@Linda108
I know most hosts are in it for personal income, but we put the vast majority of the money back into the house in the form of structural and living space improvements. The intent is to incrementally add value to the property over time to maximize our gains when we sell it at some future date.
This has clear benefits beyond simply increasing the value of the property.
1. As you mention, tax write offs. Just about everything is tax deductible.
2. Increasing revenues. Oh, yes. It does make a difference. We've been steadily increasing our nightly prices year on year, and the guests are eagerly paying it. I have to believe this is due to consistent over-delivery (the accommodation consistently exceeds expectations, because it's always being upgraded), resulting in glowing reviews, which ultimately, gives confidence to those willing to spend more...
3. Yes, there's personal satisfaction that comes from nurturing something successfully. It just feels good.
But I'd point out that this strategy isn't for everyone. It's a lot of work 😐