelled three days before! In general we saw about a third of our guests cancel, so we now switched away from flexible. What cancellation policy do you use? What type of discounts do you offer for weekly or monthly stays (or do you not even allow longer stays)?
@Onan Dumas
Dumb auto correct! I meant to say ..”usually that means USING* all the available space!”
@Joe Splitrock
Joe,
We apply discounts on a case by case basis. Mostly for returning guests. We also switched away from moderate to strict. Got tired of the people who booked 3 months prior and all the sudden realized that there is a pandemic going on.
We still do 1 night stays but in ohio we get tons of drive through traffic- id imagine your market is very different.
We have our units set for 14 day max stay and are pretty firm on it (returning guests can stay longer). I am not in the mood or do I have the mental capacity to deal with any covid related eviction stuff. Also - the people who have wanted to book for lets say 2 months would end up with us leaving ALOT of money on the table.
We are fortunate to be 100% booked for the last year. January is the first month since we started were we are not 80% booked the month prior.
@Joe Splitrock
Joe,
We apply discounts on a case by case basis. Mostly for returning guests. We also switched away from moderate to strict. Got tired of the people who booked 3 months prior and all the sudden realized that there is a pandemic going on.
We still do 1 night stays but in ohio we get tons of drive through traffic- id imagine your market is very different.
We have our units set for 14 day max stay and are pretty firm on it (returning guests can stay longer). I am not in the mood or do I have the mental capacity to deal with any covid related eviction stuff. Also - the people who have wanted to book for lets say 2 months would end up with us leaving ALOT of money on the table.
We are fortunate to be 100% booked for the last year. January is the first month since we started were we are not 80% booked the month prior.
We had a decent amount of one night stays, it just seemed like it broke up longer stays. I wish there was a way you could mark which days you wanted to allow one night stay. That is amazing being 100% booked for the year. We would have been close if it wasn't for cancellations.
@Joe Splitrock
Joe, have you tinkered with the pricing to get you higher payouts with less bookings? I have found that when I was booked 100% it meant my prices were too low. Now I’d rather get 280 per night with 50% booking rather than 140 a night with 100% booking in one of my locations.
This reduces utility bills and cleaning fees essentially putting more money in my pocket and also has reduced the amount of time I take risks with a bad guest/destroyed property or other little things such as someone smoking inside the home.
15 stays vs 30 stays with the same payout has just felt so much better for me.
@Al Williamson I appreciate you saying far beyond Airbnb, that was already my plan. What all would you recommend. Websites, flyers, ads?
@Kyle Parks I love the extended metaphor. Under promise over deliver, wise words. And a big YES to the 20% discount for first booking. Just to make sure, you mean first time people stay in your place, right? That’s a great ticket discount, just getting them on the airplane. Thank you!
@Kyle Parks great calls. Love the idea of local - ive got some friends who make soap, others who make kombucha, beer etc, so that’ll be perfect, just get into a side hustle with them for my side hustle.
All the things lol, like you said “overdeliver”. If they don’t need stuff, they likely won’t pull a Ross (Friends reference) and just walk off with it all, plus my lightbulbs and batteries.
@Onan Dumas brilliant. I’ll hit you up later for more tips, thank you!
@Joe Splitrock thanks for bringing up this point of conversation. I’m following, curious about responses!
@Onan Dumas goes back to quality over quantity eh? I was befuddled at first when your breakdowns had the same payout, but then you mentioned utilities. Brilliant!
@Kyle Parks great calls. Love the idea of local - ive got some friends who make soap, others who make kombucha, beer etc, so that’ll be perfect, just get into a side hustle with them for my side hustle.
All the things lol, like you said “overdeliver”. If they don’t need stuff, they likely won’t pull a Ross (Friends reference) and just walk off with it all, plus my lightbulbs and batteries.
When you first go live an airbnb prompt comes up asking if you want to give a 20% discount. Its for the first 3 guests and gives you a search ranking boost. Being a new property also gives you a boost.
having friends that make soap, kombutcha , beer , ect is a pretty awesome way to promote them and give your guests a cool experience. Id put beers and kombutcha in the fridge. If someone has a longer stay id consider giving them a bar of soap as a gift (having it in the bathroom will end with alot of waste) as I use liquid soap throughout the house.
I don't own a STR, but I stay in them whenever I travel so I can offer you some perspective from the traveler's side of things. I often work when I'm traveling, so reliable wifi is a MUST. If the reviews say wifi was spotty, I'll pass. I look for reviews that say the bed was comfy, so don't cheap out on the mattress. I know this is somewhat subjective, but too many complaints on a particular site and I'll look for another option because there's nothing worse than a bad night's sleep. I also look for a place with comfortable living room seating and enough seating to accommodate the # of people the place will handle. For example, I often see futons in the living room - those are never comfortable - so that's a pass. Or a loveseat and an arm chair for a house that accommodates 6 people. Again, pass. When you're in the house, you want a comfortable spot to chill so seating does matter. If the house has a full kitchen, have it well stocked. You don't need every kitchen gadget, but make sure you don't leave out common items that are a pain if you don't have them like spatulas, a whisk, cheese grater, potato peeler and for the love of God don't forget a wine bottle opener! I never expect any food - with dietary restrictions and preferences it's hard to find something that's universal, though a couple of granola bars or some cookies are a nice treat and can come in handy for travelers with small children who arrive hangry. A stash of tea bags or coffee is much appreciated by most travelers and is kind of a bare bones minimum. I don't expect any toiletries, but owners often save shampoo that someone else accidentally left behind and that can come in handy in case you forgot yours, which happens a lot. And, as a female, I can tell you we really appreciate the thoughtfulness of a small supply of feminine products just in case you get "surprised" in the middle of the night (believe me, it happens.) I hope this helps. Good luck to you!
@Matt Oberski Airbnb can be very profitable; however, when my wife and I tried doing Airbnb, as we were house hacking our first duplex, we realized that the amount of turnover based on our market at the time was just way too much for us.
Sure, we could have got a maid service to do the turnover but then it would be economically viable for us, so we just rented the unit and that made a lot of sense to us.
Classic Real Estate Investing principle: it's all about location, what works in location A may not necessarily work in location B.
Airbnb is of course very location-sensitive and many investors (myself include) underestimate the amount of work involved.
I suggest trying to get your message out through online, offline and social media channels.
Online: Online travel agencies including Airbnb, of course.
Off Line: Create a referral program, talk to local businesses, check the logos on cars in the parking lot of a nearby hotel and contact the HR department of those organizations/businesses.
Social: Creating and growing a YELP, Instagram, and YouTube channel all help a potential direct-booking guest find you and see that you're not a scammer. Create social media to create clues that you are trustworthy.
I coach people to do all three approaches. It helps separate you from the typical Airbnb Super Host who acts if ABB is the only planet in the galaxy.
It also helps you stay 100% booked while others go out of business.