Money blog: What I learnt from putting my home on Airbnb (2024)

'One guy wanted to rent my room for a few hours to meet a friend...' What I learnt from putting my home on Airbnb

By Megan Baynes, cost of living specialist

It's 9pm on a Tuesday and a stranger from Shanghai is cooking in my kitchen. I can't speak Chinese, and she can't speak much English, so we both had to mime when she asked me where I kept the knives and the salt.

I hadn't met this woman until 24 hours earlier, but she is staying in my home for another four days - and it's all thanks to an advert on the London Underground.

"Turn your spare room into cash using Airbnb!" it promised. Well, I am lucky enough to have a spare room, and I never seem to have enough cash (thanks to a litany of rising bills and wanting the occasional holiday), so could this be the answer?

I forced my husband to spend a weekend clearing out our top floor room and soon I was photographing away, artfully framing different corners of the space to try and show it off (not helped by my cat, who refused to get out of the way).

After downloading the app and signing up, I was paired with an Airbnb Superhost who gave tips and offered support as I made my way to my first booking. He advised that instead of offering an introductory discount, as the app encouraged, the best way to drum up business was to look up the price of local listings and then undercut them. Once I had built up a few reviews (I was aiming for five stars) I could then raise my prices.

My neighbours were listed between £40-55 a night, so I hedged my bets and started at £35, with a £10 cleaning fee. Within 24 hours, I had my first booking. A young borderforce agent was doing training at Heathrow and needed a place to stay. We gave him a set of keys, told him to make himself at home and five days later, we were £117 better off.

After several months of hosting (and - not bragging - ten five-star reviews) we are now almost solidly booked at any given time.

Tips for smooth sailing welcoming strangers

I have a pretty good weirdo-radar, and when it comes to letting people inside your front door, it pays to trust your gut - I have declined bookings simply because I got bad vibes.

The guy who wanted to rent my room from 9am to 3pm to "meet a friend from London"? Nope.

The man who wanted to stay for three months? Not for me.

A young gentleman who promised to pay me cash on arrival? Thanks but no thanks.

(You'll notice a common theme with these - as I often work from home alone during the day, I'm not taking any chances).

Touch wood, everyone who has arrived has been friendly, polite and, most importantly, not smeared faeces on the walls, tried to remove the sink, or done any other Airbnb horror story.

How to get good ratings

Did I mention we have five stars? I don't think there is any real secret to getting a good rating, but I tried to think what I would want checking into someone's home. Make sure you have high-quality photos that match what the room is actually like; don't go crazy with the filters.

We always make sure the place is clean, well presented and clutter-free. Small, thoughtful touches like a TV with a Sky box, a box of toiletries, and a coffee machine also go a long way.

I am also very upfront about the fact we have pets - the last thing I want is someone with allergies to book (and give me two stars!), so Louie sits front and centre of the listing.

The pitfalls to avoid

After the success of Airbnb, I decided to go one step further and list our room on Booking.com. Their management platform is clunky, difficult to use and you can't vet people who book - they just instantly book and that's it, you're stuck with them. It's also a bit of a faff double-checking both platforms to make sure you aren't accidentally double booking. But it does generate significantly more bookings for us that Airbnb.

As boring as it is, you also need to consider the tax implications. The good news is Airbnb isn't taxed like Vinted or eBay (which has a £1,000 tax-free allowance).

If you rent a furnished room in your primary residence (ie not a second home) you can claim Rent-a-Room relief. The threshold for this is £7,500 per year (or half that if you share the income with your partner). The tax exemption is automatic, which means if you're below that you don't need to do anything - but if you're earning above that, you'll need to fill out a tax return. Given we are earning around £350 a month from our room, we will fall way below this.

I convinced my mum to list her guest room on the platform, and she has also had decent success (excusing the girls who threw up in her bin during Cheltenham race week and the woman who knocked a star off because she forgot to put a hand towel in the bathroom). I then talked my brother's girlfriend into giving it a go.

I did, however, make one fairly significant error: I forgot to get them to sign up using my host referral code. You can earn up to £268 for every host you refer, which means I lost out on a fairly significant chunk of change. I then forgot to refer them again when they moved to Booking.com so missed out on hundreds in commission-free bookings under their scheme. I try not to think about that too much…

Overall, I have loved using Airbnb - in just over two months we've converted our spare room into more than £700. And while I would like to live in a world where we could afford our daily outgoings without flogging our spare room like a cheap roadside motel, we are where we are.

If you have the room, a good radar for vetting people, and are open to intrusion on your personal space, it could be right for you too.

Just hit me up for a referral code first. (Note to editor: Only joking).

