Should I Airbnb My Spare Room
We were talking about our success at Airbnb and thinking about what we would answer if someone asked “should I Airbnb my spare room?”
Airbnb provides an opportunity for you to make extra money from spare rooms you have in your home. If you have a spare room, like having people around, and don’t mind a little work, maybe you should host your spare room on Airbnb. This post explores things you should consider before you decide.
To help decide, consider how much you can make, what you would do with the money, h
ow it would affect your life, what you would have to do to get started, and how much you need for it to be worth it for you.
How Much Can I Make?
Hosting a private room on Airbnb is a great way to make extra money, but it’s not a get rich quick scheme. The amount of money you can make depends on what you have to offer and what people are willing to pay for it.
What you have to offer includes the size of the room, what attractions you live near and what amenities you offer.
Size of the room: If the room is big enough for at least a double bed you will make more because you will be able to host two people. If your pictures show a writing desk or make-up table, guests will be willing to pay more. If your room is bigger you might be able to charge more.
Attractions: You can charge more if you are close to tourist attractions like museums, art galleries and zoos. Attractions also include hospitals, shopping malls, restaurants and parks. Are you close to a sporting venue or other place where special events take place? What about airports, bus terminals and main access roads in and out of your city? Guests are more likely to stay with you and to pay you more if you are close to more attractions.
Amenities: You can also make more if you offer more amenities. This may include a bigger bed, use of the kitchen, dining room or TV room. You can also charge more for outdoor amenities like patios, decks and swimming pools. You can also charge more if you have a private bath. If we had had a bathroom in our master bedroom, we might have listed the master bedroom and kept one of the other bedrooms for ourselves. We didn’t have this option, but you might.
You also need to know what people are willing to pay for what you have to offer. This will depend on where you live. You can expect more if you live in New York than if you live in a smaller, less expensive city.
What people are willing to pay will determine what you are able to charge, but how much will that be? You can get a good idea by looking on Airbnb to see what other hosts near you are asking for places like yours.
Could You Use The Money?
Well, who couldn’t use some extra money?
Have you ever thought about the difference an extra five hundred or thousand dollars each month would make to your life?
This would be a great time for you to sit back and imagine what it would be like if you had that extra money. We all know that we would like to have more money, but it’s good to have a goal. Something that you would like the extra money for. It doesn’t matter whether it’s helping with the bills; buying a new car; or planning for your retirement.
In our case, we needed to have a positive cash flow to cover most of our mortgage to make it worthwhile. When we did the calculations it looked like we could make enough by hosting two rooms. Knowing this motivated us to do what we needed to do.
Knowing what you want the money for will make you more willing to do what you need to do.
How Will It Affect Your Life?
Becoming an Airbnb host will have both positive and negative effects on your life. The extra money you will have coming in will require extra work. Consider how it has affected our lives:
- We meet lots of new people and share their adventures.
- We launder their bedding and towels.
- We make extra money.
- We are sometimes woken by guests arriving or leaving in the middle of the night.
- We can deduct part of our living expenses.
- We sometimes have guests with unreasonable expectations.
- Some guests cook or bring food for us.
For us, the advantages outweigh the disadvantages.
Money: Most people wouldn’t do this if not for the money. As mentioned above, it is a good idea to know what you would use the extra money for. What would you do with it? Will the money and other advantages outweigh the inconveniences and extra work? Will the advantages keep you motivated to succeed?
Sharing: If you enjoy having guests in your home, being an Airbnb host can be very rewarding. We have met people from all over the world and enjoy hearing about and sharing in their adventures. If you like meeting new people this is more likely to be for you.
Work: There is work involved. You may find yourself doing more laundry than you thought you would ever need to do. You may do more cleaning than you would do if you weren’t preparing for new guests. You can hire these things done for you, but if you do it will cut into your profits.
There will be a few times when you wonder what you got into. In our experience, those are few and far between. Airbnb guests are several notches above your typical hotel guest. The vast majority of guests are grateful for an affordable place to stay. They are courteous and thankful for what you do. Airbnb has systems in place to help hosts with problem guests. More on that another day.
We found that as we got used to having people in our home we enjoyed the experience. It was worth the bit of trouble we’ve had now and again.
Late And Early Arrivals
Can you live with people coming and going at all times of the day? One of the challenges of travel is that not all airplanes arrive on time. Not all buses arrive on time. Even if you’re driving, things don’t always happen according to schedule. To help our guests with these challenges, we allow people who arrive at all times of the day and night. In later posts will describe how we manage that with locks and self checking procedures.
