Pricing your AIRBNB?

[Eileen462]

Hello Hosts!

Yes Im going there!  We all are in this to make money.  This weekend I stayed at the Marriott it was only 140.00 per night!  The bed was AWESOME.. the shower was AWESOME.. had a small kitchen with stove dishwasher, apartment size refrigerator.  I could have just moved in!!  Also a couch with fold out bed.  and a full breakfast every morning.  It couldnt have been better!  So,  I am NOT the Marriott.  I have a simple cottage home thats middle class.  Im confused how to price my house  I have 2 bedrooms in it I can rent out.  The other people in my area rent from 50.00 to 95.00 per night.  How do you price your places?  Thanks for helping me learn.  Smiles,  Eileen

[Debra300 · Accepted solution]

@Eileen462,

I did an old-fashioned comps assessment with other listings in my general area by doing a search on Airbnb with specific filters to find listings that were similar to mine, entire unit, number of bedrooms, kitchen, washer/dryer, parking, etc.  I then looked at several properties to see their furnishings, amenities, gage size, and read the reviews.  After all of that, we decided to price our listings in the lower end of the pricing range. 

Initially, we only did short-term rentals in Atlanta, and consistently got reservations, but received a lot of requests for long-term stays when the pandemic occurred.  Now, we primarily rent long-term with occasional short stays to fill gaps when we are onsite.  The units are booked about 8-9 months per year, and many of our guests have been people in between homes due to relocation, temporary work assignment, and parents spending the winter break with their children who are attending the local colleges and universities.  There have been a few incidents of hidden/unreported small damages so collect a refundable deposit via the Resolution Center and require that guests obtain renter's insurance and assign us as covered persons.  If a guest books via Vrbo, they have to take the damages insurance that's offered.

[Eileen462]

@Debra300   Thank you Debra for this wonderful information!!  Eileen.

[Eileen462]

@Debra300   Also, Debra do you rent long term through AIRBNB?  Do you collect your deposits  through AIRBNB  wondering how much you ask?  Do you have a certain place you recommend for renters insurance?  Thanks for answering!  Smile,  Eileen

[Debra300]

@Eileen462,

We rent long-term stays via Airbnb and Vrbo.  On Airbnb, the damage deposit amount is similar to what a hotel holds on a credit card, and it's collected and refunded via the Airbnb Resolution Center to maintain all monetary transactions on the platform.  This is written on the description page, and the house rules.  We do not recommend a particular provider for renter's insurance, but most people probably get a policy from the same company that's insuring their vehicle or home so they can get a multi-policy discount.  The longest stay that we've had is five months, which was a college student doing an internship for one semester.  We don't like to go longer than that, because we want to get into the spaces to inspect and make any necessary repairs/replacements.

We have very strict rules about mail delivery, and using the address for driver's licenses and the registration or subscription of anything.  Guests cannot get the mail since our neighbor picks it up daily (mostly junk).  They may have courier and food deliveries.

[Eileen462]

@Debra300   Thank you for the info Debra.  I am exploring the laws and regulations in California.  I discovered that AIRBNB guests have residential rights here if they decide they want to take root and stay.  Also, rental insurance is a requirement here if someone is agreeing to a lease or staying more than 30 days.  I think a deposit is a great idea.  It lets our guests know you are serious and guarding your investment.  Here in California if you allow mail delivery here or if someone just starts using your address they are considered a resident and have residential rights and must be evicted at that point which takes alot of money and up to one year of court battles and alot of times the judges side with the renter.  Cheers!  Eileen

[Debra300]

@Eileen462,

I lived in Northern California for 45 years, and am very familiar with the tenancy laws there.  I wouldn't offer long-term rentals there.  The maximum length of stay would be set at 27 nights.

