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...

[Matthew285]

@Christina142 is it the occupancy rate that makes the units not as profitable as you would like? Or is it more the nightly rates?

The 4th floor unit's calendar looks either blocked or full until September; it is fully booked, or something else?

Also: one entirely unrelated question: I noticed you use the twin-beds-can-become-a-king-bed thing.

We were thinking of doing this for a new unit ourselves. How has that worked for you? How many people prefer the twins? How many ask for the king bed?

[Christina142]

Matthew, I think it's the occupancy rate.  I was about 57% booked last year.  The upstairs unit is rented quite a bit with traveling nurses, state capital interns etc...I never have trouble getting guests for the one bedroom.

Regarding your twin/king bed question.  I've had one booking in the last year ask for the twins to be converted to kings.  So, it seems the twin beds are more popular.

[Matthew285]

@Christina142, thanks for sharing the information!

I have only recently started hosting, but I read a lot of research before starting to try to learn from the most experienced hosts.

A bunch of people seemed to be very fond of using the outside pricing services. I liked the concept because it seemed the pricing bots would be able to keep my occupancy high.

I wonder if using a pricing service just for the lower occupancy unit would be worth it for you.

(I was able to keep my occupancy about 80% even through the slow winter months.)

I don't work for any pricing service; just a customer.

[Susan1028]

I’ve not found the auto pricing to be accurate for my area/situation.  It seems to lowball to secure instant bookings (ensure thief booking fee) rather than actually reflect the local market rates.

I do my own market research and pricing.  It takes time, but works well for me, and my occupancy rate has been consistently dependable, even off season....until Airbnb decided to let every fleabag motel list on the platform.

My target demographic is loyal though and I’m back to normal booking numbers.

[Kelly149]

@Matthew285 2 twins pushed together are still 2 twins (unless you add a foam bridge & an over top topper). 

Our listing was all twins until recently. & we very often pushed them together but it really isn’t the same. 

I recently converted to a queen & ditched the twins from that space. 

[Matthew285]

@Kelly149, thanks for also replying!

You are always so helpful, and I appreciate you taking the extra time to share your experience with the twin beds.

Did you use one of those foam bridge things? I was thinking of getting this just in case people did ask: https://www.amazon.com/dp/B00I480FAK

Did you push the twins together because the guests asked for them to be a king? 

Or was there some other reason?

I was going to use the twins because there was a posting somewhere in which a host had three nearly identical units... except for the bed types. He said the listing with all twins rented out the best. (I'm going to go look for that posting...)

[Kelly149]

@Matthew285 My listing has had a wide range of visitors. I estimate that I've had groups (singles) 40% and families (a couple who would share a bed) 60%. Sometimes the couple would ask for the bed pushed together, other times I just didn't want it to look like an I Love Lucy episode. (are you old enough to know what this means or have I hopelessly dated myself?)

I never got the foam bridge/topper bc I couldn't figure out how to store the giant thing when it wasn't needed. So, when they were pushed together they were next to each other but there was a dip there in the middle. I only had one guy (who was there alone!) complain that it was twin rather than larger bed. In the end, I made the shift bc my experience has been more preferable with the family groups. So, if the couple is more likely to book bc they have a queen rather than 2 twins then I like that.

Also, in my space I have an additional 8!! singles (2 daybed/trundles & 4 air mattresses) so if there are singles who don't want to share a bed then they have 8 other options.

From a hosting/laundry/make the beds perspective I prefered the twins, but still decided to offer what I thought guests would prefer.

[Matthew285]

@Kelly149, yes it makes a lot of sense to offer what guests prefer to have! 

(Seems obvious, but apparently that isn't at the top of some hosts thinking...)

I totally get the I Love Lucy reference! In fact, our youngest daughter (she is 11 now) enjoys watching them with my wife even now.

I like how you have such a variety of options for sleeping furniture!

I had not thought about how big that foam bridge thing must be. I will certainly have to consider the storage issue while thinking about how to furnish the new space.

[Kelly149]

@Matthew285 The foam bridge may not be too big, but I had thought that it would really need one of the 3-4" memory foam toppers over the whole setup otherwise it would still feel like two beds with a lump in the middle (maybe not, but that's what I thought)

So, are you making a new listing???

[Matthew285]

@Kelly149 yes, but not right away. Probably launch in May for June 1 availability.

The top floor of our house is (for historical reasons) set up very much like a one bedroom apartment adjacent to a two bedroom apartment. 

We have been listing the one bedroom apartment only so far.

The two bedroom apartment has been acting as a refuge for a friend whose place was damaged in a fire. They should be moving out in April, so we are working on getting it ready for AirBnB.

Hence the questions about bedding.

And we are so glad that there are so many experienced hosts willing to share their hard-won knowledge with us. We know that we are still rookies, and there is so much to learn.

I had forgotten about the mattress topper! Yes. Definitely have to get that if we are going to try the twins-to-king bed thing.

[Susan1028]

I have a 2-twin king in my guest room.  The big foam pad weighs in at about 80 lbs and is hard to move and fit in the closet even when rolled up...and you can still feel the ridge where the 2 beds meet if you know it’s there.

i have a queen in my Airbnb that’s only received complements from guests.

[Christina142]

Matthew,

The foam bridge and strap you listed above is exactly what I have for my property.  Along with King sized sheets and blankets.  I haven't had a complaint about the conversion system.  But, I've only had one guest (with three of the beds converted to kings.)

[Matthew285]

@Christina142 thanks for letting us know that the conversion system works!

My only experience with the whole "twin-beds-to-one-king" concept was when my mother took us on a cruise. Apparently all the cabins were two twins or one king, depending on how you moved the bunks around.

I am glad to hear the concept works in the hosting sense. It must be a bit of work to figure out what the guest wants and to have extra sheets and everything available.

I want the space to be flexible, because apparently different groups of guests have different priorities and needs. Who knew!

[Jessica-and-Henry0]

This is just purely my personal opinion based on gut feeling but IF I had a STR private home listing, I'd price myself and manage costs and expenses so that I can break even with a 30~40% occupancy rate while aiming for 70+% In the long run if I got repeated months with less than 50% occupancy I think I'd take a look at my competition to see if it's just me or a common trend.

If this wasn't a viable option, I'd probably rethink the STR path. Assuming the host does their own cleaning and turnovers, hosts should be making at least 15~20% more than compared to a traditional rental.

Just my 2 cents 🙂

[Marzena4]

@Christina142 The profitability of a place for STR depends on a few factors. The more you meet, the more popular you become with such guests. 

I would list here: geo location, local conditions (close to popular venues), storey (floor), type of place, condition of the property, pricing, amenities&facilities, host.

In high season, I calculated that STR might be three times as profitable compared to permanent tenants. It's for 100% occupancy, which I almost manage to reach in June, July and August, sometimes in September.

When I calculated the short-term rental in lower seasons, it's still more than long one.