Cleaning Fee / Operation Cost & Room Rate

[Rafael579]

Hi,

I'm thinking to take 3 of my rental properties and set theu up for Airbnb.

I checked Airbnb prices around my properties (similar properties) and all are running in a price rage of $30 - $49 (Including cleaning fee, tax etc.) Per Room / night (all my properties are 3 rooms)

I mean there are also small 2 /3 stars hotels who's charge $45 - $60 / night...

If that's going to be my price point and I'd like to automate as much possible and use cleaning company etc. 

How can I actually be profitable Vs long term rent ($900/month) if I guess most of my income will go to the cleaning company???

Do I misse something here?

[Maj-Britt0]

hi Rafael, I would recommend that you do the math and set your own base fee so that you are satisfied. I have 2 apartment, basically the same, same location and abb has a recommended price difference if almost 30 euros- I would actually be paying to have guests stay with these prices- you can add a cleaning fee, this for me is actually more a short term visit fee plus our local “bed taxes” that I have to pay.

good luck, mb

[Rafael579]

Hi Maj, Thx for your reply, i can definitely try but if I'll be higher than everyone and become irrelevant.
My properties in the US and started to look into cleaning cost (online) seems that it's cost as the rent.
Not sure how others which are not homeowners, doing this?
I mean the sweet spot for travelers are rooms between $30 - $70 / night.
How could you be profitable if after every night or two you need the cleaner to setup the property again?
seems that hosts charge $3-$8 cleaning and tax fee per night, not sure i understand the math if cleaner cost at least $50.
Again...unless you're leaving there...
???

[Rafael579]

unless you live there

[Paul154]

@Rafael579 

High season keeps us rolling in the money.

Most of us bide our time during the low season just covering expenses. But we double/triple our prices in the high season. Risky business yes. 

Airbnb takes more time and management.

If I did the math and considered my time as money, Airbnb makes only a little more profit than long-term rentals. 

But I hate long-term rentals. The idea of renting to deadbeats who abuse my property and manipulate me in every interaction makes me clinically depressed 😞

@Rafael579 , you have 3 properties. Why not experiment with one property first? Start in the low season so you can hone your skills. If you like it, then plunge all in for the high season.

[Rafael579]

I also hate the long term rentals (same reasons...)

I was thinking on trying one...but I'm always between flights and can't be there at all..that's why i'm hesitating if to start at all this unknown journey

[Rafael579]

I have seen some videos and read about the method of renting properties from other people under long term contract and rent those properties under airbnb and cut high profit (double the rent you pay)

So I'm asking myself, if i can't see the numbers very clear while I'm the landloard, what is going on here??? 

[Paul154]

@Rafael579 

The fact that you are "alwlays between flights and can't be there at all" will definitely raise your expenses.

If your rental is easy to maintain (everything works) you can hire a management company or cohost.

Of course, these professionals will not have your interest 100% at heart.  They too will manipulate you with every interaction.

Some hosts here do the housework themselves and pocket the money. I hire cleaners, but do all the maintainence and administration myself. This is how we keep expenses low.

I don't know where you are, but your $30 - $70 hotel sweet spot seems very low. Tourists have money and will shell out much more for a stand alone apartment. That $30-$70 hotel room is ONLY a bedroom. A stand-alone apartment has a living room, kitchen, space which demand a premium. 

You need to do more market studies. Compare your rental to a comparable Airbnb or hotel suite. The ACTUAL number (not advertised price) during a high season weekend. Also, stay at some Airbnbs.

As a long term landlord, Airbnb still can have a place in your real estate empire. Airbnb can reduce your financial risk inbetween long-term tenants. You know, that period of time when you are shelling out money with no money coming in and you don't know when that money will once again start to come in. 

With Airbnb, you can have some money coming in , work around your maintenence projects and still show the apartment to prospective long-term tenants. You won't get financially desperate and foolishly accept a bad prospective tenant, cuz you want the revenue to start again. Win-win

[Rafael579]

Thanks Paul