Airbnb... LEARN FROM OUR MISTAKES
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Table of Contents
Airbnb... The Good, The Bad, and The Ugly
We recently bought a townhome that we remodeled and doing an Airbnb. We’ve got quite a few rentals. We’ve always been intrigued by the Airbnbs. I’ve got quite a few clients that have done Airbnbs, so we wanted to do one for ourselves and reveal the good, the bad, the ugly, everything that we’ve learned. We’re going to go through some numbers and just go through a case study.
We’ve already done two videos. You can go watch to get up to speed in terms of where we’re at with this Airbnb. But the big thing for me was that in the summer months, I always thought that we would be completely dead. We wouldn’t have any guests staying there. Everybody that I’ve talked to said that was not the case.
Our goal is that if we could get as close to break even in the summer months, June, July, mid-September, then it would be an absolute home run. Our annual gross income would be about $30,000 to $40,000 more than if we were to do a long-term rental. So we’re giving it a go.
This is going to be a case study that we’re going to do over the course of the year, because it’s going to take some time for the numbers to play out, to really get a good handle on what’s going on. We’re three months into our Airbnb, and I’m going to go over some of the dos and don’ts, things that we’ve learned, tweaks that we’ve made, in order to make it easier for us to manage and for the guests to have a better experience when staying at our Airbnb.
Airbnb Checkout Time
To this point, our biggest challenge has been the checkout time. When people book on Airbnb, it lets them know when the checkout is. For whatever reason, they’re just not paying attention to it. The other thing that we did, and I’m actually going to do a better job in a couple different ways, and I’ll explain, is that we created … On Etsy, I found a place where we could get house rules. Within the house rules, I’ve got the checkout time on there. But for whatever reason, people aren’t seeing it. They’re asking, “When’s checkout,” and/or they’re not checking out on time.
We had a same-day turnover last week, and the cleaning service was showing up at 11:15, and the guests were not out of the property yet. So it created a little bit of stress and scrambling, just because we had people coming in. The check-in time is 3:00. So if I can give any advice, it’s making sure that your guests know when checkout is. We’re going to get another sign on the entryway that’s that’s pretty big, that specifically says, “Checkout at 11:00 a.m.,” just so people know. But if I give you any advice, and probably our biggest challenge, that has been it to this point.
The other thing that we’ve done, too, is for the Wi-Fi, we got a little stand with the Wi-Fi, so they know what the code is. Both the house rules and the Wi-Fi sit on the desk. That’s made things a little bit easier, but we need to do a better job when it comes to the checkout time, especially for same-day turnovers. If it’s not a same-day turnover, probably not the end of the world. But again, if you’ve got a same-day turnover, doing the linens and the changeover and everything, I mean, it can take three to four hours to get everything done. It can be a little bit stressful if they’re not getting out on time, especially if your cleaning service is showing up right when they’re getting out.
Check out this blog post as to how we are dealing with our Airbnb Checkout Time: CLICK HERE
Making It Easier For Guest and Managing The Airbnb
Over the last three months, we’ve learned a ton. Got a lot of really good feedback. The reviews have all been five-star reviews, but the feedback and the questions that we’re getting have been the same. As a result, we’ve made some tweaks over here to make it easier for ourselves to manage, and also a better experience for our guests, and helping others learn from our experience in terms of the good, the bad, and the ugly of an Airbnb. I’m going to switch the camera around. Hopefully, I’ll keep it nice and smooth so you don’t get dizzy watching it. But I’m going to go over some of the tweaks that we’ve made in our Airbnb.
The door going out to the backyard is a little tricky to lock and open. It’s been one of the main questions. As a result, I bought a little label machine and put the instructions right on the door to show them how to open and close the door, which has definitely helped. This label machine, we’ve labeled a few things in order to help guests out and make things easier. I’m going to go over a couple of other things that we’ve done as well. The AC unit is another thing that we labeled. People were missing the button on the right side. It’s a digital system. Actually, we can also monitor from our phone, which is nice.
In the summer months, AC and the electric bill can be through the roof. One of the things that we’re asking our guests to do is when they leave if they could turn it to 78 degrees. Since putting this on here, they are. Again, I can monitor this from my phone, so I can see what’s going on from a temperature standpoint. But we label the AC, the heat, and the HVAC system to give the guests instructions on how to use it.
A couple of other things that we labeled. One is the utensils. Guests were having a hard time finding the utensils. When we did the custom cabinets, we put in this utensil drawer right here, and guests are not knowing where the utensils were. As a result, we labeled that. That fixed that problem. A couple of other things that we’ve labeled in the kitchen, one of which, there are a couple of pools. We put it where the pool key was, and then, on Amazon, I found a place where you could get a custom key chain made, which has the pool key. The other thing we labeled is where the garbage can is. Again, doing this labeling has definitely helped. We’re not getting the questions anymore.
