Fun times are at-hand with the Airbnb Experiment. For a spell there, I was getting worried if I’d ever make money with Airbnb. No nibbles, no bites. My listing had been up for nearly a month and I figured I’d at least get an inquiry or two. One of my fine readers who lives in Michigan expressed some interest, so that made me feel good. At least the blog is helping the cause?
In the span of two days this week, Monday and Tuesday, boom. Two inquiries, and my first two bookings. I guess I just needed to wait until the holidays were over for people to start planning their next getaway.
The one thing I’m glad I did, was spend a little time over the break READING A BOOK.
You know how sometimes you find a book that has so much good information you end up dog-earing the hell out of the thing? That’s what happened with this fine read: Get Paid for Your Pad. Those first bookings are owed in large part to me taking the time to read and learn how to craft a good listing.
How to make money with airbnb: Let’s start with the listing
I’m still just a little paranoid, but am now mostly excited about the early retirement wealth that’s achievable with Airbnb. Here’s just a sample of the changes I made to my listing, thanks to “Get Paid”:
- Eliminated the security deposit. Apparently, deposits can be a turn-off for guests who might fear nitpicky things being charged back to them.
- Removed cancellation fees. I’m too new in this game to be restrictive with cancellations. My main focus needs to be getting guests in there and giving positive feedback. The more reviews I get, the more my listing will rise up in the search. Just like a new product trying to elbow its way into a crowded market, you gotta come in low to get noticed!
- Enhanced descriptions. It’s much better to evoke emotions when describing your space. Don’t simply say, “There’s two bedrooms and two bathrooms, nice hardwood floors, and a balcony to watch sunsets on.” An improvement might be, “Come back from a long day enjoying the white sandy beaches and relax on the sun-filled balcony with a glass of wine. Retire later to a master suite appointed with luxurious bedding and plenty of space to stretch out after a day of Northern Michigan adventure!”
- More flexible length of stay. I had my listing limited to one week minimum stays. But Airbnb is built on the idea of a quick stopover. Maybe one or two nights for most guests. In order to generate traffic, and more reviews, and ultimately more cash flow, I changed my minimum stay to one night. The book advises a maximum stay of seven nights to promote turnover and more reviews, when starting out.
- Accommodate parents with infants. What great advice! I remember when our twins were at that stage. It sure was nice to arrive at a hotel and have pack-and-plays already setup in our room for them. Along those lines, I plan to buy a pack-and-play for the condo, so little visitors can sleep safe and sound.
- Cut prices, at least initially. This is a key one. The book suggests undercutting the local competition to get those first few guests and some reviews coming in. Discounts of 20-30% are suggested. Whew! Now that that’s taken care of, I doubt you’ll find a better value until summertime rolls around.
- Lower the cleaning fee. I originally had a cleaning fee of $75, about enough to cover three hours of clean-up work. I’ve lowered it to $50, and will eat the $25 if there’s an extra hour needed to clean up. I’ve also offered my cleaning lady a $25 bonus for each 5 star review we achieve. Can’t hurt to offer incentives to ensure a super clean pad. If nothing else, the “Get Paid” book is clear on the importance of a super clean, spick-and-span experience.
- Over communicate, and respond quickly! I’m now poised to get back to all inquiries within minutes of receiving them. My phone goes nuts now with each one – notifications come through via the Airbnb app plus SMS text messaging and email. Bases are covered. So when I get an inquiry, I’m quick to respond, and respond with enthusiasm and detail. The more gracious you are throughout the process, the more likely you are to receive great reviews.
- Review your guests right away. This is a tactic that makes sense. Basically, put the onus on your guest to give YOU a good review, by beating him to the punch. Right after checking out (assuming the cleaning lady doesn’t find piles of empty champagne bottles, half eaten pizzas, and a stray tiger in the bedroom), give him 5 stars. And then, send a very nice note of appreciation for choosing your pad.
Pricing is hard work!
Airbnb puts forth a good effort to automate as much of your listing as possible, if you let it. They have a newish pricing engine that sets your nightly rate based on your local competition and, apparently, seasonal factors. Sadly, as I found out through experience (backed up by the “Get Paid” book), Airbnb tends to low-ball listings when using its Smart Pricing feature.
I ran into a bit of a wall trying to manually set seasonal rates. Airbnb is a bit limited in this regard. You can set a price by week and by month, but those rates only apply for 7 plus nights and 31 plus nights, respectively. My only option was to set prices day by day, in the booking calendar. Onerous defined.
Thankfully, this process isn’t too bad, once you figure out the sliders. For a while, I was updating day-by-day and thinking, “There HAS to be an easier way to do this!!!” Not so intuitively, Airbnb puts little handles on each side of the date window, which you can “grab” and stretch to cover a range of days and weeks. Whew!!!
And of course, you must use those “9”s as part of your “Most Significant Digit Pricing” strategy! “Get Paid” does a nice job of explaining the psychology behind the appeal of something that costs, for example $29.99, vs. $30. It seems our brains are subconsciously wired to believe that extra cent is actually more appealing. Okay, then!
The long-term rental inquiry
There was also a third inquiry this week. A very intriguing one at that. Seems a nice couple with an infant needs to find a place to hang for about a year, while they build their custom home (probably a lakefront property – the husband is a surgeon.)
Airbnb isn’t setup to manage rentals that long in duration. I would have to take the conversation offline and work through a lease agreement. However, Airbnb is really smart about keeping its clients from being able to do “back door” arrangements. Email addresses and phone numbers will be blocked out in their message exchange system.
It was all a moot point in the end. After I offered a monthly rent that was astronomical (to cover the lost short-term rental opportunity cost), they decided to find their own condo to buy! A very wise decision on their part. I even hooked them up with my local realtor.
A long-term lease would’ve been good with respect to zero turnover and consistent, reliable cash flow over twelve months. However, a long-term lease wasn’t the vision for this property. And besides, I’d like to carve out a week or so for my family to use the space this summer.
So, here we go – Time to get my buttocks in gear and get this place SET UP! I’ll be flying to Michigan tomorrow morning at the crack of dawn for four days of furniture assembly, bed making, and internet setup, etc. Whew. Wish me luck. There will be more (and very) impressive photos coming, after I’ve cleared out the mountain of Wayfair.com cardboard and styrofoam.
If you’re interested in becoming an Airbnb host, check out this link here.