Over the last two weekends, my husband Thom and I rented our personal home out on Airbnb. We’ve used Airbnb when traveling and have stayed in over ten different properties ourselves during the last couple of years. This, however, was the first time we have ever “hosted” strangers in our home. And while doing it twice certainly doesn’t make me an expert, I came up with some advice for anyone who might want to consider it in the future.
Homes as vacation rentals are popular in our community because the Palm Springs area is a world-famous travel destination. It also features several large annual events. As I mentioned last week, mega concerts like The Coachella and Stagecoach are held here every April and draw over 100,000 people each weekend. Hotels can’t accommodate everyone, so homes rented through sites like Airbnb and VRBO do very well. Rumors are rampant that some owners in luxury homes near the site generate up to $30,000 for the weekend. How could anyone not be tempted by that?
So last May when I was unable to get tickets to the concert named Desert Trip for myself, we decided to cash in on some of that income. Based upon what other homes were renting for during that time, and my experience as a renter, I listed my home on Airbnb on May 8th with some attractive photos. Within a week both weekends were booked. Not bad for a beginner. And now, five months later, my income is in the bank, and my Airbnb guests have come and gone.
What we’ve learned is that like most life experiences—there are good things and some less than positive things. Here are the benefits:
1) The income. For the two weekends, we grossed over $2,500. We purposely priced our nightly rate at what one of the nicest hotels in the area was charging for rooms. While our home is clean, well-located, and extremely comfortable, we realized it is not a luxury home. We also didn’t want people using as a party property, so we limited it to four people. We also didn’t want our guests feeling so entitled they could do anything they wanted because they were paying so much. At the same time, we asked a price that made us feel good about renting in the first place. After all, why bother if it isn’t a win-win for both parties?
2) Motivation. One of the best things besides the income was the excuse and incentive to do home repairs and maintenance on our house that we’d been putting off for a while. Things like touch up painting, cleaning the grout on our floor tile, having the trees trimmed, as well as cleaning out and decluttering cupboards and drawers suddenly became a priority. Nothing like a deadline to motivate a person! Now that the guests are gone we have an upgraded and well-maintained home to ourselves.
3) Testing our levels of trust and non-attachment. Something that came up repeatedly when we explained to friends and family about our decision to rent our home was the issue of trust. People asked, “Aren’t you afraid people will trash your house?” Or, “what about your stuff? Aren’t you afraid people will steal or abuse it?” First off, Airbnb allows you to request a deposit. To make a reservation people must use a credit card and that card, along with your “deposit request,” is on file. You designate the amount. Should your guest damage or trash something in your home you can contact Airbnb, and they will deduct it from the credit card on file.
But even with that level of protection from damage and loss is the idea of walking away from your home and letting complete strangers sleep in your bed. If the property is a second home and you’ve had lots of people moving in and out, it is likely much easier. But it does make you ask how attached you are to the things you own. We did put a lock on my office door, which contains my computer, my books, my journals and a few other personal things. That helped. Other than that, I packed up all my underwear and vitamins and stored them in the office as well. That’s it. The rest of the home was fully accessible. Thom had other issues like concerns about locking doors and the garage being kept closed. Overall, it helped once we met the people in person. But if you ever want to see what you are most attached to in your home, and your level of trust in other people, this is an interesting way to do it.
4) Learning. In case you haven’t noticed before, I tend to believe it is SMART to continue the learning process no matter what your age. I learned a lot about the experience of renting through Airbnb. That’s why I’m sharing them with you.
5) The 14-Day Tax Rule. Something I just learned today is a rule by the I.R.S. stating that homeowners who rent out their home for 14 days or less within one year do not have to pay income tax on that income. Our 7-day rental qualifies and is tax-free. Be sure and check this with your accountant but it helps make the income even better. Plus, making things easier was the fact that our city recently negotiated with Airbnb and TOT (occupancy taxes) were charged to the guests and paid directly to the city.
Okay, so that is a short list of the benefits that we received from renting out our house. Here are the downsides.
1) Where do you go when you rent out your house? The vast majority of Airbnb properties are either second homes or guest homes on a host’s property. For our rental to work, we had to vacate our primary home. Sure we could have asked some of our friends and family if we could use their spare room. But that didn’t feel comfortable to us, especially with our dog Kloe. To make the most of it, we needed to find somewhere else we wanted to be that didn’t use up all the income we planned to receive.
