- Justin Lieberknecht hosts a Propcast podcast episode outlining the intricacies of managing a short-term rental on Airbnb.
- Guest Chuck Hattemer talks about the importance of setting up your Airbnb and which features you should focus on that will be more appealing to customers.
- Building trust and personal relationships with your vendors is crucial in the Airbnb business. Justin and Ania share how they are able to build their connections with trusted service providers.
- Short-term and long-term rentals both require thorough research to avoid legal disputes and to maximize your investment’s potential.
Airbnb has revolutionized the way people travel, offering unique and affordable accommodations all over the world. As more and more people use the platform, many property owners wonder if Airbnb is worth it or if they should just stick to traditional long-term rentals for their investment properties.
In this Propcast episode, Justin Lieberknecht is joined by Chuck Hattemer, Ania Scott, and Joe Frey, who discuss their own experiences in managing Airbnbs. So, let’s dive in and explore whether Airbnb is worth it or if you should opt for a long-term rental instead.
Setting up your Airbnb rental
Whether you’re a new or seasoned homeowner, you’ll always have to have a starting point when acquiring a new property. After purchasing a property in your desired location, the next step is to make it rental-ready. Depending on your area, there are different considerations you need to observe to make your home appealing to short-term or long-term clients and to make your homes stand out from the others.
For Chuck, furnishing a short-term rental properly is a top priority. To make the home make sense for transient guests, it is important to carefully select furniture pieces that are suitable for the climate and weather conditions of the area. By doing so, you can ensure that your guests feel comfortable and can enjoy the accommodation as intended.
“We started [furnishing our rental] in wintertime when it was snowy, so we didn’t have to have any kind of outdoor furniture. When summer came around, people were asking more about that stuff. So, we had to set that stuff up,” said Chuck. The importance of taking advantage of your outdoor spaces can not be understated in the short-term rental market. By making deliberate selections for suitable outdoor furnishings, property owners can enhance the overall experience for guests and increase the appeal of the rental property online on listing sites like Airbnb or VRBO.
Aside from proper staging and furnishing, Chuck advised that for those planning to start an Airbnb rental business, they must make sure to build a team of trusted service providers to keep their property in peak condition. “Those were sort of things that I didn’t really think about going into it but realized, again, that’s part of creating that [extraordinary experience],” he added.
Building your relationships with vendors
When you’re managing your own Airbnb, it’s hard to attend to all customer issues by yourself. That’s why having your list of go-to vendors plays a critical role in your business. But that’s not it. It’s not enough to just collect phone numbers and call vendors every time you need help. You must build a foundation with your partners so you can both trust each other.
For Chuck, it’s like selling yourself to the vendor and not the other way around. “As soon as you can befriend someone and actually befriend them, meaning go out mountain biking with them or hiking with them and develop a good relationship, then you can actually get service,” he explained. “Be a good communicator and that’s the only way that you’re going to actually get their attention to get service because there’s just not enough people for the amount of work that needs to be done.” This sentiment is important in the short-term rental market, where quick turnarounds are critical. Guests who are only visiting for a night or two cannot afford to wait a week for a technician to come and fix a hot tub, for example. Fast service is critical, and the only way to get it is by having reliable vendors in your pocket.
Up next: Real estate investment: A wise choice for 2023?
But the real question is, how can you build a network of trusted vendors? Well, it’s different for everyone. There’s always the reliable trial-and-error method. Try one service provider, and if they do well, keep their contact information. If not, look for another. Don’t be afraid to test the market and shop around.
For Ania’s short-term rental business, it’s all about internal connections. “Catalina [Island] is so small. There are only about 4,000 to 5,000 residents. But Catalina sees over a million visitors a year. So, anyone who lives on the island is in hospitality in some way or another. So everybody knows somebody who’s either managing Airbnbs or working in the hotel industry or working in the restaurant industry, et cetera.” she said. “There’s a lot of internal connections once you make one. Our cleaner ended up introducing us to her husband, who introduced us to somebody else who was doing our gardening. And that’s kind of how we made all of our connections.”
