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...

[April3]

@Christina142 One of the reasons your places may not be getting booked as much as you'd like is outdated decor and a lack of amenities some airbnb guests expect. All the furniture looks to be of high quailty and in good shape; however much of it is quite dated and in a style guests may not be looking for. Your linens, towels, and bedcoverings could all use an upgrade, and well as the TV's in most of the units. The kitchens seem quite basic and are not given much attention in photos, and this can be a sticking point for potential quests. I'd say minus the larger, more period style listing, the your places lack a bit of character that guests look for. Since your market is probably quite competitive, these could be some of the reasons you aren't getting booked as much as you'd like. 

That being said, Sacramento and the surrounding areas are great for finding deals at thrift stores, estate sales, and craigslist to add inexpensive but stylich furniture and decor to your places. Coupled with new bedding, upgraded TV's and some attention to the kitchens, and some new photos of upgrades, that could be the boost you need.

However, if you don't have the time or desire to make some changes, or simply don't see yourself in the airbnb game for much longer, the additional cost may not be worth it

[Christina142]

Thanks for the reply.  Unit B's decor and furniture are pieces you'd find at the turn of the century when the home was built.  Unit A is the unit I think needs an upgrade.  The other two units decor hasn't been a problem.  I've been toying with the idea of upgading the TV's (there are a total of 8 TV's, so it could be quiet pricey.)  Thanks so much for the feedback.

[Paul154]

@Christina142

So many questions and possible scenarios to guess about.  For me, Airbnb is more profitable than long term renting. 

In business, the most important and difficult question is to determine the correct price.

Too low, bad things happen. Too high bad things happen.

Smart pricing may give you an idea, but only you know your area.

IB will increase your revenue and profitability, but it does bring more risk.

Also, you need to decrease your expenses. You are a Superhost. Perhaps you are spending money on things which too good for your guests. Cable? Security Systems? Most hosts do not provide these things.
Perhaps you are overpaying housekeepers?  

Running a business is a non-ending riddle of how to provide the most desired and valued service cheaply.

Good luck

[Christina142]

I do provide cable, alarms and high speed internet...isn't this common to provide?  

[Paul154]

Some people do provide cable. It is a luxury item, especially for older people.

But younger people appreciate high speed internet and watching TV through WiFi.

Be it on their computer, on your smart TV or with Chromecast.

So in my mind, you are double paying for internet AND cable.

As for a security system, it too is a luxury item. Anything over and above locks on doors and windows is nice but not necessary to provide.  Most hosts do not have expensive security systems.

Please understand, you understand your clientele much better than I. 

[Jessica-and-Henry0]

@Christina142

I totally agree with @Paul154 about cable unless you mostly cater to customers who are age 50+

FYI, I don't even have a TV in my home because I usually watch stuff from my laptop. Instead, I have unlimited high speed internet. None of my guests have complained about no TV, most have commented that the internect connection at my home was one of the best they've ever experienced. 8 TVs for 3 units seems way too excessive (does each person really need their own TV????) If you think TVs are a must, I'm sure 1~2 TVs per unit would be more than enough. (I'm not sure how it is in the U.S. but in Korea for cable, pricing is 'per home (basic, 1 TV) + per TV (additional TVs in the same home)" so if I had 3 homes and 8 TVs in total.....that alone would cost me at least $60 a month. In comparison if it were 3 homes and 4 TVs in total it would be closer to $35~40. This may seem like a small amount but it also affects electricity use. Small amounts here and there really add up.)

I also think the security system is over the top. I'm sure there aren't that many valuables in the listings so considering you are an off-site host, keypad door locks with basic surveillance of entrances and outside common areas would sufice. Although providing high quality service and value is important, hosting is a business and you need to work hard to keep expenses/overhead costs down while when you do spend money, it should be for things that count and are clearly appreciated by the guest.

[Tom530]

I provide all three. As much for my own peice of mind as theirs.

[Francisca16]

I agree. 8 TVs are on the high side. I have one TV for two guests which they rarely use. We have to cut down cost to make it in this rather competitive business.

[Rachel248]

I just recently cut cable at my place and haven’t had any complaints. I have an Apple TV so guests can stream from their personal devices, and Netflix. Seems to be enough. I think you could come up with a nice mix of modern and still keep the classic charm if you update the decor. I’d change the bedding too. One thing that I don’t think anyone has mentioned is the value of professional photos. They’re an inexpensive ( in the grand scheme of things) way to really set your unit apart.