For the first weekend, we attended another music festival several hours from our home that we had attended in previous years. We found an Airbnb rental at ½ the price we were receiving and had a great weekend. The 2nd weekend turned out to be more of a problem because the home we planned to stay in was a 2nd home belonging to friends that ended up rented as well. Fortunately, we contacted the owners of the mountain home we rent every summer, and they were happy to let us stay there for a reasonable fee for the area. It turned out well for us, but the process caused some concern. If you don’t have a place to stay when you rent your home, it might not be worth it for you to do.
2) Damages. Both sets of guests on both weekends were wonderful people. Unfortunately, once our first weekend renters checked out, I got a text saying, “Sorry. We broke a wine glass and my sister’s makeup stained the sheets in the 2nd bedroom.” What do you do? Yes, we could claim the damage on the deposit. The wine glass was no big issue—Thom breaks them all the time! But the sheets? Do I have to replace the entire set? What’s a fair charge? Am I being picky? In the end, we decided to let it go to the cost of doing business. Things happen. Fortunately, the sheet could be turned upside down, and the stain was white, so it hardly showed. Lesson learned.
If you research it, there are some horror stories about people who rented their homes out only to return to a disaster. I would be lying to say we had no thoughts about the potential damage to our furniture. But other than the wine glass and the sheet, everything looked as good when we returned as when we left. I’m happy to say that both of our sets of guests left the house spotless and in excellent condition. And from what I’ve also read, that is actually the experience of most hosts. But again, things can happen.
3) The Hassle. Let’s face it, doing anything out of the ordinary can be a hassle. It’s far easier to do the same things we always do. As creatures of comfort and routine, most of us drag our feet even if we think something is a good idea. Although our guests were very clean and left everything tidy, it still shook up our habits. Not only did we prepare in advance to make sure our house was in perfect condition, but we also scheduled the house cleaner to make sure everything was extra clean, packed up what we needed to take with us while away, did laundry, changed sheets and put away all our personal items. Then, after the first guests left, we came home and did it all over again.
So, with those benefits and downsides, will we do it again? Probably not. Sure the income was great, but that was only possible because of the large-scale event held in our area. Normally the income would be about half that—and the trade-off for vacating our home would not make sense. However, if a person or couple is in need of extra income and has a place to stay while renting, it might be worth the trouble.
The best advice I can give anyone who is contemplating the possibility is to be flexible and non-attached. If you can manage both of those qualities, and the money sounds intriguing, you might want to try it out. What is always SMART is knowing our options and then making the right choices for each of us.
What about you? Have you ever rented your home on Airbnb or VRBO? Please share your advice in the comments below.
Okay, I have to say, this made my stomach crunch! I just don’t think I could allow strangers in my home when I’m not there. When I travel (often), my house/pet sitter is a dear friend (who also helps me whelp puppies, so she’s been at the birth of most of my kids!). But taking the dogs out of it, just the idea of leaving my home to strangers . . .
Which also of course got me to consider why my possessions are so important to me! But I’m not sure it’s that–it’s more that my home is really my heart.
Great food for thought, Kathy! Am gonna have to study on this one.
Hi Susan! Hahaha! Hey…I’ve jumped out of an airplane at 10,000 feet so this was not nearly as stomach crunching as that! I really do believe that something that helps keep this in perspective for Thom and I was that we travel so much and stay in so many places. Not only has it made us realize that most of the time you really don’t need as much “stuff” as you think you do to enjoy life, and often the details are just wallpaper to what brings us the most happiness. I do love my house and we have worked hard to make it “rightsized” for us, but I also strive to remind myself on a regular basis that what brings me joy and what makes me feel content and secure originates in my mind and heart, not my house. This was also a great experiment in asking myself, “if your house was burning down, what would you grab on the way out of the door?” If I had my husband, my dog and my computer I would be just fine. 🙂 What about you? ~Kathy
That one I already know the answer to–my dogs! Which would take enough time just for them. Lol. Anything else is just gravy 🙂
This article is great-I love your writing
It all sounds very nice and fascinating. Did you call your home owner’s insurance and let them know you were renting out your home to 2 different renters on two different weekends? Or will Airbnb pick up the tab and/or medical costs should a renter fall and hurt themselves? It only takes one occurrence to wipe you financially clean. A slip on a rug. A fall in the tub/shower.
