My Airbnb isn't making more money than a regular annual rental what am I doing wrong?

[Christina142]

Hi Airbnb'ers, (if this is a repeat post I apologize, my origional post appears to have been taken down)

I just did my 2017 accounting for my Airbnb units.  I have three units at the same address in Sacramento and found that I'm barely making more than I would if I had annual leases.  And, I haven't gotten a booking for my three bedroom in a couple months.  I'm beginning to think it would be easier to just rent these units out with a regular annual lease, take the furnitrue out, stop paying the cable and other things traditional landlords don't pay.

I have fussed with my pricing and feel I'm competitive.  I'm a SuperHost.  I noticed some of my neighbors advertise on Airbnb and only do a minimum of 30 day rentals  and seem to be getting a much higher rate than I do.  

With the pain-in-the-butt factor of running this property as an Airbnb, I'm considering taking it off the market as an Airbnb but wonder if I'm just doing something odviously wrong.

What do you do to make your Airbnb profitable?  Any tips before I throw in the towel?  Should I do Instant Booking (I haven't because I had a problem with a guest who didn't have any host-reviews who threw a wild party causing drama, damage and expense.)

TIA!

https://www.airbnb.com/rooms/16161834?location=Sacramento%2C%20CA&checkin=&checkout=&adults=6&childr...

https://www.airbnb.com/rooms/16945329?location=Sacramento%2C%20CA&checkin=&checkout=&adults=1&childr...

https://www.airbnb.com/rooms/17417713?location=Sacramento%2C%20CA&adults=1&children=0&infants=0&chec...

[Emiel1]

Hello @Christina142 ,

I looked at your homepage : https://www.airbnb.com/users/105489509/listings

(BTW it does not contain a "cover" photo at the top, page would be more attractive to visitors. I use such a link also for external promotion via social media etc )

You say "I have  3 units at the same address", but i see 3 different units (and not sure from the photo's or the map if they are in the same house) : https://www.airbnb.com/s/homes?host_id=105489509 

I  noticed you charge one price, no matter how many guests involved in a booking (upto max). Maybe consider a lower price for a min. amount of guest and charge for the extra guests ? It will show your listing at lower basic price in the search results !

Maybe your statistics pages give also some clues why people don't book. 

Best regards,Emiel

[Kelly149]

@Christina142 if you regularly have a unit sitting completely empty, then yes, a full-time renter seems like it would make more sense. Why did you think ABB would be more profitable than long term leases? ABB is a ton more management, a ton more risk, way less control over your renter, rates, deposit,etc. I host a guesthouse in my backyard... It's there and ours whether it is rented or not and I'm able to enjoy it when it is empty, but there is certainly no pressure to keep it rented. I don't think I would trust ABB to keep a place fully booked at all times, seems like their end game is in opposition to most property owners' needs. They want as many bookings to as many different guests and hosts as possible. I, on the other hand, want good renters at good rates. Those two things aren't necessarily the same thing.

[Christina142]

Kelly, thanks for the reply.  I did the Airbnb thing as a sort of "experiment."  I don't live a the triplex, I bought it fully furnished, and it's close to downtown Sacramento's nightlife and state government activities.  I thought it might be a way to make more money than a regular rental, and all the articles I'd read stated it was more profitable than annual leases.  So, I thought I'd experiement and see if it was a good way to go.  However, it is a big pain-in-the-butt and basically broke even with what I'd get with annual leases.  I have 2-year contracts on the cable/internet/alarm which are coming up at the end of the year.  I might put a couple of the units on annual leases then.  But, even today I was reading a number of articles stating Airbnbing units is more profitable than annual leases...I must be doing something wrong.

[Kelly149]

@Christina142 Or those articles were polished PR & don’t reflect the reality of the hard work that is str. It’s not easy money by any stretch

[Kelly149]

@Christina142 hard to say what it would be, but you may be on to something with the different experience with the different units.  If I'm remembering it correctly the larger unit is the one that is more period decorated. So, maybe it is the larger unit/larger price that makes it less popular or maybe it is a style decision. Maybe there isn't much demand for old fashioned period style.