When we hear people punching in their access codes at our front door, we know they are supposed to be there. Often they come in and find the rooms without any help from us, but sometimes we have to help them out.
We only allow guests whose identity has been verified by Airbnb. This makes it easier for us to be comfortable when strangers are coming to our home. Usually, when they arrive late or early, they are grateful that we allowed them to check in anyway. So, they are as quiet as they can be so as not to disturb other people in the house.
If you are not comfortable with having people arriving while you are sleeping, you can make house rules that they can’t check in if they are late. Before you decide that you should be aware that:
- Not all guests read all the rules ahead of time.
- If they arrive late and you turn them away they may leave you negative reviews.
- If they know they may be late and that you won’t allow late check-ins, they may just book somewhere else.
Are You A People Person?
If you like meeting new people you are more likely to like being an Airbnb host. People from all over the world all walks of life have stayed with us. Some guests are rarely seen because they stay in their rooms or are out most of the time. Others save money by cooking in our kitchen and eating their meals in our dining room. Some even cook meals or order in extra food so they can share their culture’s foods with us.
We enjoy figuring out how to communicate with people whose first language is not English. Some are easier than others, but because we enjoy it we can always manage to share ideas. When you go to the trouble to do this, guests appreciate it and feel welcome.
What do I have to do to get started?
As you are getting started you will need to consider whether you have the room to spare, what you should do to get your space ready, and what regulations you need to follow in your community.
Do You Have A Spare Room
We’ve been successful by hosting a couple of bedrooms in our house on Airbnb. We listed each one as a private room with a shared bathroom. To do this, you need at least one spare room that you can turn into an Airbnb listing.
You can create a listing on Airbnb if you don’t have a spare bedroom. For example, you can list a couch in your family room or living room. We don’t have advice about that option because we haven’t done it. Some hosts list an entire house or apartment, which may have other things to consider.
Guests who book a private room expect a clean, comfortable, cozy room. They expect to have room to store their personal items and to be able to lock the door when they are not in the room.
In our case, we are a married couple living in a three-bedroom home, so we had two spare rooms to use. To follow our example, you will need at least one spare room.
Getting Your Space Ready
You need to decide which room to list, keeping in mind the larger the room the more money you can make. As mentioned in the section about how much you can make, be sure to consider which room is most suitable.
Is the room set up so people will pay you to stay there? The nicer it is the more they will pay. You might need to add things like a comfortable bed, a desk, lighting, mirrors, pictures. If you can, add accessories to make the room look welcoming and comfortable.
We redecorated our home by painting, new flooring, upgrading the kitchen and bathroom. We did this to make our place more modern and attractive for guests and it also made it more comfortable for us.
Know Your Local Regulations
Before you get started, you should make sure you know your local regulations. Some places don’t allow Airbnb or have restrictions on what you can or can’t do. You don’t want to spend a lot of money and time to find out that you can’t become an Airbnb host. Be sure to take the time to know and follow laws and government regulations.
Starting out in a place that doesn’t have regulations yet makes getting started easy but is also a bit risky. What if regulations that come later don’t allow what you are already doing? But, if you are paying attention when regulations are passing, you may be able to have a say in which ones get passed.
If the place you live already has regulations, be sure you follow them.
How Much Do I Need To Be Worth It
Don’t forget you will have to pay taxes on the earnings from your Airbnb. You can charge your guests for sales or occupancy taxes, but you should consider income taxes.
Disclaimer: We are not accountants and we are not giving tax advice. Contact an accountant for advice specific to your area.
In most places, you won’t pay tax on everything you bring in but only on the profit you make. You can usually subtract expenses from income before figuring out your taxes.
You may be able to subtract some expenses you have to pay whether you are running a business, or not. You might be able to subtract part of your utilities, mortgage interest and repair costs.
Disclaimer: We are not accountants and we are not giving tax advice. Contact an accountant for advice specific to your area.
In our case, we ended up having to pay taxes on about half of the money we actually brought in.
Before starting, why not figure out what you think you can earn and what expenses you will have. You and your accountant can figure out what your profits and cash flow will be.
Having read this, you should be better able to decide whether hosting a private room will be worth it for you.
Questions
Our goal is to help you succeed at Airbnbing your spare room. We would love hear from you with other question you have for us to answer. Please contact us or comment below with your questions.