If my math is correct, according to what you wrote, you grossed $2500. From that you have to subtract your own rental fee of $625 (you did state half of one weekend rental covered your own rental) and another for the mountain retreat, let’s say another $500. A broken wine glass is about $10 and a set of queen sheets can run you about $60. I personally wouldn’t want to sleep on sheets that someone spilled their makeup on, regardless of how much bleach I used. Yuck!
You also stated you hired a professional cleaner, I am guessing @$100. If I deduct all of those expenses from your gross I come out with a net profit of $1205, which probably wasn’t even enough to cover the costs of the tickets, if I understand you correctly. (Plus the value of your own time setting up etc.) This net balance doesn’t include an extra fee to your home owner’s insurance, if you even reported it or let them know.
BTW, what were the prices of the concert you did attend?
From a financial standpoint the money you can earn on the side doesn’t justify the amount of risk you are taking. One fall or accident, as I said, can wipe you out financially. Everyone knows that most homeowners have insurance and you are fair game. Consider yourselves lucky nothing happened. I can tell you some real New York horror stories. Be thankful no one stuck a hidden camera in your bedroom or bathroom and are broadcasting your intimates on the web…….that’s a good one…but I digress. (yes! it happened to a good friend of mine)
If a person wants to do Airbnb full time or very often, then the odds are more in their favor because of frequency and more planning, insurance and preparedness. Clients sneak in friends, dogs & pets and often smoke up a storm. But if it’s a 2nd home or vacation home, the owners don’t care. A main homeowner is a different set of beans.
My family have been landlords for decades (I just dabbled in it and hated it). You think you’re protected with their charge cards but expenses can be disputed (esp Am Ex). Charge cards have limits and charge cards can be closed out and you’re stuck.
Consider yourself lucky. Glad it was a nice experience for you. But unless a person is real serious, I would look elsewhere to earn extra money (unless you do more of a B&B and remain in the home, then….that’s a bit better.)
Thanks for sharing.
Good luck to you.
Hi Cindi! Thanks for bringing up some of the issues that I’m sure other people had as well. I agree that it is good to be cautious but I think we all know people who are so cautious that they never do anything or try anything new out of fear. I think this experience was easier for Thom and I because we travel so much. We sleep in hotel rooms and other Airbnbs on a regular basis and if we let our fear of “who has used these sheets before” bother us we would never stay anywhere! As far as insurance, thank you for your concern but we are well covered for everything you question–but I agree it is a valid concern. Also, Airbnb does cover you for all sorts of liability and here is a link clarifying the coverage: https://www.airbnb.com/host-protection-insurance.
We too have been landlords for decades and know that things can happen. Fortunately, or maybe because we tend to believe you find whatever you go looking for, we’ve been extremely fortunate with our renters in all cases. Yes, sometimes things happen. But as I mentioned, the majority of renters on Airbnb feel it is worth the trouble and the potential for problems. And trust me, the income we made versus the money we would have spent going to the more expensive concert made it worth our while.
Of course with that said, I think everyone should do only what they feel comfortable doing. I for one would never feel comfortable being a driver for Uber or Lyft just for extra money, but that’s me. I do know a couple of people who are doing it and it works for them. We are all different in terms of what appeals to us and our limitations. As I routinely say, finding our own “rightsized” way to live life is a key. Thank you again for raising questions that others might not have been will to ask. ~Kathy
Great insight about the process and what to expect, Kathy! And I’m glad you two had such an overall positive experience making proverbial lemonade out of not getting concert tickets!
Sharing, but before I do I had to add how helpful this is. I had always been curious how people handle using their primary residence as an Airbnb – – and it turns out they do not 🙂 so very helpful.
Hi Carla! Well like I said in the post….I did lock up my most “personal” items in my office so I wasn’t completely without concern. But it sure helps you find out what is important (or personal!) Thanks for coming by! ~Kathy
This was such an illuminating article! I bit my nails leaving a house/dog sitter for a long weekend in my house and she was someone I knew AND we paid her! I feel a little better now reading this. Thanks for posting and sharing your experience, Kathy!
Hi Terri! Yes, I think it is easy for us to start obsessing about what could go wrong when we put out trust in others, but in the long run, I deeply believe that most people are as trustworthy as we ourselves are. This was an excellent way to try that theory out and I’m happy to say it was 99% true. I had another local friend who rented out her home for one of the weekends of the concert while they were on vacation. Never met the people in person either coming or going and her experience was wonderful and she can’t wait to do it again. Thanks for your thoughts on this. ~Kathy
You are brave!! I could not do it for my primary home. If I had a vacation home maybe just maybe. Love learning your takeaway from the experience.