The other thing we’ve done is we’ve created a couple of different things, our house rules, and then also the Wi-Fi network. But the house rules right here, the big challenge that we’re having is the checkout time at 11:00 a.m. I’m going to create another specific checkout sign that we put right at the door so people know. The other thing that we labeled as how to use the keypad. They were getting the code to come over here to have a keyless entry. That way guests can just check themselves in. But they were having a hard time operating it, where they were putting the code in, but you got to press the quick-set button in order for it to activate, whether you’re locking it or opening it. Again, we put that label on the door, which has definitely solved that problem.
The other thing that I’m going to do, I think, on the door and the keypad here, we’re going to put a sign right here that just specifically says, “Checkout time, 11:00” Again, our biggest challenge has been checkout time. Another thing we did, and it was a hard decision to make, is there was a tree right here. We’ll have some before and after photos, but this tree was a mess. May, and June, when the pollen was dropping, it just created havoc in the backyard. It was also starting to buckle some of the pavers. So we decided to take it down. It was a hard decision, but again, it was just a constant mess. People were having a hard time enjoying the back patio, just because of the number of leaves and pollen that it was dropping. So we decided to take down the tree.
Again, our biggest challenge so far, and the biggest issue that we’ve had, is the checkout time. We’re going to put a specific sign up right on the door that’s much bigger and just addresses the checkout time. Hopefully, that will solve that problem, especially for the bookings where you’ve got a turnover on the same day. It’s really important that they’re out of here by 11:00 so you can get the cleaning crew in and
get it cleaned up, beds turned over, so you can have it ready to go by check-in, which is at 3:00. That’s the big thing that we’re going to work on, just to make sure that people understand the checkout.
The other thing that we’ve done is we have an intro video that we welcome them and thank them, and then we go over a lot of the things that I just talked about. That is the welcome video that they get before they get here. That’s been helpful as well. Going into our Airbnb during the summer months, we were actually going to do the turnover and the cleaning ourselves. My wife was going to handle that. We wanted to learn and just really understand all the little details, everything that needed to be done, and also trying to save a little bit of money during the summer months when we knew it was going to be slow. We’re charging $175 through Airbnb for the cleaning.
Airbnb Turn Over - Cleaning and Getting Ready For Next Guests
We had a guest that was staying there, and we were going out of town in the middle of their stay. We were going to be back a couple of days after they were gone. We didn’t have anybody booked, so we were just going to clean it when we got back. But about two days before heading out of town, we had somebody book. They were coming in before we got back, so it wouldn’t have been clean. We were panicking a couple of days prior to getting out of town. We didn’t want to cancel that reservation. Scrambling, I did a ton of research, and asked a couple of friends if they would share their cleaning person on their Airbnb. Actually, they wouldn’t because they didn’t want to steal them away from their property. So through the bad, I actually found the good. I found this platform called TurnoverBnB. It’s awesome.
The way it works is you put your property in there, and then you submit it to cleaners in your local area, and then they bid on the job. It’s really cool. You can go in, you can find cleaners and submit it. You put in your property, and then you do a search. The other cool thing that I like about it is that you can put in a checklist. You put it in your checklist. I’m not going to show it to you because there are some confidential items as far as key passes and codes and all that. You put in your checklist, and then, when they go there to clean, they’ve got to go through the checklist. The better job you do up front with that checklist, the better.
The other thing that I really, really like is there’s a schedule. You can go in, and there’s a schedule that actually syncs with your Google calendar. It goes right into your Google calendar, and then it’s got a schedule as far as the cleaners when they’re coming in and out. Then they accept it, so you know that it’s going to get done. It’s a really, really cool platform that gives you the ability and flexibility to go out and have people bid on cleaning your property and the turnover. The app actually pays them, which makes it really easy as well. They’ve got to go through that checklist. We’ve been really pleased and excited about it because it’s actually made our job a whole lot easier. We’ve now turned it over to somebody that can facilitate the turnover as far as the cleaning.
The Numbers
Now let’s dive into the numbers. We’re pretty excited. Again, our goal was to break even in June, July, August. We finished up our remodel and listed our Airbnb right at the end of April, first of May. May turned out to be a pretty solid month for a new listing on Airbnb, where our total payout was $2,496. June, we had two, two guests for a total of $965 in gross. I should say in net. This is when they subtract out the Airbnb fees in terms of our payout. Payout in July to this point, we’re not even halfway through the month, $1,090, and then August, we’re at $795. We’re getting some last-minute bookings. I’ll show you what we did to make some changes to get some last-minute bookings.
