Problem with those other posts, it's impossible to search for your own posts @Kelly149 within another thread unless you remember the name of the thread. But thank you for thinking of me with regards to this.
@Ben205 - in the US you can write off as expenses, if you are sharing your home, not if it is a separate unit or whole house, a percentage of all household expenses as they relate to the percentage of space you give in total for the business. So we dedicate 17% of our home to the business 100% of the time. That means we can write off 17% of electric, gas, water, sewer, garbage, internet, property taxes, mortgage, home insurance, household maintenance, and household improvements. We should take deductions on the depreciation of the laundry machine, dryer, refrigerator, dishwasher and car that I use to do the shopping, but we don't. Additionally, we could write off lawn/yard maintenance too, but we don't. We write off all the material expenses related to doing laundry so, detergent, softener, whitener, spot remover, and dryer sheets. We provide breakfast, so we expense all of that against earnings (coffee, milk, half& half, sugar, cereal, fruit, bagels, etc). We expense any direct costs, like linen replacement, towel replacement, washclothes replacement (so many washcloths! Averaging replacing them about 8 a year). There is the cost of paper towels, toilet paper, cleaning supplies, including dishwashing soap, the vacuum cleaner bags, the garbage can liners, airfresheners and the candles lit for every guest upon arrival that need to be accounted for as well. Let's not forget the chocolates left for every guest - all expenses! The replacement linens are hardly a small fraction of the overall costs we take on to run our Airbnb business but when we were forced to replace the mattress and box spring - that came right out of the bottom line. Ditto to any other furniture and equipment including anything in the common areas of the home that are used by the guests (like your dining chairs need repair, the plates that get broken, the glasswear that needs replacing, the silverware that goes missing, the airfilters, carbon monoxide detectors, lightbulbs,....you get it.... ). Those Airbnb fees, they are also deductable since it is the cost of doing business on their platform. And let's just talk for a moment about how much TIME you spend keeping your profile and listings current and up to date. The time you spend chatting online with the guest about this and that - especially when that TIME is wasted and a cancellation happens. That expense of time gets rolled into the other guests, unfortunately. You must calculate the time you spend WAITING on them when they do not show up as promised.
So we need to add it all up and a $60/night room let to a guest for 20 hours/day comes to a cost break down of $3.00/hour in potential income before Airbnb fees or any of the above deductions (most people pay more than $3.00/hour in parking fees). At 100% booking, that would be $1800 (60 hours of booking time x 30 days a month). Sounds like a lot, doesn't it?! That would be $21,600/year for renting out your guest bedroom. But wait, let's start knicking away at that with all those expenses....Cleaning supplies for us last year - $720. Food $2400. Utilities (remember this is only 17% of our total) $1360. Mortgage and property taxes $3054 and we're left with $14,066. Sounds pretty good for income on our spare bedroom that we never get to use, not ever. So, ideally, my "income" was $14,066 less Airbnb fees (about $500). So we're at $13,566. A typical work week is 40 hours/50 weeks a year or 2,000 hours or for Airbnb income that's $6.80-ish an hour but let's be honest with our TIME - I spend about 25 hours a week on Airbnb so 1250 hours/year (25 hrs x 50weeks), so that goes up to $10.85/hour - definitely more than minimum wage. But the assumption is 100% booked at $60/night.... last year we were at 92% and my low on Smart Pricing is $39/night. Now I haven't gone back to figure out how many nights at my minimum we've booked, but Airbnb tells me over and over what I "typically" rent a particular day for and it's less than $60. But remember when I said suggested we rent the space for 20/hours a day - which is pretty normalish - you know even if you are spending only 25 hours a week "working" on Airbnb, you have to really be available for every minute that the room is being rented, right? At least available and responsive to needs, requests, problems, issues.... If it were a hotel, there would need to be at least one someone there every hour of every day.... So what sounds like a great hourly wage of $10.85 really breaks down to this: 20 hours/day x 7 days a week x 50 weeks a year = 7,000 hours of coverage time to monitor and care for your guests which is way more than a typical work week. That comes out to $1.94 an hour paid time to you if you keep the expenses to less than 35%. Costs come out, using the 7,000 hours of coverage to $1.08/hour (it's not like you turn off the heat or electricity). So paying yourself - $1.94 + $1.08 in expenses = $3.02/hour which is a 2 cent LOSS on every hour rented if you could actually pay someone $1.94/hour to work. That means you are not even earning $1.94, it's more like $1.92 to break even and if you have to buy a new $800 bed - that's almost 417 hours of earned income, or 21 days of "work" to pay for that bed.
Now some of you are going to argue that my given example figures aren't right.... I only care if my MATH is incorrect, based on the numbers I've provided here. I will not engage on IF a bed costs $800.... or that $2400 for breakfast food is reasonable.... it's my example, let's just leave it at that, shall we? If you want to see more of my math regarding any calculation, I'll be happy to provide that. I'm okay with being wrong with a calculation but if you don't believe that it's not "really" 20 hours because we sleep, etc., you are entitled to your opinion and I'm entitled to mine. You can recalculate based on whatever numbers you feel suit you and your situation to determine if your economics work for you. Thanks in advance for being respectful.