Money blog: What I learnt from putting my home on Airbnb (2024)

FAQs

Is it worth putting your house on Airbnb? ›

In some areas and circ*mstances, Airbnb rentals can be profitable, while in others, they may not be as lucrative. It's essential to carefully evaluate local market conditions and consider all associated costs before determining the potential profitability of an Airbnb rental.

What is the 90 day rule on Airbnb? ›

Airbnb doesn't allow properties to be rented out for more than 90 nights per year. If your limit for bookings is reached, Airbnb will automatically close your property until the end of the calendar year. In addition to 90 consecutive days, the 90-day limit also applies to 90 days spread throughout the year.

How much does the average person make off Airbnb? ›

Average Annual Host Revenue By Arrangement Type: 2021/2020
ARRANGEMENT TYPEAVERAGE ANNUAL HOST EARNINGS 2021AVERAGE ANNUAL HOST EARNINGS 2020
Entire Home$14,498$8,749
Hotel Room$8,452$4,885
Private Room$5,260$2,994
Shared Room$2,158$1,536

Can you really make a lot of money with Airbnb? ›

Airbnb offers a platform for hosts to not only make extra money but also to capitalize on the assets they already have - their property. Success stories range from those making a few hundred extra dollars a month to cover bills to those who have turned Airbnb hosting into a six-figure income.

What is the downside of hosting an Airbnb? ›

Added Fees: Like hotels, Airbnb imposes a number of additional fees. For each booking, both guests and hosts pay a service fee to Airbnb, which can be steep. Banks or credit card issuers may also add fees, if applicable. Taxes: Hosts and guests in some countries may be subject to a value-added tax (VAT).

Is Airbnb still profitable in 2024? ›

Airbnb had a strong start to 2024. In Q1, Nights and Experiences Booked grew to 133 million. Revenue of $2.1 billion increased 18 percent year-over-year. Q1 net income was $264 million—our most profitable first quarter ever.

What type of Airbnb makes the most money? ›

Tiny homes come in all shapes, just the same small size, but their Hosts also know that there's nothing tiny about their income. Tiny homes Hosts on Airbnb earned a combined total of more than $195 million in 2021 – the top grossing unique space type.

Where is the most profitable place to own an Airbnb? ›

The Best Airbnb Investment Cities and their Metrics
CitiesRevenue
New York$4,187
Fort Lauderdale$4,560
Miami$4,062
Los Angeles$4,275
17 more rows

What state makes the most money in Airbnb? ›

However, the "richest" US hosts make well above the national average. According to Tipalti's study, Hawaii has the highest average annual host earnings in the US. There, Airbnb hosts make, on average, a whopping $73,247 per year.

Is Airbnb hosting risky? ›

Hosts are paid out based on guest stays. Guests often find Airbnb is cheaper, has more character, and is homier than hotels. Risks of hosting include renting your place to rude guests, theft or damaged property, complaints from neighbors, and potential regulatory violations depending on your location.

How many Airbnbs do you need to make a living? ›

To become a full-time Airbnb entrepreneur, you'll almost certainly need to grow beyond offering just one property for rent. It may take three or even 10 rentals, depending on how often you can rent out your properties and for how much, to become financially secure. Growing your property portfolio is not easy.

How much of a cut does Airbnb take? ›

How much does Airbnb charge hosts? Airbnb charges hosts a service fee for each booking. What percentage Airbnb takes can vary, but it's typically around 3% for most hosts. However, Airbnb's commission can go up to 14% or more for hosts who have a Super Strict cancellation policy.

Is owning an Airbnb a good investment? ›

Airbnb investors (hosts) tend to use the company because of the high return on investments (ROI), low risks and flexibility. Typically speaking, Airbnb makes it easy for hosts to make a solid income with very little experience and upfront costs compared to traditional, long-term investment properties.

How much does Airbnb take from hosts? ›

How much does Airbnb charge hosts? Airbnb charges hosts a service fee for each booking. What percentage Airbnb takes can vary, but it's typically around 3% for most hosts. However, Airbnb's commission can go up to 14% or more for hosts who have a Super Strict cancellation policy.

What percent of Airbnb do you keep? ›

Airbnb service fees are calculated as a percentage of the total reservation cost, incorporating the nightly rate and potential additional fees like cleaning fees. The percentage typically falls between 5% and 15% of the total reservation cost.

Is it better to Airbnb a house or rent it out? ›

Short-term rentals provide less income security for the host than a full-time landlord. Since the tenant is only there for a short period of time, the host may not be able to count on a consistent source of rent income. This can make it difficult to budget and plan for the future.

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