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Referral link: If after reading this post you decide to become an Airbnb host. Please follow this link. Each one of us will get a $100.00 bonus. This is a big bonus considering that I don’t make any money writing this blog. Thanks for your support.
I always try to optimize my life in order to create more passive income. Any active income is then invested in other passive activities so the money can have the opportunity to last forever.
By the way forever for me is about 42 years (15,000 plus days). Thus, in reality, nothing is forever because everything has an ending, which is a good thing. Having a finite ending gives me an opportunity to strive for success because time is limited and I will eventually die. Dying for me is just like any other stage in life and I am not too concerned about it. Getting back to Airbnb experiment.
We have used Airbnb during our vacations and have enjoyed our time being guests in other people’s homes instead of hotel rooms including super high-end ones. Sleeping in separate beds in separate rooms for us is one of the keys to having a good vacation experience. Being crammed in a one hotel room or a large suite is just not fun anymore. Not to mention that while staying in Airbnb allows us to have access to laundry, kitchen, and many other similar amenities that a family needs.
After having an excellent experience of being a guest in someone’s else’s home. I always had in the back of my mind that it would be rather interesting to become a host myself. After all, we have a large daylight basement available that is hardly being used.
Earlier this year my wife was planning to visit her parents with our children out of state. I thought it would be a great time while they are gone to rent out on a short-term basis our newly remodeled and barely used basement on Airbnb. The conversion to an impromptu hotel would not be hard or expensive.
Costs to prepare the extra space:
In May, I started to look on Craigslist for various items such as bedframe, small desk, vanity, chair, and etc. Our basement didn’t have a kitchen, so I decided to build a kitchenette. I have never build a kitchenette before. Not a problem, I will just learn as I go. Here is the picture of my final product. It was an easy build and it didn’t take long at all.
Here is the rest of the stuff that I bought mostly from Craigslist and few things from boxed stores.
Listing on Airbnb.com
I knew in May that we will have an empty house and an empty basement for 3 weeks in August. So, I decided to list our unit with only one picture because I had only one bedroom finished. To my surprise a few days later one confirmed booking came through and nothing was ready except for the one bedroom. Next several weeks in the evenings and weekends, I worked diligently on the basement and uploaded pictures of areas as there were being completed. The original booking canceled, which was okay with me because I got more bookings already.
Sometime in June, I accidentally stumbled on BeyondPricing.com. This company is pretty neat and I believe they are far better than Airbnb.com currently has to offer as it relates to dynamic pricing. As soon as the minimum and maximum price was set by me Beyond Pricing took over. Again to my surprise, price variance based on demand and occupancy fluctuated daily from $70.00 to $120.00 a night sometimes with even $.50 increments. There is no way that any individual including myself would be able to manually and accurately predict market supply and demand curves.
August Hosting Results: Spectacular!!!!
Success will happen as long as you will capitalize on an opportunity. Moral to a story: Just try and you will eventually succeed.
While my family was gone, we earned $1,473.43 from an empty space. We never earned less than our $70.00 minimum and couple of times we were close to $120.00 per night. These results are spectacular. You might quickly calculate that our net earnings were $247.08, which is accurate, but there is more money than basic math showed here.
The new kitchenette is an improvement to the house which will cause the value of the house to increase. The items that I bought from craigslist I could easily sell back and get my money back. I learned how to be a host.
These are spectacular results. Airbnb gave us an opportunity and we simply capitalized on it for a brief time. Our occupancy was nearly 100% and it was neat to meet people from around the world.
From now on we will always rent out our basement during the time we are not at home.
Investment of Earnings:
This is where I invested my money:
- JPMF – 2 shares – $48.70, yield – 5.84%
- ABR – 2 shares – $24.22, yield – 8.31%
- AFL – 1 share – $47.00, yield – 1.98%
- VT – 1 share – $76.47, yield – 2.26%
- GLDI – 1 share – $8.22 – 6.25%
Total investment: $204.61 with the expected yield 4.93%, which comes up to $10.08 on annual basis. The yield is unusually high so I purchased some shares that are should have a low correlation to the market when it corrects.
I still have $678.82 to invest. I will likely purchase one new queen size mattress and look for other investment opportunities.
Thanks for reading.