You may remember last year I purchased my first non-flip property. This buy-and-hold property appealed to me because it was in great condition, great location, and I knew it would appreciate. I had quietly been watching the Airbnb phenomenon, & I decided to dive in. After 10 months & two Airbnbs later, I’m liquidating my assets and quitting Airbnb. Whether you’re a seasoned Super Host or a curious Airbnb bystander, it might be worth knowing why I quit Airbnb.
Why I Quit Airbnb
My first Airbnb purchase was the tiny cottage in the historic downtown. This home was in phenomenal condition, had been well maintained, and the only updates that I did were paint & replace the electrical outlets. The location & condition sold me on the little cottage. Stone Manor Airbnb was much larger (double the size!) and in another historic downtown area. It too was in remarkable shape with numerous updates.
I paid more per square foot for the cottage Airbnb than I have ever paid for a house. And, I’m not going to lie, that made me pretty nervous! I’m used to flip prices! For Stone Manor, however, I got a great deal on it- even with all of the updates. Even with the great locations, I learned that the typical Airbnb strategy does not work with my goals or my schedule.
It Requires A Lot Of Time
I greatly underestimated the amount of time it would require for me to communicate with guests, to clean the properties, to shop & furnish the properties, etc. Airbnb was not my full-time job, nor did I want it to be. And I quickly realized it was taking a healthy portion of my time.
The cottage Airbnb was located 20 miles from my house, and during the summer, it was quite busy. I was constantly driving up there to check-out guests, clean, and prep for the next guests. Many hosts do delegate this out, but I was never able to find a cleaning crew that I felt confident could keep it clean. Airbnb hosting is not passive income!
It’s Very Unpredictable Income
My first month with the Airbnb did not turn a profit, but that did not surprise me. I had so much overhead my first month with purchases that I didn’t expect to have a profit. The following few months did turn a profit; however, by the fall, the profit had decreased and continued to fall through the winter.
The weather greatly impacted tourists to the area, so by the beginning of November, I only had a 2-3 weekends booked for the entire month. It’s hard to create a budget and maintain it when the stream of income is so unpredictable.
It Wasn’t As Profitable As I Expected
While the summer months were profitable for my cottage Airbnb, the profit I accumulated quickly vanished during the fall & winter. Whether the place is booked or not, the mortgage payment, insurance, utilities, internet, still must be paid. I’m not personally a fan of unpredictable income, especially when I have such overhead that has to be met each month.
People Can Be Tiring
Even though I was not a host that met each guest or even interacted with them in person, I still had plenty of communication with guests. I had some really great guests, and one very regular repeat guest. However, I certainly had my share of nightmare guests. Guests that are rude, inconsiderate, ignorant, demanding, & high maintenance. Since Airbnb hosting is review-driven, I quickly came to the conclusion that I never want my investment dollars to rest on someone’s opinion of the sheets.
The Market Had Become Oversaturated
I’m located in an SEC college town metro area. On paper, it looked like I should be able to maintain a high occupancy rate. However, more and more people were jumping on the Airbnb bandwagon, and the market became very saturated with other hosts.
The Garage Airbnb
As of this week, I have sold the cottage Airbnb (for more than I paid), and I’ll be listing Stone Manor next month! So what about the Garage Airbnb? I’m still proceeding with that project! What I like about the garage airbnb rather than a dedicated vacation rental is that the overhead is substantially less, and there is not as much pressure to keep it rented. I will finish remodeling the detached garage and rent it out as a vacation rental in hopes that it will supply another income stream.
I’m always willing to try something that will make me money- and I am glad I ventured into Airbnb. I learned a lot of lessons and still made money! But I learned it just doesn’t fit with my business model, my personality, or my schedule! As I plan to transition to single family rentals in the coming year, I’m ready to venture into my next investing experiment!