We don’t have any debt, so no debt service, but break even per month is anywhere from probably $600 on the low side to maybe $700. That includes electric. That includes the HOA. It includes our security. It includes Cox, internet. So we’re right at maybe, probably, I’d say in the high fives, low sixes, up to probably $700-$800, depending on the electric bill, breaking even. Encouraged that we’ve been able to get close to break-even during the summer months.
From October through April, May of next year, we’re pretty excited, because if you look at 2023, we’re already almost fully booked out. We’ve got $8,190 in revenue come February and March of next year. So we’re pretty optimistic in terms of being able to net anywhere from probably about $2,000 upwards to probably $4,000 per month during the busy season. We’re pretty excited. The numbers, again, that was our biggest concern going into it, whether or not we were going to have bookings in the summertime, or it was going to be completely dead. That’s a sneak peek of what’s gone on to this point.
Learning Curve
When setting up your Airbnb, there’s a lot to their back end. There’s a definite learning curve. I actually take some courses and done a little bit of studying. One of the things that they talk about and one of the setups that you can have is your minimum night stay. Right out of the gate, based on what I learned is doing a three-night minimum at a minimum. But we’ve made a few little tweaks to it, and it’s actually made a big difference to get some last-minute bookings. One of the things and what everybody says is the one thing you want to avoid is a one-night stay. That’s where the majority of your bad reviews come, are the people that stay one night. If you think about it, anytime you travel, usually, you’re a little wound up. You’ve had a long day of travel. That’s when you’re most aggravated and just not at ease yet. It usually takes a couple of days to unwind.
If you do a one-night stay,… They’re unhappy. They just don’t have any time to unwind. As a result, you end up getting some worse reviews just because they haven’t given your place time. We started out with a three-night minimum, but the tweak that we made is we did change to a two-night minimum from Sunday until Thursday. And then, if somebody were to book on a Friday, it’s a three-night minimum. They would then occupy the entire week. But we’ve had some last-minute bookings during the weekday to do a two-night minimum that has actually been half of our bookings. If we didn’t do that, we probably would’ve lost out on a couple of bookings. So something to consider is what your minimum-night stay is.
The other thing, too, is some competitors around the area are all at three nights or more. So we’ve been able to pick up the two-night stays and get some last-minute bookings, which has definitely increased our revenues. Again, just something to think about and something that we’ve learned and some tweaks that we’ve made along the way. As I said, we’re three months into our Airbnb. Right out of the gate, I thought it would be a cool thing to do, to do a good, bad, ugly case study, and just be transparent in our numbers and what we’ve learned along the way. I can’t say there’s been any really ugly so far. Our guests have been awesome. We’ve got great reviews. I’m sure there’ll be some challenges down the road that we’ve got to deal with. But again, the bad’s been good because we’ve been able to learn, make things better, and tweak as we’ve gone.
Airbnb Criteria
Again, we’re going to be sharing, but if you’re an investor out there looking at a rental property and trying to decide whether you want to do a short-term rental versus a long-term rental, we would love to help. I would definitely say if you’re going to be doing an Airbnb short-term rental, for me, it’s a specific type of property that’s easy to clean, doesn’t have a lot of yard work, doesn’t have a lot of deferred maintenance, and just things you got to stay up on. We do have quite a few single-family properties that we do have as long-term rentals. Initially, I was going to debate on whether we would turn those into Airbnbs. But again, I think what we’re going to do is just stick to more townhome, condo-like properties for our Airbnbs, and keep our single-family homes longer-term rentals, so we’ve got a nice little mix of cash flow coming in.
Again, on the Airbnb side, it is more management in terms of the turnover and just the furnishings and all the things that you’ve got to do. Another criteria for us is this townhome that we got is really close to where we live on the east side of Tucson. So if anything goes wrong or we need to go over there and do something, we can be over there really, really quick. I don’t know if I’d want to do an Airbnb that wasn’t close to where I live, especially if you’re self-managing. If somebody else is going to manage it, that’s a totally different story. But for us, it’s all about cash flow and putting as much money in our pocket. So we’re choosing properties, both on the long- and short-term rental side of things, that are within a certain area and close to where we live, which makes things a whole lot easier.
Hope you enjoyed this video and got some value out of it, especially if you’re an investor looking to possibly want to get an Airbnb, or deciding whether you want to do a long-term or a short-term rental. Again, we’re just sharing what we’ve learned to try to help people make some decisions and learn from our mistakes. If you like this video, do me a huge, huge favor. Give me an internet high five by liking it. If you’ve got any questions or comments, go ahead and comment below. For more awesome videos about living in Tucson, your Tucson real estate connection, go ahead and subscribe to the channel. In the meantime, make it a great day.
I wrote an article that may be helpful called Everything You Need to Know About Tucson Airbnb that I encourage you to read.
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