Re: instant book- there’s a setting that allows you not to accept instant book from guests with no reviews. You can also cancel without penalty a few times per year. I’ve noticed that the app sometimes defaults to searching properties with instant book. The other thing is you may consider is splitting up the larger unit into smaller shared accommodation listings. It may be a situation of just being too big a space to book regularly. I think your write ups are really thoughtful and well done! 

[Samuel161]

Something new to consider is also a great way to make more off your listing as well! The inconsistency of the mattresses in Airbnb is a huge opportunity for all hosts!!  One of the newest ways to maximize your listing is to partner with a company to sell the mattress directly to the guests. All you have to do is place a placard (They will provide) next to the bed and if the guest loves the mattress they place an order on line using a coupon code tied to your listing. The mattress is roll-packed and shipped within a week. Commissions are paid monthly. Easiest way to bring in another revenue stream to your listing. 


https://recovrmattress.com/pages/referral-program-for-airbnb-hosts  

[Katie289]

@Christina142 How are things going for you? I have been hosting here in Sacramento since last year and I think that I am starting to finally figure out a formula for making a small profit. After looking at your listings I do have some suggestions for you based off of what I have had to learn personally! Would love to chat -Katie 

[Robin488]

I think that location is a big factor on if you would make more renting month to month or daily. In our case we have a large log cabin in the woods on a small private lake, it has 5 bedrooms and 2 bathrooms.  If we were to do an annual lease we would have a difficult time renting for $1200 per month due to location and employment options in area. Interestingly enough we also do very well with renting the home daily with likely an average income of $4000-$5000 per month (average for year, some months are $8000 and some are $1000) using AirBnb and VRBO. It is an area people from the big city visit to get away from the city, there are snowmobiling trails and 4 wheeler trails and a lot of lakes for fishing and boating in the area. Our property sleeps 10 in beds and up to 13 with futons.  I think the secret is to figure out the draw for your area, and market to that. Ours is a quiet retreat in the woods, yours sounds like it is nightlife or folks in town for work.  We are pet friendly (with a lot of rules around that) but this is an accommodation that helps us stand out from other homes similar in our market.  Look at who has been renting from you and market to that, check with local wedding venues (we have one 4 miles from our house and we are booked all summer Thursday-Monday with several wedding parties for the venue.  We contacted them and they now forward on our house for their wedding parties.   Good luck!

[Tom530]

I end up making less than I would with a straight long-term rental (with paying my co-host 30% to keep it cleaned up and be the primary interface to guests). However, it does let me keep the suite open for summer pool parties and friends who want to come up and visit for a few days, which is a nice thing to have. 

[Elizabeth1306]

HI Christina! If you're still trying to decide what to do on this, I suggest listing all three together as a place that can sleep all the guests the three combined can. I find the more guests a home can sleep, the more it's booked and the higher the rates are. It's simple supply and demand... There are always more smaller homes available than larger homes for big groups. Good luck! 🙂

[Brittanny0]

Airbnb is definitely not a sure shot as we also had come to realize.  You'll definitely need to put in the work and it totally has to align with who you are.  1.) If your area isn't the most busy, then the aesthetic will have to be something people would visit for.  In other words, there's got to be an experience worthwhile that'll attract others.  A lot of times, even if you try, it doesn't mean you'll get it right as design & architect isn't for everyone  2.)  You gotta be on top of your hosting game as in, you gotta enjoy the idea of hosting people and providing them top-notch hospitality.  If being excited to meet & serve random people isn't for you, it's quite palpable in the reviews & listing details.  3.) You gotta be organized as it takes quite a bit of energy to constantly coordinate w/ the cleaning staff since the days are so sporadic.  4.) all the cost of utilities, appliance fixes, supplies & unexpected costs all add up, ESPECIALLY YOUR TIME.  It's definitely like an on-call job which is like working even if you're not working as you have to fully reserve your attention/availability for the guests.

All this said, without  the help of a team of at least 2, or a more aligned situation for a one-person team, I wouldn't recommend airbnb to anyone as a sure shot as I once did and definitely can see that it's quite comparable to having long-term renters.  I totally feel ya so good luck with your decision, Christina!