I’ve finished my second month of Airbnb hosting recently. Month one was lucrative, albeit expensive with the start-up costs. The 2nd month proved to be beneficial as well. This is a new area of investing to me, and I’m certainly still learning as I go. I know the house is in an ideal location and just the right size to make a great Airbnb. The biggest challenge, or annoyance, I’ve discovered is that the home is about 20 miles from my house, so the commute has gotten old…fast. Despite the commute, so far, this little adventure has proven worth it. Since I know that many of you are curious about this avenue of real estate investing, I think it might be helpful to continue to be transparent with the numbers on this ongoing investment.
How Much Did I Make As An Airbnb Host In My Second Month?
Before I go over the numbers for the 2nd month, make sure you check out the numbers for my first month. I bought this house solely to experiment with Airbnb hosting. I’ve learned so much– about people, about hosting, about finances, etc. Learning more about investing is always a success in my book, and it doesn’t hurt that I’m making some money too! However, it’s important to clarify, as I did with month one, I am making money but I’m still able to show a loss on paper– which GREATLY helped with my 3rd quarter estimated taxes!
The Total Payouts
Airbnb is all but crickets. I rarely, rarely get a booking from Airbnb. Also during the second month, I signed up as a host on Trip Advisor. At this point, I have only received one inquiry– asking to violate my rules– and no actual bookings. For me, VRBO is my bread and butter. I get the vast majority of my listings from that platform.
- Total Sales for Month 2: $2,326.07 This number is jaw dropping if you compare it to what I could get if I long-term leased the same property. If I did a long-term lease I would be stretching it to get $900/month. Through hosting, I’m getting far more than double what I could earn through a long term lease. Something I am quick to point out to people, however, is that the sales number is a gross income- not net. The net is far less than that number.
- Airbnb GROSS sales: $465.60
- VRBO GROSS sales: $1,860.47
Total Expenses During My 2nd Month
As I stated in my month one recap post, the payout numbers are deceiving. The overhead is substantial starting out. I’m still technically working in the negative, but I think by the end of month three or beginning of month four, I should be out of the negative. Unlike a long term lease, the holding costs are substantially more. I have all the utilities, supplies, taxes, insurance, etc. The first month had much higher expenses than this month, and I think this month’s holding costs are a more accurate picture of what they will look like consistently.
- Mortgage Payment: $713.98
- Supplies: $107.67
- Utilities: $317.69
- Maintenance: $35
- Insurance: $107.53
- Hosting Fees: $500 (if you recall, I decided to switch to the one time fee. I won’t pay this fee again for another year)
Total Expenses: $1,781.87 This number will be substantially less next month because I won’t have the $500 fee included.
A Recap of the Numbers
In profits, I made more during my 2nd month than I did in month one. I grossed $2,325.07. However, I spent $1,781.87. For the 2nd month, I netted a profit (on paper) of $544.20. I anticipate my bookings to dwindle through the remainder of the year since traveling pauses during the winter. That will be my biggest hurdle and learning curve. I now know that during the summer months, this house is extremely popular due to its proximity to the lake. I plan to substantially increase my summer booking rates, and in an attempt to generate more bookings during the slow season, I will probably slash my typical rates by at least half.
Being an Airbnb host is much like a checkers game. I’m trying to create a strategy that beats my competition and provides me with bookings. I’m new to this strategy, and I won’t lie- it can be stressful. But, for now, it’s worth it.