So, could be that you str the smaller units and get a long term tenant in the larger (although all groups would need to know about the plans of the other units - you wouldn't want those two different types of renters arguing with each other!)

Or maybe would the larger unit be more popular if it had more modern decor?

I could be biased bc people choose my unit bc it is decorated in a unique way so they choose us over other listings or hotels bc then they get to add 'stayed in a barn' to their vacation list

[Burhan3]

GREAT advice! I couldn't have stated it better myself!

[Jessica-and-Henry0]

@Christina142

IMO, the only reason Airbnb seems to be more profitable for some hosts compared to traditional rental leases is because the hosts are doing the work. (I don't think hosts think to pay themselves for managing and cleaning their own listings.) Also earning will depend on occupancy rate and per night rates so I would not want to be dependent on Airbnb for a stable source of income - there is just too much risk and too many variables.

My listing is a private room in a shared home and I have a similar view as @Kelly149 - it's an extra room in my home that I can enjoy (have friends or family over) when I'm not hosting guests, and unless I'm certain I have a well-mannered, nice guest that will appreciate what I provide and respect my home, I'd rather have an empty room than a bad guest that may cause problems or damage.

[David126]

@Christina142

Which other sites do you list on?

[Christina142]

Hi David,

I have my units on Craigslist, Zillow, two of my units are on Corporate Housing by Owner, and one is on VRBO/Homeaway.  

[Sarah977]

Also, by doing long-term leases, Christina, you are being a socially-conscious member of your community and society in general. There are too many places these days where short-term bookings for entire houses or apartments are making it next to impossible for local, responsible people who live and work in your city (or any other city) to be able to find any reasonably priced rental homes or apartments.

It's different if you just airbnb out extra space at your own residence. Many of us don't want full-time roommates in our homes, want to be able to have the extra rooms available for family or friends to come visit, and just use airbnb as one source of extra income, plus we enjoy hosting and meeting new people from all over. Which was the original concept (long gone by the wayside) of airbnb.

[Christina142]

Thanks for the feedback.

However this property has never been a regular long-term rental.  It was owned by an organization that used it for Corporate Housing for the organization.  I just opened it up as a STR to guests outside the organization I bought it from.  It's more like a bed and breakfast.

Needless to say, this has been an experiment for me in my desire to explore options in real estate; which I'm reevaluating now.

[Deirdre2]

I suspect you are mistaken in the belief that Airbnb originally planned to be a platform for renting a spare room and meeting new people.  That was marketing spin for a start up that fully intended to become a multi billion dollar corporation and make its investors very, very, rich.

[Sarah977]

I'd like to give them the benefit of the doubt, that the original way it was promoted was an idea that had merit and was their vision. But I hear you, greed takes over, and maybe they really had no vision in the first place, just a marketing gimmick. Kinda like Facebook, great original idea (which I understand he had a hard time selling to investors) but now an out-of-control monster that sold propaganda accounts to Russian bots.

[Brittanny0]

I see where you're coming from Sarah but I'd beg to differ with your opinion about being socially conscious member as if people with dedicated short-term rental airbnb's aren't.  Let's all stop pretending to be perfect people because if you were, we wouldn't judge others for their wrongs (& rights) as much as we do... period.  We're constantly judging people about masks/noMasks, vaccines, beyond all the stuff we already judge them for.  So already that's an ironic statement to make about socially conscious, if that even makes sense to you.

If you want to be socially conscious, be it a short-term or long-term rental owner, simply be considerate of both your tenants and neighbors in your approach, period.  Make listings that sets realistic expectations and interact with your guests before they show up to build a relationship, even if it's a short one, that they'll respect rather than just an instant booking.  If you're doing long-term rentals because it's easier and more profitable and then your long-term tenant happens to be an unpleasant person to be around for the neighbors, you're hardly being "socially conscious." 

Anyways, despite that contrasting opinion, I respect yours anyways as we all deserve our own.  Have fun out in Sayulita; it's such a cute place to be, especially during these times.