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5 Things to Know Before Airbnb-ing Your Vacation Home

Photo credit: Maskot - Getty Images
Photo credit: Maskot - Getty Images

From House Beautiful

If you’re investing your money in a vacation home, the hope is that you’ll eventually be able to make some of it back. Depending on the location of your house, you might be able to (occasionally) rent it to help cover some of the cost. While you're not vacationing there, of course.

“Having a home in a popular destination suggests the potential to rent it out, or rely on Airbnb to make back some of the cost of the home,” says Daniel Rusteen, owner of OptimizeMyBnb.com. “And while it’s possible to make all your money back on the home by choosing to Airbnb it, it’s definitely not as seamless as one might think.” Below, he shares his insight behind everything you need to know about the reality of Airbnbing your second home.

1. Figure Out if You'd Be a Good Host

"In all honesty, you should be looking at this as a kind of second job,” says Rusteen. “It’s possible to make all your money back, but it’s not as easy as you think it might be.” The job he's describing entails everything from marketing the home to providing customer service to even working out the long-term finances—you can’t simply assume that you’ll make money by renting if you simply take a few decent pictures and put your listing up. “People look at everything from amenities to how responsive the host is, so if you’re looking to be fairly hands off, this probably isn’t for you,” he explains.

2. Know Your Income Will Fluctuate Drastically

“In peak season, you may have many customers, but come other months, you may have nobody at all,” says Rusteen. This is especially true if you plan to stay in your home for a certain amount of time during peak season—you’ll be eating into what could be valuable earning potential. “It’s also not guaranteed you’ll make the same amount in the winter and summer, so you should actually be increasing and decreasing your price by five to 10 percent at various increments, depending on your calendar occupancy, with a maximum factor of two,” he elaborates.

For instance, this means that if you charge $100 a night in the winter for a summer home, you can charge up to $200 for it in the summer—but you need to increase this price slowly. As demand rises, you can keep bumping your price. However, note that every summer won’t be the same, and you may not always hit that $200 number as often as you might like.

3. Be Prepared for Competition

“You need to make sure your cover photo and title stand out,” explains Rusteen. “However, if your home is in a popular location, know that this doesn’t automatically mean you’ll get people staying in your home over someone else’s, especially since other hosts may be more popular or reputed on the site. I’d recommend first starting to list your home for about 10 percent less as compared to similar properties in your area, and then also working to get as many reviews as possible before you bump it up.” Rusteen also suggests looking around and researching how your competition stacks up in terms of service and amenities every month, so you’re optimizing your home’s potential.

Tip: List your house for 10% less than other homes in the area, to start.

4. Expect Some Troublesome Guests

While we all want to believe that every guest will be perfect, you’re going to have people who show no respect for your space. “Make sure your valuables are locked up, and that what you do have can be replaced without much effort or cost,” says Rusteen. This isn’t to say decor isn’t important and you need to decorate your gorgeous home with poor-quality items, but it’s safe to assume wine may just get spilled on your pristine white rug! So, storing everything you love in a storage unit before you leave your home to guests is probably a safer bet.

5. And Some Unforeseen Costs

“Honestly, the biggest cost is how much time you spend on this process,” says Rusteen. “People don’t consider that they have to be a better host, and be prompt and respectful to all customer demands. But there are other costs—maintenance costs, unforeseen costs caused by guests breaking devices in the home, cleaning costs—that all factor in, and you don’t really know how much they’re going to be each month.” This all depends on how many guests you get per month and how much you’re willing to pay for replacing sheets and other amenities like toiletries and kitchen ingredients. So, it’s important to realize you’ll be spending a significant amount per month in order to get people to stay in your home in the first place.

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