Considering This

[Stephen630]

I am thinking about airbnbing my house.  I am not worried about extra guests sneeking in, stained sheets or late checkouts.   I am considered that the house itself will get damaged (scratched hardwood, stained carpet or counters).  There could be very expensive damages.  And my area is not a hot market.  If something major happens... it will possibly take all my earnings just to fix it.  I know there is always a risk... but what thoughts do experienced hosts have about house damage?  Does airbnb have insurance?  Seems like they do - but not easy to get much from them.

I just wonder if this is worth it when my price can only be $50 per night with a $15 cleaning fee in order to compete with those around me.

Can I avoid this by only accepting bookings from profiles with good reviews? 

Also, I feel many of the "trashed the place" horror stories come from places where people vacation and party (beach properties or big cities).  My city is not a party city lol.  Will that help the type of guests that airbnb?

[Robin4]

@Stephen630 

Hi Stephen and welcome to the Airbnb community forum.

Short term renting (STR) can be a wonderfully rewarding part of your life....or it can be one of the worst moves you will ever make! It all depends on your outlook, your expectations and the effort you are prepared to put into it. I would like to make a few observations.

1/......It takes a certain type of person to be a home host. You have to except that you lose the privacy of your space if you share it, or you lose the control of it if you don't. I am somewhere in between because I host in a seperate structure to the main residence on my property. But even so I still lose the unbridled scope of what I can do. I can no longer just walk out into the back yard a drop a fart or water a flower or two....you never know who will be there listening or watching....and I have been caught doing both!

If you can get your head around that Stephen, then great, your well under way!

2/.....Accidents will happen, nothing is fullproof but, when you set your property up for listing do it with a stranger! Do it with someone who does not live on the property. Things that will seem 'bleedin obvious'  to you, will be seen as totally strange to someone without your local knowledge of your space and your life. Try to alleviate damage risks, put a nice thick cloth over that glass top coffee table that guests are likely to knock or tip glasses over on. Put oraments to the back of shelves and not in traffic ways where they will get hit by that careless arm. If you have laminate kitchen benchtops buy a roll of plastic benchtop protector so the guests don't cut vegetables on your laminate, or put that saucepan straight from the cooktop onto the bench. A roll of benchtop protector is about $60....a new kitchen benchtop can be $5,000....which would you rather pay?? Have your carpeted areas professionally stain-guarded and form a relationship with a local drycleaner who can give you tips on stubbon stain removal.

3/.....Clearly set your guest boundaries! What they do have access to and what they don't. The kitchen seems to come in for the most complaints....the guest hops into your nice cheese or a bottle of wine......or that grain fed Aldi fillet you had in the meat keeper to cook up on the weekend! If possible give the guest a clearly defined shelf in the pantry and the fridge, but don't plaster 'post-it' notes all over the place. That's the quickest way to alienate a guest continually confronting them with things they can or can't do in the space that they have paid you for!

4/......Do not depend on having your back covered by Airbnb if something does go wrong! Deposits are not taken on booking! It is merely a statement that the guest may have some funds available should the host make a claim. Host protection is not insurance! It is an adjudicated system that may in some instances offer some percentage of compensation for damage, but goodness me there are some hoops to jump through and any compensation eventually awarded will take into account things like wear and tear. It is not an automatic 'new for old' claim system.

I have set myself up with an insurance to cover major events which has a chep premium but a high excess and for minor breakages 12% of my total hosting revenue goes straight into a damage fund and if something gets broken or lost I don't hassle the guest or Airbnb, I just fix it up and get on with the busines of hosting.

Don't expect someone else to be your fairy god mother! Airbnb are a booking agency, they put A (the guest) in touch with B (the host)......don't expect any more of them than that.

5/.....Lastly, or maybe it should have been firstly, work out if what you are proposing is actually going to be profitable. Airbnb are going to be all the time expecting you to drop your pants where price is concerned but the reason for this is not to secure you a comfortable living! It is designed not to let a prospective guest disappear to another platform. It is designed to make the guest an offer they can't refuse! Take no notice of pricing tips and set your listing amount as the the return you require in order to be a host. If the guests come, you will make a living, if they don't you will know it wasn't meant to be and you will be better off by not going forward.

Don't think you can make it work.....Know you can

Before you set a listing price, use this profit and loss sheet to realistically work out if your venture is going to work for you.......

Stephen, this is so important!!!

Too many hosts think they can just 'wing'  it and everything will be alright.

I make a good return on my investment with my listing because I did this exercise. Here is my profit and loss which tells me exactly what I can spend and what I can't.....

You can see from that sheet that my profit is around 60% but in fact it is actually better than that because I do get to write-off expenditure and at the end of the year, my nett profit is around 67%.

But don't leave this to chance Stephen. I love my hosting and I have a great profitable experience but only because I have set it up that way.

All the best Stephen.

Cheers......Rob

[Stephen630]

Wow.  You are so kind to put this all together for me.  I am very appreciative.  I need to spend more time going through each item on that list.  That is cool that you have a budget for damages and you just fix things up and move on.  I guess damages are easier to handle if you have a plan in place.  If it is not part of the plan... then it is tragedy every time.

[Sarah977]

@Robin4  Funny that you guys over there call it a benchtop. In Canada and the US it's called a countertop. A bench is something you sit on.

[Robin4]

@Sarah977 

I have been to plenty of parties here where the guys sit around with their ars*s on the 'countertop' ! :-))

Cheers.....Rob

[Rachel0]

@Sarah977 @Robin4 English is a funny language.  We call it a worktop.  Benches are for backsides and a counter top is found in a shop.  Excellent response to the post Robin!

[Robin4]

@Rachel0 

And we call a toilet a 'dunny' here, so there you go.

I did not address some of @Stephen630's issues but, you have to stop somewhere. I felt from the tone of Stephen's post he was not sure if what he wanted to do would be worth it so I concentrated on giving him a framework to make that decision before he got involved with who he should be accepting as guests.

Rachel, we are still in the grip of summer here 30c + every day this week and no rain on the horizon. We have had 7 mm of rain since the 8th December last year and although (from a city point of view) we are ok, the poor countryside is looking severely water starved.

It's nice not to have to get the 'woolies' out though!

Cheers......Rob

[Stephanie]

@Rachel0 

Haha! I'm also English and we've always called it a work surface! 

[Paul154]

@Stephen630 

Your question is a very important question.

In a perfect world, a unit for renting out would be designed and built for this purpose. A rented-out space will have different demands upon it - easy to clean, difficult to destroy, basic and cheap.  A residential owner-occupied space has different demands - luxury, high quality amenities.

If you can't get the increased revenue to cover your risk, a residence will suffer from renter abuse and you will become poorer 😞

Do not despair. Your laissez faire market study of your competitors rates might be flawed. Your competitors may somehow getting more revenue than you believe. I.E. cleaning fees, week-end pricing, per guest fees, holiday pricing.  Your belief that your area is undesired may be incorrect.

You also will learn to not care about your precious floors, carpeting and countertops. You will learn that they are replaceable and repairable for less money than you think. 

Good luck. You are asking the correct questions

[Stephen630]

Thanks so much for the good words of advice.  I need to look at my competitors more closely perhaps.