This Airbnb host matched her mortgage payments by bringing in $51,000 a year — is short-term rental your ticket to self-catering?

As the cost of living remains high in the United States, some Americans are looking for other ways to supplement their income and pay the bills, such as renting their homes.

“That was absolutely the reason to do it,” says Hilary Hattenbach, author and Airbnb super host, adding that her previous careers as VP of digital marketing and then as a consultant meant the job was pretty inconsistent. .

Hattenbach and her husband Jared own a 1920s duplex in Silver Lake, Calif., and have been renting out one of the units since buying it in 2011. The couple first put it up on Airbnb in 2014 after their original tenants gave notice and they made some updates.

“We had a mortgage to pay. And with Airbnb, the amount of money we were making – it was almost exactly the amount of our mortgage. Some months it would be a bit more. Some months it would be a little less,” she says.

A month of august Airbnb report says countries with rising inflation saw an increase in hosts in the second quarter of 2022. According to Airbnb, the typical U.S. Airbnb host’s income reached more than $13,800 in 2021, a jump of 85% compared to 2019.

The couple ended up earning an average of around $51,000 a year between 2014 and 2019.

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The cost of living in the United States is high

Even though mortgage rates have recently fallen below 5% for the first time since April this year, they are still significantly higher than they were at the same time last year.

On top of that, everything from gas to groceries is more expensive than before, and rising Fed interest rates mean it’s also getting more expensive to borrow.

A Airbnb’s May survey showed that nearly 45% of hosts globally said their accommodation income helped them stay home in 2021, while 46% said their accommodation income covered food and other necessities that are become more expensive.

The story continues

Hattenbach notes that life in Los Angeles is quite expensive, so it was necessary for her and her husband to supplement their existing income to pay off their mortgage. The couple looked at properties that were either duplexes or guest houses that they could rent out.

The duplex is located near the iconic Los Angeles Hollywood sign and the Griffith Observatory, and she says it gets a lot of tourists.

The couple have a 30-year mortgage on the duplex and the payments are around $4,000 a month. Hattenbach estimates that they have been able to cover the full cost of the mortgage 85% of the time since they started hosting with rental income alone.

When the COVID-19 pandemic hit in 2020, Hattenbach and her husband gave some former Airbnb guests a short-term lease, but she says they plan to put the property back on the rental platform once their current tenants will be gone.

Costs to consider before becoming a host

The first step to becoming an Airbnb host is knowing the numbers, says veteran host Danny Ruteen, former Airbnb employee and owner of OptimizeMyBnb.com – a blog site and business designed to help hosts get the most out of it. gone from being an Airbnb host.

If you do the math and find that your estimated rental income might not be enough to cover accommodation costs plus your mortgage, you might want to think again. Your location is also important.

“I would suggest looking at the market to make sure it’s a good market,” advises Ruteen. “Measure your mortgage costs and your other fixed and variable costs.”

You will need to estimate how much you can reasonably earn from the rental income and whether it can cover all the costs of owning and hosting your property.

This may include the cost of upgrades and renovations, interior decoration, cleaning and maintenance (you will charge your guests a cleaning fee), a smart lock, keypad or a safe and additional insurance. Airbnb offers its own free insurance, but you can always purchase your own.

Hattenbach says she learned some important lessons when she started hosting. “We kind of underestimated the cost of running it,” she admits, explaining that she and her husband initially charged a low cleaning fee and cleaned the apartment themselves, but then hired a professional cleaner and then increased the fees.

And don’t forget to consider the tax implications. You’ll need to report your rental income when tax season arrives, although you can deduct expenses such as cleaning, advertising and repairs.

Reasons Why Short-Term Rental May Not Be Your Best Option

You may instead want to consider renting your property long-term if you are looking for consistent income.

And you’re not as subject to the ups and downs of the travel industry, such as seasonal holidays or pandemic closures – the short-term rental business has suffered in the first year of the pandemic. COVID-19.

And while with short-term rentals you can benefit from flexible pricing and greater earning potential, you’ll also have to deal with upfront cleaning costs and the regular supply of essentials like towels. towels and toilet paper, as well as keeping track of wear and tear due to the fact that there are so many people at home.

Some markets can be a potential headache for an Airbnb host, warns Ruteen. This may be due to a lack of rental demand in these areas or issues with customers.

Ruteen also advises against renting a home that has sentimental value to you, as there is always a risk of damage. You may also be at risk of theft or receiving complaints from neighbors.

Renting your main residence can be tricky. “If we’re talking to the family who only go on vacation once a year – for two weeks, maybe a month – that’s not ideal,” Ruteen says. The longer you can rent out your home (or part of it, as Hattenbach does) the better.

It is more common to rent a second home, for those who own one. Vacation home sales have skyrocketed in the second half of 2020 and into April 2021, but demand has now run out of steam thanks to rising mortgage rates and house prices.

How to Maximize Your Earnings as an Airbnb Host

Airbnb’s website notes that holiday weekends, such as Thanksgiving and Labor Day, and the summer and fall travel season are popular times.

“It’s really important for a host to start strong – to start with momentum,” says Ruteen. “If a host starts in low season, then their pool of – I call them FPG – potential future guests is just tiny, because you’re bumping into existing hosts with reviews.”

He recommends charging less for weekdays and more for weekend stays, though first-time hosts will have to start lowering their prices overall.

It is also crucial to make your rental as desirable as possible. Your online ad should be up-to-date and appealing to potential customers, with great photos and a thoughtful description.

If you meet certain requirements, like high ratings and reviews and enough completed bookings, you could be awarded superhost status, which can attract more travelers.

Ruteen advises creating a digital Airbnb guide that answers some basic questions, like how to run the washer or what the WiFi password is, and spells out the house rules. You can even include recommendations on what to see or where to eat in the area.

Hattenbach also listened to his guests – replacing regular blinds with blackout blinds when they told him the light filtering through the windows was too bright in the morning.

It’s about creating a space that you want to stay in, she stresses.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.