I have been intrigued by Airbnb and short term rentals for some time now and would love to become a host in the near future. For me, I prefer Airbnbs to hotels whenever possible. They are often more affordable for the amenities you receive and it gives you a chance to sample the culture that is often missing when you book with a hotel chain.
Luckily for me, I have a few friends who are well versed on the subject and were happy to share their wealth of knowledge! I interviewed two super hosts and have compiled each couples 5 key tips when starting your short term rental business.
Meet the Nestrs:
Sarah and Nick Karakaian own Airbnb rentals in the Grandview Heights area of Columbus and will soon have a renovated Airbnb available for booking in German Village. They are so experienced in this area that they also offer personal consultations for starting your own Airbnb business. Check out all of their services at nestrs.com.
In 2013, Sarah and Nick were living in NYC when a friend asked Sarah if she could help him out and change the bed linens at his apartment to prepare for an Airbnb guest. Sarah changed the bed linens, fluffed the pillows and added waters and a snack to the bedside to welcome the guest. Not only did the guest love it, but Sarah realized that this was the perfect idea for how to utilize the basement on-suite in their new home while leveraging her hospitality skills. Sarah and Nick quickly realized that they could make double the income with short term rentals over a long-term renter.
1. Consider Airbnb’s option of “approving” all guests prior to accepting the booking.
Don’t be scared! The sharing economy is no longer new or taboo. Airbnb is pretty widely accepted now and there are so many ways to get started and work within your own comfort level. Airbnb offers lots of options to ease into this new business with the ability to review and speak to every guest before accepting them and then work your way towards the instant booking feature. If you have a long term rental that you are struggling to rent out or if you have extra space and want to get some extra cash flow, Airbnb is a great place to try out.
2. Utilize management apps like Beyond Pricing to maximize profits and days booked.
There are a few ways to set pricing within your area and Sarah currently leverages a program called Beyond Pricing. This program uses similar tech that hotel search engines use when you want to find the best price on lodging. In an area like Columbus where there are tons of events, utilizing a program like this can save you a ton of time and money. The cost of this service is 1% of your airbnb income each month.
Airbnb offers a smart pricing service but Sarah does not recommend utilizing this and here is why; the goal of Airbnb is to have your space fully rented, which can often lead to underpricing your space to get it fully booked.
3. Don’t shoot for 100% occupancy.
Sarah believes that 80% occupancy each month is the sweet spot for a great rental. If your occupancy is above 80% you are usually not charging enough, and if you have less than 70% occupancy each month you are probably priced too high.
4. Exceed expectations of your guests.
Sarah and Nick go above and beyond with amenities by offering a basket of easily forgotten traveling goodies – toothbrushes, floss, sunscreen, etc. These little gestures help to set them apart from their competition.
5. Create an experience for your guests.
Sarah loves the hosting aspect of owning an Airbnb and really enjoys the business side of managing a mini bed and breakfast. She puts a lot of time and effort into the design and holds her cleaners to high standards. Care about your furnishings and care about anticipating your guests needs.
Bonus: Long-term vs. Short-term Rental
Sarah and Nick rent out a single bedroom Airbnb apartment in Columbus. It has not been renovated but has been cleaned and furnished with a stylish design.
For a long-term rental, this space would probably rent out at about $850/$900 a month. By utilizing Airbnb for a short-term rentals, they make around $1,700/month on the low end and up to $3,000/month on the high end. On average they are charging $80/night and up to $119/night for big events like football games. Once the space is renovated they will be able to charge more for the rental, probably around $100/night on average.
That is a whopping difference of up to $2,100 of additional profit by utilizing short-term rentals.
Meet Sonny & Chelsey:
Chelsey and Sonny Unverferth own a duplex in German Village, Columbus and rent out one side through Airbnb and live in the other. Their Airbnb is consistently rented out and has proven to be a highly profitable business for them.
They originally purchased their duplex with the intention of using the other side as a long term rental. After the property was fully renovated and restored, the community recognized it as a historic property in the German Village. While receiving their plaque, they met a man who lived in the neighborhood and was renting out a single room in his home via Airbnb. He encouraged them to try out Airbnb as it had proven to be a profitable route. They took his advice and within the first month of renting through Airbnb, they realized they could double their income by utilizing the space for short term rentals.
1. Be flexible.
Sonny and Chelsey manage their own pricing. They are always trying to strike a balance between fully occupied and competitive rates (which can sometimes bring undesired clientele). When they first listed their unit on Airbnb, they searched other rentals within the area and tested various rates to find their sweet spot for their average booking price.
Because they live next door and manage most of the cleaning themselves, their occupancy goal is often 100%. To achieve this goal, they are flexible on rates when there are random dates that went unbooked. When this happens they will often lower the rate to try and entice visitors to book with them. Similarly to the Nestrs, Sonny and Chelsey do not recommend the smart pricing tool offered by Airbnb. With the location, amenities and high end furnishings in their rental, they feel that the smart pricing tool often undercuts their profits and they prefer to manage the rates manually to achieve top dollar.
2. Choose your location wisely.
German Village is a unique and historic area of Columbus and is in a central location of the city. Their Airbnb has a close proximity to downtown and is located near many wedding venues. Historic German Village also offers lots of shops within walking distance that appeals to many guests.
3. Take great photos of your rental.
Having an updated space with a modern design helps to set their Airbnb apart from the competition. Photographing the space to highlight these features on Airbnb is SUPER IMPORTANT. This is something small, but Chelsey believes it is important to show photos of the exterior of the home. People want to know what they are getting and it is best to avoid any surprises (unless they are good ones!).
4. Provide additional comforts for your guests.
Sonny and Chelsey pamper their guests. They provide all of the comforts you need and go the extra mile by offering a variety of snacks.
5. Run your business with integrity.
Keep the space clean and be respectful to all of the guests you host. The more Airbnb hosts that run their business with integrity, the more it will help the community. You are giving people an experience and a taste of your neighborhood and its important to take that seriously.
Sonny and Chelsey more involved in community legislation and local government as a result of becoming Airbnb hosts. When Columbus was looking to pass strict regulations on Airbnb hosts, they became involved in city council hearings and wrote letters to legislators. Sarah also became more involved with this issue and even spoke at the hearing. Luckily the strict regulations didn’t pass and they are able to continue offering these great spaces to visitors.