Tuesday, March 21, 2017

My 2 Years as an AirBNB Host

I recently completed my first two years as a host on the AirBNB platform. In that time:
  • I've hosted 58 stays
  • I've grossed $22,766
I'm in the process of considering whether I will continue to host or substantially overhaul my approach to hosting, so it seemed worthwhile to take the time to reflect on the entirety of my experience with AirBNB to date. The below is a summary of my experience, interspersed with a few pieces of advice for prospective hosts.


Guest Space.  The entire second level of my home is guest space and includes two bedrooms, a full bathroom and a work area with built-in desk. This is the space I make available via AirBNB as a "private room" rental. Guests have shared access to the family/living room, kitchen, half bath and laundry room on the first level.

Private Room Listing.  AirBNB offers private room and entire home listings.  My listing is for two private rooms, which I always book together, not separately.  I continue to live in my house during the guests' stay. I've taken this approach in the interest of complying with my city's short-term rental regulations and making sure my guests do not negatively impact my neighbors day-to-day enjoyment of their properties. Since my guests stay upstairs and the master bedroom is on the first level of the house, we have a reasonable, but limited amount of privacy. Often, after greeting guests for orientation and key exchange, I don't run into them again until checkout.

Pricing.  I've experimented at various price points and settled at $95/night for the first two guests and $20/night per additional guest, limited at four guests. I charge a $20/stay cleaning fee, which helps cover the cost of cleaning supplies and minor damage. Recently, after a guest caused significant damage to my home, I implemented a $200/stay security deposit and immediately noticed an improvement in guest behaviors. When pinpointing price, it's helpful to check out the competition in your neighborhood. AirBNB offers a Price Tips tool that will help you identify a price at which your listing will be competitive. However, it's even more important to take into account the cost of the STR license (this is a local requirement), bed tax, and income tax that will come out of your AirBNB earnings. If you can't turn a profit, why host? (While it sounds like I'm making a lot of money through AirBNB, after costs and expenses, it is only marginally worthwhile.)

Screening Guests.  At this point, my policy is to accept only those guests with reviews from other AirBNB hosts for prior stays. If you are going to take a chance on a guest without reviews, I recommend requiring that he/she has completed identity verification through AirBNB. I'd be wary of a prospective guest who has had their account for a long time without accruing any reviews. This is because, generally, when a stay doesn't go well, both hosts and guests tend to leave no review as opposed to leaving a negative review. (One last point on guest selection... lots of prospective hosts are worried about hosting strangers, but, ironically, the messiest and least respectful guests I've hosted were the adult children of the law firm partner that was my boss at the time.)

Cancellations.  I started with a flexible cancellation policy, which means guests were able to recoup all fees as long as they cancelled before check-in. After five last-minute cancellations that left me without bookings on the weekends (the most popular time for AirBNB stays in my city), I switched to a strict cancellation policy.

Length of Stay.  I've hosted stays as short as one night and as long as three months.  Stays longer than thirty days are best if you'd like to avoid paying bed tax (check the particulars of your local laws and ordinances as they may vary), but screen those long-term guests carefully because AirBNB makes it difficult to force a guest to leave early. (The Worst Guest Ever described in the section entitled "Damage" below was a 30-day guest.)

Check-in and Check-out.  I started with a flexible policy, which means I would contact guests the week of their stay to ask when they planned to arrive. I found that nearly all guests arrived at least one hour late, even when they were the ones selecting the check-in time. As for check-out, after having a few guests hang around until 6pm on their check-out day, I implemented a strict noon check-out policy.

Safety.  This is always a concern, but--thankfully--has not yet been an issue. I installed a lock on my bedroom door for peace of mind and do not keep valuables in my house. Items with sentimental value are kept in my bedroom, not the common area. As a host, you should also think of the safety of your guests. I have a well lit stairway, keep a fire extinguisher and first aid kit on hand, and have installed smoke and carbon monoxide detectors.

Cleaning.  I am rather meticulous, so I do all the housekeeping myself. Ultimately, I've found this to be helpful in detecting any damage to the house and keeping the house well maintained. With so many guests in and out of the house, a certain amount of touch up work is required. Handling the housekeeping myself also eliminates costs and time spent coordinating with a cleaning crew.  I estimate that preparing the house for a new set of guests usually takes two hours of my time. While this can wear on me, especially during busy weeks at work, it has resulted in a house that is very clean and "ready to show" almost every day of the year. I take pride in that.

Maintenance.  I've had two maintenance issues arise while guests were in the house. First, my air conditioning went out on the last night of an ACL weekend. Since this happened at night, there was nothing I could do to resolve the issue for the guests that were checking out the next morning. I felt terrible! Second, during another guest's stay, a smoke detector battery started beeping to indicate it was low on power at 3am. The guest texted me, I woke up, grabbed my latter and switched the battery out in the space of about five minutes. This was possible because I was on site.  I've found that guests are very understanding about these issues, but it is best to be as prepared as possible.  Hosting has made me more proactive about maintenance than I would otherwise be.

