What do most Americans blow their budget on? Food? Clothes? Gadgets? None of the above, actually. On average we spend the largest portion of our budget – a whopping 31.5% on average, according to a recent NPR report – for rent or mortgage.
If we’re going to spend such a large slice of our budgetary pie on living accommodations, why not make some of that money back by renting out extra space every now and then? I know what you’re thinking. It’s a bit creepy. It sounds like a lot of work. I don’t want to open my home up to a stranger.
For those interested in using their extra space to generate extra income, a popular online platform used by many people is Airbnb, which currently helps individuals around the world earn thousands of dollars a year in supplemental income.
How Airbnb works
By the end of 2012, Airbnb had over 10 million bookings under its belt, with 250,000 listings in 30,000 cities across the world. And it’s not strictly for extravagant accommodations; listings range from luxury lofts to bargain apartments to airstream trailers.
Listing your space through the services is completely free: Airbnb makes money when you make money, charging a 3% host fee from the guest’s total fee. Whether or not you hang around during the guest’s stay is completely up to you as the host – some people rent their entire property, while others rent out a room at a time and go about their normal lives.
Airbnb users do need to be careful about how and to whom they rent out their space. Airbnb does not provide any screening of potential renters. Instead, hosts assume the potential safety risks associated with having strangers in their home — but they do have the ability to pre-screen and message guests before approving them to stay.
“Letting strangers in was the biggest concern,” says Phil, who hosts at several spaces in Barcelona along with his wife and two children. “The first guest we had stay set the bar high, and thankfully the majority of all other guests have been amazing.”
If you’re worried about your stuff (who wouldn’t be?), Airbnb’s standard insurance policy protects each host’s property for up to $1,000,000.
How much money can you make with Airbnb?
Phil and Fiona, the couple in Barcelona, rent several apartments and have taken on Airbnb hosting as a fulltime gig. But for most, hosting is a means for earning a bit of extra cash, in addition to day-to-day income. “It’s a fantastic way to augment income and lower financial responsibilities,” says Ransley Carpio, a startup consultant who rents out his space when he travels for work. “We can supplement an additional $800-$1100 per month very easily by renting about 7-10 days.”
Mikey Rox, a writer and self-proclaimed “Super Host” says by regularly booking his condo, he manages to “bring in between $2,500 and $3,000 per month – on just one room.”
Journalist Erica Swallow manages to cover the full cost of rent (NYC rent, at that) with Airbnb earnings. “In the past 12 months, I’ve made $18,092,” she says.
10 tips for making money as an Airbnb host
If you’re considering earning extra income on your space, check out these ten pro tips from a handful of experienced Airbnb hosts.
1. Optimize your calendar
“I realized early on in my Airbnb hosting days that the 2-3 day bookings weren’t helping me turn a profit,” says Swallow. “I would spend 5 hours of my time cleaning, and they would only be paying a few hundred dollars to stay in my spot. Considering my usual consulting rate, this wasn’t cutting it. So, I determined that a week was the minimum stay necessary to actually be worth my time.”
2. Do market research
“Before placing your listing, research the Airbnb market in surrounding neighborhoods, keeping an eye on the listings that would be comparable to yours, based on size, price, amenities, convenience, and then price accordingly, optimizing for the highest price possible,” says Swallow.
3. Respond quickly and thoroughly
“When you get a booking request, respond immediately and in detail, including helpful tips and a cheerful attitude,” says Swallow. “Download the Airbnb iPhone app and allow notifications so that you are always alerted when bookings come in. A number of guests have commented on how quickly I respond and how friendly I am via messages. In fact, a few have noted my friendliness and eagerness to go out of my way with helpful information pushed them over the edge in choosing my apartment above others.”
4. Fill out your Airbnb Guide
“The Airbnb Guide is a perfect way to showcase that you’re a master of your neighborhood and city in general,” says Swallow. “This can help [demonstrate] that your apartment is in the middle of the fun, especially if it’s in a location that guests may not be too familiar with. I keep my Guide up-to-date to show that while my apartment isn’t within walking distance of Time Square, there are a lot of other cool spots nearby.”
5. Take beautiful pictures
“Airbnb has made public that listings with ‘verified photos’ get booked more often,” says Swallow. “So take advantage of Airbnb’s free professional photography, which will make your space look the best it can. There’s a noticeable difference in quality between amateur and professional shots.”
6. Maintain a clean home
“Nobody wants to arrive at their vacation destination to a guest home that looks like it hasn’t been cleaned in a month,” says Rox. “While most people don’t expect the house to be cleaned to hotel standards, the floors should be vacuumed and swept, the sheets should be fresh and put on with care, and the bathroom and kitchen should sparkle. Anyone who prides themselves on the cleanliness of their home will see their efforts pay off in the reviews.”
7. Don’t treat the guests like a paycheck
“Many people (including me) use Airbnb as a source of additional income,” says Rox. “That’s well and good – but you also have a responsibility to provide your guests with a service. If you treat the guests like customers instead of guests, it will absolutely lessen their experience.”
8. Offer hotel-quality amenities
“In our guest bedroom we have a coffee maker, mini fridge, TV, and DVD player,” says Rox. “These four appliances allow the guests to have a self-contained stay, which they appreciate when they want to relax. Many of our positive reviews reflect on this attention to detail, which, in turn, influences other guests’ decisions to choose our home over other listings.”
9. Offer limited food options
“You don’t have to offer food as part of the package, but I choose to offer cereal, coffee, and tea because it’s one of those added bonuses that will help the guests choose my home over someone else’s when deciding where to stay,” says Rox. “I offer these three items because they’re relatively inexpensive, they go a long way, and there’s no fear of waste due to expiration dates.”
10. Add a nominal cleaning fee to your listing
“To offset the cost I incur from [Airbnb’s host fee], I added a $15 cleaning fee that’s attached to the total fee upon booking,” says Rox. “This small fee can help you recoup some of the lost income from the booking fees, which adds up over time.”
Airbnb is just one of many the tools available for earning supplemental income. For more ideas on earning extra money for savings, check out the rest of our YOUconomy series.