Maybe you are on the fence. You have friends that have had a good experience with renting out their investment property on Airbnb. The numbers seem like they work out in your favor on a short term rental, but there is a lot involved.

What about logistics?

Do I need to furnish it? How do I list on Airbnb? Who will take care of the cleaning? Will people trash the property? Is the income stream really that much better?

Here is the thing, converting your long term rental to a short term rental is a lot of work. There is a lot of upfront cost and planning.

With that said, over time, you can figure out ways to automate and create systems that allow you to streamline your processes. Creating something that closely resembles a passivish income stream.

A Brief History of Our Experience with Airbnb Rentals.

My husband and I currently own five income properties that we rent out on Airbnb. All of these properties we formally rented out as standard, long term rentals.

We started with the first Airbnb in 2015. That property is a 700 sq ft one bed one bath. Because of the size of the home, we often had trouble finding tenants, specifically good tenants. It is a very charming little bungalow, but we had a lot of turnovers.

A neighbor of ours mentioned they had started renting out a property on Airbnb. We were intrigued. We did some research and decided we had nothing to lose.

The home had been renting for $895 a month. At $1.27 per sq ft in rent, we were above our state average of $.94. Of that $895 we were netting around $194 a month.

It took us a while to build up momentum on the first property. It was November when we first started. For those who are not familiar, Midwest winters can be brutal. Spring and Summer are our peak times.

That first year the home averaged $1,100 a month. Of this, we were netting $235 a month.

You may be saying, that is not much of a difference in your monthly net. It took a while to build up the host reputation and to start to get a rhythm with the pricing. We knew that the potential to increase the monthly net significantly was there.

As tenants vacated other properties, we converted them to short term rentals.

The Good

• The income stream.

The first year we were netting $205 a month. That was 2016. In 2018 we made $2000, of that we netted $804.

In my experience, these numbers do not happen overnight. You have to establish the home as well as yourself as a host. Once these two items are up and going and receiving reviews, it becomes a lot easier to keep the properties booked.

• You can frequently access the property.

By far, one of my husband’s favorite things about Airbnb.

With long term renters, if you are lucky, you get terrific tenants who maintain the property well and quickly let you know if there are any issues with the home. Unfortunately, this does not always happen.

We had a tenant mention during the move out after being in the house for close to two years that the upstairs sink had been leaking.

It was leaking and had been for a while. It had rotted out the floor underneath the vanity and the ceiling on the downstairs bedroom.

• You get to meet great people!

We have met and hung out with really cool people who have booked our properties.

The Bad

• It is tough to find good reliable cleaning people.

It has been my experience that most cleaning services are either one or the other. You find a great cleaner, but they are not reliable. You find a reliable cleaner, but they are not that thorough. It can be infuriating.

More times than I can count I have had to stop what I was doing and run over to a property to clean it because our cleaner just decided not to show up and we had guests about to check-in.

• One word here LINENS.

You will tear through linens like you never imagined. You will buy brand new towels, and find them covered in makeup that even bleach won’t get out. You will buy a new comforter, and the very next guest will spill wine on it. Hand towels will disappear.

Yes, some of these items you can charge the guest for. Often we have found this is more trouble than it is worth and we just quickly replace.

• 20% of your guests will be 80% of your headaches.

It is incredible how many things Pareto’s principle covers. For those of you, not familiar with Pareto’s law, often referred to as the 80/20 rule, it states that usually, 20% of your output will result in 80% of your result.

We have mostly had nothing but excellent experiences with guests on Airbnb. Almost everyone is friendly and respectful. However, that 20% can be a nightmare at times.

We have had the rager party, resulting in broken windows and filth I will not divulge. There will be guests whose only goal in renting an Airbnb, was to critique every aspect of your home. People will smoke weed in your house, and the smell can be hard to get out.

The Ugly

Honestly, most aspects of short term rentals are great.

The down and dirty is this; it takes more time and effort to maintain a short term rental.

If you live in a more metropolitan area, there are good management services for short term rentals. The downside is they will take a cut.

Time is money. If there were an option to turn over the management to a good company and payout 10% – 15%, we would definitely do it. It all depends on how hands-on you want to be.

The other thing is more and more great technology is coming out that is making the entire process that much easier and automated. We use a service called IGMS. This automates your stock responses and handles reviews as well. This is a page with great Airbnb resources.

For us, the additional monthly income and the flexibility we have with the properties make short term rentals a no brainer. They are not without their fair share of hard work and headaches, but that comes with any rental, short or long term.

As always I would LOVE to hear from you! Leave a comment. Do you rent your home on Airbnb? Are you considering converting your long term rental to a short term rental? Do you have additional questions not addressed in this post? Any and all questions and comments are wholeheartedly welcomed!

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