Hi Haralee! hahaha….I do like to challenge myself. And I was bound and determined to make some lemonade from the experience when I didn’t get tickets to the concert. And the way we figured it, we probably saved about $1,500 by NOT going to the concert (that was for some of the “cheap” seats) so we actually came out far ahead. Of course, it does help that Thom and I both lean toward minimalism. We tend to keep personal items to a bare minimum and that seems to help. Glad you found the post useful. ~Kathy
I’m so grateful that you shared your experience with us! I think the security of our home and items (especially personal documents that could very easily lead to identity theft) would be the greatest hurdle for my husband and me. I firmly believe that 90% (or more) of renters would be wonderful, but one or two bad ones could make your life very difficult. But, I also know that we’ve rented through Airbnb, were very respectful of the properties, and wouldn’t dream of snooping in off-limits areas. I agree that if the rental was a second home, it would make the decision much easier.
I’m curious, you said that you probably wouldn’t do it again (and certainly not for less money), but what about Desert Trip or any of the other mega-events next year? The income must be a little tempting.
Hi Janis! Glad that you found the post helpful. It’s really become such a popular thing to do now–either rent out or rent when traveling–so I hoped others would appreciate the perspective. As you say, when we stay at an airbnb we always treat it as we would our own so it is good to extend the same expectation on others. And yes, we’ve even accidently broken things when staying there but have always gone out of our way to replace it.
And yes, I won’t say NEVER for renting out our home again. Thom was especially pleased to find out about the 14-Day tax rule so that helps too. It really depends if we have somewhere else we want to go during that time. That’s why the first weekend worked so well but for the 2nd weekend it was a bit of a struggle. We’ve also talked about how we could just do it for one weekend only and then it would be easier for sure. I’ll let you know! ~Kathy
Hi Kathy, I have been an Airbnb host for the past two years and have not had too many problems with guests. We live in a two storey house close to the beach on the Gold Coast so we are in an attractive location. Our downstairs area which comprises two bedrooms, a study, bathroom, laundry and living room was no longer being used since our kids left home, so we spent time and money painting and redecorating prior to listing on Airbnb. It has been a great experience, although I do get tired of the changing of linen and cleaning. The money we make goes straight into our holiday fund so that we can travel overseas once to twice a year. The only problem I have had with guests was guests having noisy visitors come over and another time a guest took a towel. Fairly minor things in the scheme of things. I would thoroughly recommend it to anyone who has space in their homes.
Hi Kathy! Thank you so much for sharing your experience. It sounds like a perfect way for you to utilize your extra space and bring in travel money. That REALLY appeals to me, too. It is nice to know that most people are trustworthy and take care of your property. I know when we stay in a place we always do our best to clean up and take care of it and it’s nice to see that others do as well. ~Kathy
I was interested in learning that most Airbnbs are rented by people who have a second home or a guest home on their property. That makes the whole process a lot easier! I have wondered about this system of providing accommodation ever since I heard about it a few years ago. My daughter has thought about it, but was never able to find dependable information. Your personal assessment was invaluable! Thanks for sharing your experience in such an honest way! I now know that Airbnb would not suit her. Great article!
Hi Diane! Obviously people who just rent out rooms in their homes are homeowners, but every single apartment/home we have rented has been a 2nd home or guest house with a private entrance. I couldn’t find any verification fo that on Airbnb but it appears that way. In some ways I think it is an excellent way for people who are in need of extra income, but I would think that it makes it a bit safer as a couple rather than a single. Still, there are other stories on the internet when people do it regularly and enjoy the process–sort of like running their own Bed-and-breakfast. I like my privacy too much so I know that wouldn’t work for me. Glad you found the post helpful. Thanks for your thoughts. ~Kathy
We’ve stayed at a few airbnbs and always had a pleasant experience. It’s very interesting to hear it from the other side. I think perhaps one of the best benefits is the motivation to do repairs and make your house look its best.
Hi Tom! Yes, I think the motivation to do the repair things was what appealed most to my Thom as well. I was a bit skeptical about the entire thing but usually allows me to experiment as much as I want. Next year we have already arranged our first “home exchange” to Mexico which we are convinced will suit us a bit better. And yes, we will be writing about how it goes upon our return. Meanwhile, we are enjoying our currently well-maintained house. Thanks for your thoughts. ~Kathy