Damage.  Most damage has been minor--scuffs on the walls that I have been able to buff out or retouch.  One guest, who had a 30-day reservation, managed to pull the trash cabinet out of the wall and off its hinges, leave a permanent ring on my coffee table by placing a piping hot mug directly on the wood coffee table (despite that I had provided coasters that were also sitting on the coffee table), chip my quartz countertop, stain the carpet in the guest bedroom, and stain the mattress. I was surprised the this guest was such a problem because she was a Superhost herself (which means that she rents her own condo on AirBNB and has gotten rave reviews). I assumed her Superhost status meant she would be a considerate guests. Instead, she was the Worst Guest Ever and the only guest that has caused permanent damage to the house.

Superhost Status.  I have Superhost status, which means I have met certain AirBNB standards related to responsiveness, guest ratings and commitment. Every review I've received has been a five star review. I think that the following are keys to hosting success: clear and accurate listing, clear and timely communication before and during the guest's stay, fanatic attention to detail when cleaning and preparing the guest space, and a warm in-person welcome when guests arrive. To put your own mind at ease, it helps to meet guests in person when they arrive. This gives you a chance to review the house rules as many guests do not read the listing in full before they arrive.

Extras.  I provide snacks and toiletries for my guests. The delight (and positive comments in narrative guest reviews) generated by these extras is totally out of proportion to the small amount of effort and expense it takes to implement them.

Earnings.  During my first year, I used my earnings for some basic home maintenance (hiring professionals to seal my cedar fence and trim my heritage oaks), but mainly focused on applying my earnings to accelerate my student loan repayment. When I finished repaying my student loans about a year ago, I applied my earnings to a cash-in refinance in order to lower my monthly payments (with the goal of giving myself the option of choosing a lower paying job in the future). If I continue to host, I will apply my earnings towards home improvements, furnishings and mortgage pre-payments.

If you've hosted for AirBNB or similar platforms, do you have any additional advice? If you've been an AirBNB guest, I'd like to hear your perspective. What can hosts do to make your stay exceptional? What attracts you to a particular listing? Any nightmare experiences?


Final thought: AirBNB customer service is to a host like the HR department is to an aggrieved employee. They are not on your side.

Tuesday, February 7, 2017

What's Next?

Tonight, I found myself researching tiny houses to install on plots of land in rural Texas.

Is this what a mid-life crisis looks like? Shouldn't there be a sporty car? A new wardrobe? Or at least a yoga retreat?

Lately, I've been thinking a lot about what's next and where I will find meaning. Since I don't have a family of my own, I typically look to my career for meaning, but big law has nearly run its course. It's time for a change. A change that could be an adjustment as minor as a new lawyer job, as considerable as a new career, or as major as a new career in a new city. Fortunately, I have options. A truly embarrassing array of options. With no children, no spouse, and no student loans, my only constraint is a mortgage, which could be disposed of in short order through the sale of my house.

I can do anything. ANYTHING.

For this, I am grateful, but--let's face it--people with too many options often spend so much time considering them that the opportunities pass them by. Like that guy that never settles down because the BBD (bigger, better deal, for the uninitiated) might be lurking behind his next swipe on the dating apps in his smartphone. Yup, like that.

None of the women in my family were so free of obligation, so flush with resources and so enriched with choice in their mid-thirties. There is no defined path. No template to follow. I am truly fortunate, but I also need to start narrowing my options so I can evaluate and choose.

When you're in a rut, what do you do to break free of the lethargy and move forward?

Friday, January 27, 2017

0% Financing

When I bought my house, I moved my hand-me-down queen mattress to a guest room and bought a king mattress. The mattress was a little pricey, but it is out of this world--the fluffy cloud I dreamt of while sleeping on a hard-as-a-rock mattress in my furnished apartment in Tokyo. I've never slept better than I'm sleeping now.

I bought the mattress from Mattress Firm, which has become ubiquitous in Austin. For every coffee shop and yoga studio, there seems to be a Mattress Firm. Mattress Firm offers 0% financing. Although I could afford to pay for the mattress in cash, the b-school side of my brain realized that taking them up on their 0% financing offer resulted in a discount (time value of money, y'all). So I financed the mattress.

What I did not consider is that after having law school student debt hanging over my head for a number of years, my tolerance for debt was almost nil. Today, as part of my 2017 goals, I paid off the remaining balance of the Mattress Firm line of credit ahead of schedule. I now have no debt obligations other than my mortgage and I hope to keep it that way for the foreseeable future.