This kind of client-vendor relationship is also crucial when you’re managing your Airbnb from afar, like Ania, who manages her Californian short-term rental from Boston, Massachusetts. “These vendors are the ones you can call when there’s a renter issue or maintenance concerns. They’re the ones who will act as your caretaker while you’re away and will treat your property as if it were their own. So, it’s really important to build that trust and personal relationship.”
“I started befriending [our vendors] on social media, commenting on how great their kids are doing, and started to really build a relationship beyond the vendor-homeowner relationship that we had initially. And it’s changed everything drastically,” said Ania. “Because we’re across the country, we rely so heavily on them, and they’ve helped us out in some sticky situations. So, I think it’s very valuable to do that.”
Navigating legal provisions and regulations in Airbnb rentals
Similar to other rental properties, thorough research for a short-term rental is a must. Location plays an important role in whether your Airbnb generates positive cash flow or not. There are certain locations with a low number of tourists every month, which generally suggests that they don’t attract as many short-term renters.
On the other hand, places like Las Vegas are popular Airbnb destinations, which serve millions of tourists and convention attendees per year. However, as part of your research, it is of equal importance to know the local provisions and regulations to avoid legal disputes if you’re going for short-term rentals.
Another thing to keep a tab on is taxes. For short-term rentals, “that’s another really complicated piece of this where if you’re gonna jump in and put your house out and have an Airbnb, figure out how to do the taxes and make sure you’re reporting everything right, or you will get bit,” Justin explained. And as a form of advice, Justin told listeners to just “hire somebody” and “don’t do it yourself.”
There are professionals who can help you manage your properties and will at the same time follow both local and federal laws. It is wise to seek advice, especially if you’re new to the industry, so you can maximize your chances of having a successful Airbnb rental business.
Is having an Airbnb worth all the work?
To understand if having an Airbnb is worth all the work, it’s important to break down the day-to-day tasks associated with managing a short-term rental. Beyond the setup time and cost to make your property rental-ready, these are some common tasks that are required on a regular basis:
- Communicating with guests before, during, and after stays
- Taking care of check-ins and check-outs
- Handling guest issues while on site
- Cleaning, doing laundry, and restocking supplies between guests
- Maintaining the property on a regular basis and implementing fixes and repairs
- Restocking replenishable inventory such as toilet paper, shampoo, soap, dish soap, etc.
- Replenishing towels, linens, bbq propane tanks, and other items that get regular use and need to be replaced every few months
- Reviewing and revising your pricing strategy
- Managing finances
All in all, these tasks can take 10-20 hours per week per property and an additional 5-8 hours on days when you have a change-over if you’re managing the cleaning yourself. A long-term rental, on the other hand, on average can take 1-2 hours per week of your time.
In either instance, whether you decide to go short-term or long-term, you must decide how hands-on you’d like to be. Property management companies can alleviate a lot of the workload, but keep in mind that short-term rental property managers can take between 10-50% of your revenue, whereas long-term rental property managers, on average, take a much lower 6-12%.
To conclude, the decision between Airbnb and long-term rentals ultimately depends on your personal preferences, budget, and goals. Airbnb offers a unique and customizable experience, with short-term stays that can be tailored to your client’s needs. However, it can sometimes come with higher costs, less stability, and a lot more day-to-day work.
Meanwhile, long-term rentals offer more predictability and potentially lower costs but may lack the variety and flexibility of Airbnb. It’s important to carefully weigh the pros and cons of each option before making a decision. Consider the prospective clients in your area and any special needs or requirements they may need.
With this information in mind, you’ll be able to make an informed decision about whether Airbnb or a long-term rental is the right choice for you. Ultimately, both options have their advantages and can provide a great experience, so it’s up to you to decide which one makes the best sense for your needs.