[Eileen462]

@Debra300   Hi Debra, you mentioned to me in another reply that you only allow a 27 day stay.  I am still learning California law on having an AIRBNB.  I am wondering why the 27 day stay only?  Thanks for your reply,  Eileen

[Katrina393]

So Ive noticed several conversations about this. I hear what youre saying. I had a job for 5 years where I was staying in hotels 2 -4 times a week. Also serveral air bnbs for years. I stand by the value of an air bnb / short term / vacation rental. For the price of a hotel room, I get a complete space. I get privacy, the amenities that I booked. Plus a unique experience. No comparison to a hotel room. Im aware of some nightmare or low quality experiences however there are so many options and I feel its my responsibility and opportunity to research and.  be aware of where who and what I am booking. I have zero negative experiences. My hosts have been responsive and if Ive had any concerns I communicated with them and my hosts always responded timely and in a meaningful way. So flipping that around being a host, giving a ton of information and photos. Being open, accepting and communicative and responsive. As far as pricing, I dont know what your location is but definitely do not under sell yourself. Im in California (most expensive ugh), a BASIC clean room can be over $125 minimum, not including what you described. 2 bedroom cottage sounds lovely; without knowing anything else...

[Eileen462]

Hi @Katrina393  boy would I love to learn from you!  Could we chat outside of AIRBNB?  Is that allowed and would you be interested?  I am green as it gets when it comes to the hotel business or AIRBNB.  I ask alot of questions here because I am trying to learn quickly from other experienced people.  My house was built in 1952 its very small but quaint.  I have 3 bedrooms one of which I stay in.  My mother left me the house when she died in 2021 from COVID.  Its in San Bernardino which is a super depressed crime ridden area but the house in in a good neighborhood.  I am trying to slowly fix it up in the meantime the house has bills to pay and I have another home in Victorville I have to fully support.  So, I tried renting this house to college kids and everytime was a nitemare so I thought I would try AIRBNB hoping to make a thriving business from the house in order to support it and me a little too.

Im reluctant to move anything where my mother place them because I still see my WHOLE family in this house.  It was the gathering place.  Her chair still sits in its spot with her picture on the wall.  The crosses hang that were placed on my Mom Dad and sisters caskets next to it.  My sisters snail collection still sits on the mantle.  The family picture wall is still up with my loved ones faces smiling at me.  I was raised in that house , moved in at age 5  I see my grandparents in it, my parents, my sister, my aunts uncles cousins all of whom are pretty much gone now.  I brought my daughter home from the hospital there when she was born.  So its hard for me to allow others in it especially when they disrespect it.  This is the reason I say in my profile .. make yourself at home because of the long family history of that house.  My mom actually passed away there so it holds alot of love love love  and 60 years worth of memories for me.  Its not just a house its a home.  Thanks for listening waiting your response.. Smiles,  Eileen

[Robin4]

@Eileen462 

Eileen, trying to guess whether you are going to make money or not by short term renting is no way to run a business.

The only way you can make sure what you are doing is profitable is to run a proper 'Profit and Loss' sheet.....similar to what I do here.

This is an Excel spreadsheet that I update from time to time as conditions change. 

As areas become saturated with Airbnb listings, hosts start undercutting each other just to secure bookings. A booking is worth nothing to you if you loose money by staging it.

As you can see I don't make a fortune with my listing and there are 2 bedroom properties in my area that are $30 per night cheaper than mine! Those hosts are actually paying to have guests stay in their property because they have not taken into account what it cost to host.

I have actually done this exercise with the spreadsheet for other hosts in my area and they are stunned when adding up not just the direct costs but the indirect costs, they are actually loosing money.

At least with a proper profit and Loss you know where you stand and what your bottom line is.

Cheers........Rob 

[Eileen462]

@Robin4   Thank you Rob!  I devised something similar but also noticed so many offering their rooms in my area for 30.00 a night  ridiculous!  The absolute bare minimum I can afford to keep someone and thats giving them basic everything is 75.00 per night.  But there are perhaps 20 in my area that are renting between 30.00 and 50.00 a night.  Then, AIRBNB suggests us new ones offer discounts for our first few bookings.  If I am going to do this, take my time and efforts bring others into my home in my space  it has to be worth it and profitable for me and all of you should feel the same and Im sure you do.  The undercutting needs to stop and everyone has to agree in our areas that their homes our time our effort and our RISK is worth more than 30.00 a night.  I would rather explore other avenues than waste my time and money and privacy!  Thank you again Rob  great reply!   Eileen