It’s called being a disruptor and Airbnb is one of the biggest of them all. When a disruptor comes to market it will change the entire dynamics of an industry and in the case of Airbnb that’s the short-term rental market. Gone are the days when a property owner is at the whim of an agent who rents out the property at a rate that is often far lower than desired in order to fit in with expectations of the area. There are no changes in prices for peak times and no way for the owner to use their property for their own enjoyment during the year. Bad tenants can be hard to remove and damage to property can be a costly exercise as problems build up over the years. The reciprocal review system through Airbnb takes most of the risk out of running a short-term rental without the security of an agent.
Airbnb has changed the game. Anyone with a spare room or bungalow, or an investment property have always been able to tap into the short-term rental market, but now Airbnb makes promotion far easier. It’s simple for owners to connect with people looking for a bed. Instead of making small change with lodgers – depending on the area a tenant in a shared house may pay between $100-200 per week – a property owner could make upwards of $700 per week just by renting the room out nightly. They can either clean themselves or pay a cleaner, and just watch the dollars roll in.
Renting out an entire house for short-term tenants obviously takes more work but has the potential to earn far more money than what a long-term tenant would pay. That said, guests are not paying utilities so owners need to factor in those costs usually covered by a tenant.There is also scope to increase prices according to seasonal fluctuations, give discounts for longer stays and enjoy boom times during events when many towns are booked out. Airbnb actually started as AirMattressBnb and was conceived when major events in San Francisco were highlighting a significant shortage of beds during peak times. Airbnb’s founders changed the game by making it easier for guests to connect with prospective accommodation providers offering a cheaper and easier alternative to the usual short-term accommodation model.
When I was made redundant 18 months ago I didn’t have to immediately worry about how my mortgage was going to be paid. My Airbnb studio in my converted garage had already shown itself to be lucrative and a few tweaks meant my earnings were increasing all the time. Although my home no longer has a garage it now has a small business that earns about $30,000 per year which is enough to pay the mortgage and cover its own tax. Yes I have people in my home all the time but they have their own entrance and we don’t need to see each other beyond greeting or offering assistance. My biggest point of difference – which resulted last year in 97% occupancy, or 311 booked nights – is my focus on offering as many little extras as I can: breakfast, natural beauty products, bikes, surfboards, late check outs. By going the extra mile the good reviews have flooded in and my room is now a ‘rare find’ that is hard to book.
Running an Airbnb takes time, diligence and commitment. If treated like a proper business it can add a huge cash injection to your bank balance. Owning an Airbnb really can change your life.