As most of you are well aware I am always looking for new, easy and fun ways to make money. In fact, that’s one of my passions in life: making money by doing things that I already enjoy. And since I started my rideshare site, I’m obviously now very involved with the sharing economy. So today I wanted to post an article that I wrote about Airbnb. I think Airbnb is a great way to make a little extra money or even a lot of money if you have the capital to buy a property. There’s definitely some risk since it’s such a new and innovative form of ‘being a landlord’ but I think the reward more than justifies the risk.
Here’s my post:
Similar to my rideshare journey, I started off with Airbnb on the customer side of things. Over the years, I’ve used Airbnb to stay at properties in Hawaii, San Francisco and Santa Barbara. And what initially attracted me to the service was the fact that Airbnb properties were significantly cheaper than renting a comparable hotel room.
I’ve actually never been a big fan of paying for travel (as evidenced by my numerous articles on ‘travel hacking’) but when I do have to pay for a room, I prefer to use Airbnb. Among the many benefits on the consumer side, there are actually just as many on the owner’s side. Today I’m going to detail a few of the ways I’ve made money off Airbnb and also present some unique strategies that some of my friends have been doing to make money off Airbnb too.
1. Rent a room
Airbnb actually started as a way to rent just a single room for a day or two during high demand events but today most people use it to rent out their entire home (In fact, there’s a really interesting podcast with one of Airbnb’s founders if you’re interested in learning more). Although most people don’t use it anymore for renting out just a single room, there is still a lot of money to be made if you don’t mind bunking up with strangers for a couple nights.
As an owner, it’s tough to charge an exorbitant amount for renting out a single room in your house because if you charge too much, hotels will be able to undercut your pricing. Most people charge anywhere from $50-$100/night for a single room and that can definitely add up over time. If you rent out a room during big festivals or special events, expect to make even more.
2. Rent out part of your house
As a landlord, I can tell you that one of the most time-consuming parts about owning a property is always having to drive back and forth to the property (it really doesn’t help when you live an hour away either!). But a lot of Airbnb owners mitigate this problem by renting out their back house or sectioning off a portion of their home so that their guests have privacy but the owners are still right on the property.
I even stayed on an Airbnb farm rental in Nipomo once where the owners would retreat to the back house whenever they were able to rent out the main house. Customers like me love Airbnb because you can truly stay at some unique places. This house that we stayed at had pigs, llamas, chickens and various other farm animals running around the whole time. Although it was technically a farm house, the inside was beautiful and since we had 10 people staying in the house it was only 75$ per person per night. It was one of the nicest rentals I’ve ever stayed in and it was the same price as the local Holiday Inn!
3. Rent out your house during holidays and big events
Although I don’t know any drivers who do it, I suppose you could only come out on July 4th, make a quick $1,000 and call it a year. As I demonstrated in episode four, there is a lot of money that can be made when demand is high and supply is low. The same theory applies to Airbnb during huge festivals and special events.
I have a couple friends in New Orleans who actually rent out their place during Mardi Gras and go on vacation for two weeks. The Airbnb rental pays for their mortgage while they’re gone and their entire vacation every single year!
Just like with Uber’s surge pricing, when demand is high, the price must go up. So when you have a huge event that is bringing hundreds of thousands of people to a city with only 50,000 hotel rooms, Airbnb is the perfect solution to fill that supply gap.
If you live in any of the following cities, you should definitely consider renting out your house during the following festivals (obviously there are lots more but this is just a quick sampling):
- New Orleans – Mardi Gras
- San Francisco – Bay to Breakers
- Austin – SXSW
- Palm Springs – Coachella
- Miami – Ultra Music Festival
- San Diego – Comic Con
4. Rent out your house when you’re out of town
Most of the time when you travel for work or even for vacation, your home just sits there completely empty. One of the smartest ways to take advantage of this empty space is to list your home on Airbnb only when you go out of town. Since you know your dates ahead of time, it should be easy to list your place and make a quick buck while you’re gone. Now obviously you have to be ok with strangers staying in your home for the weekend but maybe that will encourage you to live a minimalistic lifestyle 🙂
I’ve never actually rented my place out but I did rent an amazing property in San Francisco for the weekend of my bachelor party. The owners were going out of town for the weekend and we booked it last minute so they were actually happy to have us. All we had to was feed the cats. We ended up staying in the nicest Airbnb property I’ve ever stayed in: it was a 3 million dollar home in Cole Valley and the total cost ended up being only $150/person.
It was totally worth it for the owners too since they made a couple thousand dollars off the whole transaction and we fed their cats. And since we checked out at 11 am, that still left time for a cleaning crew to come in and do a thorough scrub-down before the owners returned home that evening. Even with a bunch of rowdy guys, we still left the house in great shape and after a quick cleaning, the owners probably didn’t even know we were there (other than the $2,500 sitting in their bank account).
5. Buy a house and rent it out
This is probably the most risky way to make money with Airbnb right now but it also has the potential for the highest reward (remember risk and return are always related). If you can find a property in a desirable area (think beaches, downtown metros, etc) that is a good buy you may be able to rent it out via Airbnb and cover your mortgage and then some. I have never done this before but it is definitely something I am currently considering. Since I live in a beach area, the best time to buy is right before the summer run-up.
As I discovered this summer while trying to find rooms to book for our wedding block, hotel rooms are insanely expensive during the summer. I couldn’t find one 3-4 star hotel in all of Santa Monica for under $350, we’re not talking Ritz Carlton or the Fairmont either. I’m talking about Courtyard Marriotts and Doubletree’s that were priced at $400+/night during the summer. Obviously there are going to be a lot of people who want to visit but can’t afford anything close to that. If you charge only $200/night for a 1 bedroom apartment that would be close to $6,000 of income if you can sell out every night during the summer. Things will likely slow down in the winter but I know several people who made enough during the summer to cover their mortgage for the entire year.
Airbnb For The Win!
So there you have it, those are the top 5 ways to make money with Airbnb. If you’re considering renting out your room, apartment or house via Airbnb I recommend you try it out as a customer first! That way you can see what it’s like, how the rating system works and whether or not you think it would be worth it for you to rent out your own place. And if you sign up using my referral code, you’ll get $25 off your first stay!
Sign Up And Rent Out Your Home Today
If you’re ready to take the plunge and rent out your apartment or house, you can sign up here. I receive a $75 commission for every person that signs up using my link and successfully rents out their home.
Readers, what do you think about this opportunity to make money in the sharing economy through renting out your house/apartment? Does it sound like something you’d be interested in or does the thought of renting out to a stranger really put you off?
This post originally appeared here.