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Airbnb Experiment Update #1

It’s been a month since we started our crazy Airbnb experiment. Time for an update!

Booked income so far

We ended up with three guests our first month, including a 26 night stay that went into February. While the nightly revenue is lower for the longer stay, it does show the trade-off between high pricing with high turnover and a longer stay at a lower rate. Not having to clean the bathroom constantly has been nice. Our payout for January was $1,141.30.

Airbnb pays out the full amount once the guest checks in, so our January numbers are overstated with a week’s worth of February nights. Subtracting the partial February stay nights and Denver lodger’s tax we collected, our actual January revenue was 530.22+129.98+174.60=$834.80. This worked out to revenue of $32/night.

A great first month, particularly for the off season! We estimate $600-1000 will be our range for most months.

Lessons Learned

1. Be Prepared For Guests to Arrive Quickly
We posted the listing on New Year’s Eve and had confirmed bookings by the next day. Airbnb applies extra search consideration to New listings to help them standout. As another boost, we turned on instant booking for most guests as a convenience and to rank higher in the search results. We were also prompted with a “special offer” of 20% off our first three bookings to help get started. We had already priced our listing competitively, but why not give it a shot? It went so well, we had to scramble with last minute Target and Home Depot runs plus a few Amazon Prime shipments, but we were finally all set for our first guests ten minutes before they arrived.

After exploring the various pricing tools, we decided to go with Airbnb’s dynamic pricing model. Set a minimum price and a maximum price, then let it do the rest. It’s not perfect. After a few weeks and two glowing five star reviews, we decided to manually bump up our weekend pricing slightly. We also definitely lost out on extra revenue to early spring break travel planners, which the automated system did not handle well.

2. Make it Easy to Communicate

The Airbnb app makes it very easy to communicate. We spent time writing detailed house rules and a guide book, so we haven’t had many questions. Most revolve around arrival times outside our stated hours or the Denver lodger’s tax, which we collect through the resolution center, rather than raising our rates and having guests pay an artificially higher Airbnb service fee. Supposedly Denver is making progress on integrating its tax into the standard booking process.

You are encouraged to respond quickly to inquiries. Normally that isn’t a problem, but you’d be surprised at the number of late night browsers!

3. Think About Your Calendar Settings

Blocking off important dates in advance is really important.

It’s better to have fewer days listed at first so you have flexibility and don’t end up in town every weekend handling the turnover for a new guest.

If you have a maid service or have a secure way for a self check-in, that’s one thing, but there’s a lot to be said for meeting guests in person for a brief walk through and highlights of the house rules.

4. Other Random Discoveries

Buy an extra set of sheets and towels so the room can turned over quickly in case of laundry mishaps for same-day transitions.

Buy a keypad lock. The added convenience for later check-ins and no lost keys is worth the initial cost in our mind. We have a small lockbox hidden outside as an emergency backup if the batteries die or guests lock the doorknob. That’s happened twice already!

Keep track of your receipts. There are significant tax implications for short-term rentals. You can write off the cost of furnishing the space and consumables like snacks, but you need to have proof.

We’ll have another update next month.

Thinking about hosting for the first time? Sign up for our email list and we’ll send you our room turnover checklist and a special registration link for getting started with Airbnb.

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