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Hello AirHosts Community - I’m wondering if anyone has run any calculations on what their investments in their Airbnb has yielded.
For example, perhaps you bought a new sofa and pillows for your Airbnb. That furniture costs $2,000 but because your place looked so much nicer on Airbnb you were able to charge $25 more per night. Also, maybe your positive reviews went way up so you started getting more bookings.
I’m doing some research to try to find out what the best investment an airbnb owner can make in their home. Maybe it’s $20k for a new pool, or maybe $2k for a new sofa, or maybe it’s $100 in new lamps, etc. I’m curious. Thanks!
Scott
I haven’t calculated ROI but I added onto the front of my house where the guest room is a year ago. I added a separate entrance and a small ensuite bathroom. It didn’t do this just for airbnb so am not too concerned with ROI. I am getting more bookings year over year for the same time period. Based on guest comments and behavior I feel confident that I am getting additional bookings because of the addition. I am getting more reviews than competitors who were previously getting more reviews. I know that’s an imperfect measurement of if I am getting the bookings over them but it’s all I have.
In addition to more booking the added privacy for me is worthwhile and it makes it much easier to run my dog boarding business simultaneously.
Thanks K9 Karma. That’s really cool. It’s exciting that the investment paid off. If you come across any numbers, plz let me know. I’d love to hear more stories like this.
Yes I did. Because in Holland is tax deductable. A couple of thousend euro was it. Now I save 10% of my earnings to maintentance costs for the room. With that money i replace things. Its about the amount of money i need for maintenance.
I don’t have any solid numbers but I can say as both a host and a guest that making even small upgrades to furniture and decor can have a big ROI on bookings. I am more expensive than many places in my city but I do get more bookings because I spent money to decorate my places with modern, clean decor that is consistent with the theme of my location (US Southwest) but not overkill. I see so many places that have the most gaudy kitschy stuff and altough it is not a turnoff for all, I think it is for many.
When I have used Airbnb to look for a vacation rental there are so many that frustrate me because while the location might be great and have some great features, if the decor looks like it a bunch of rando stuff from a thrift store or super 80s or has grandma comforters and wicker chairs…I will definitely pass on that listing. If I’m going to shell out the money to spend on a vacation and a nice place to stay, I want it to feel nice when I am there, not old and frumpy.
We spent a minimum to set up the listing, using mostly things we already had and only purchased new area rugs and painted the room (doing it ourselves). We made back the money in our first month. We took the money we made over the year and finished our basement (into another suite). That probably improved the value of our house considerably, so our return on investment has been about 750%. We still are trying to use things we already own (and buy nicer things for our own space - lol) and when we have to replace items in the bnb (like two ugly chairs with a nice sofa), we buy used, from estate auctions or paint furniture we find at the “Boulevard Club” There’s an upper limit to what people want to pay for accommodation in our area, so we keep it cheap and cheerful. I also think it’s much kinder to the environment to reuse and recycle. That’s what works for us.
This depends on the type of listing too. If you are a vacation listing attracting younger tourists you may have a different market and style than someone attracting people visiting relatives at the nearby hospital. Some people here post derogatory comments about IKEA, others think that indicates something nice, modern or even upgraded. I highly recommend nice used items and it’s not hard to get them on craigslist if you have a way to pick them up. Having good taste is not just about where the items are purchased or how much is paid for them. People who aren’t sure might find hiring a professional decorator to be worthwhile. Or post pictures here where you can get excellent advice absolutely free.
Totally nothing wrong with tastefully chosen, nice used items! I just personally will reject any place that has a frumpy looking patterned floral comforter or quilt…but that is just me It doesn’t have to be super modern (in fact I would also reject anything that is too “IKEA” and has no character), but I do seek out places that look intentionally curated, clean and crisp.
My advice, is to put some money into the bedroom or the master bedroom (if it’s a multi bedroom place). That’s where the people that pay are staying. The rest of the home, well, it depends on your place in the market. At the very least it should be nicely furnished and equipped with your target renter in mind as to price and quality. If you’re in a $500/week market, don’t decorate like it’s a $5000/week market.
We purchased new home and put it on air from the get go! Had to furnish it out from scratch!
Our estimates are that it’ll take us at least one year just to say that we have made the same amount of money we would have had we rented, when you factor in, utilities and cost of furnishing which we would not have incurred in an ordinary rental.
So for the first year, those that are renting the same house would be making more or the same as we hope to make.
Hopefully after he first year, then the benefits kick in, having recouped our sunk costs!
There isn’t a one size fits all - so there isn’t a ‘best investment’ a BNB owner can make in their home. It depends on their market, current state of their property, location, what appeal to a hosts target guests, which countries guests come from etc.
And unless you carried out properly constructed market research questions with each and every guest, you wouldn’t know what made them choose your place.
It could be areas outside your control such as availability or an external event, rather than something about your accommodation.
What do you think about ROÍ to increase the number of guests that can stay? Our place has a pull out sofa that turns into a twin bed, but I’m thinking of getting a full or queen sized so that we can accommodate two couples. Also, sleeping on the sleeper sofa means you can wake up to the view and I’ve often told my husband I would sleep there if I was renting our place. But sleeper sofas are expensive and it’s hard to find nice ones.
Indeed, I also mentioned this in another topic.
Overinvesting is one of the biggest traps of hosting.
Calculating ROI is only useful, if you can increase your price or lower your cost.
But most investments in a rental do not result in higher prices, but can result in more bookings.
Most of the time people think it is an investment, but in reality it is just upkeep or maintenance…
I added on a second bedroom and bath to the tune of 60K. And then my market reached a total saturation point. I have only five star reviews - 69 to be exact - and I am now charging the same price for 2 bed/2 bath that I once charged for 1 bed/1 bath. Thank god that bedroom and bathroom was for ME and not my side gig of renting.
I do to my house what I want to do. The Return on Investment is whether I like it.
I have bought a tonne of new furniture and other bits and bobs. All bought for me but I did think that the improvement in the quality of items in the room could lead to higher prices. Turns out no, pretty much the price has been constant for the two years I’ve been hosting. So glad I spent the money on things I wanted anyway.
I have a 4 bedroom whole house and have been hosting since Sept. 1st. I’m trying this for one year. So far I’ve had income averaging $3000 a month( not calculating expenses in this). I have an outdoor pool and have not entered into peak season yet and the past 2 months have been quiet. I could rent my space for $3200month unfurnished long term, utilities not included. So I am really going to need a good summer for this to be profitable.
It doesn’t have to be super modern (in fact I would also reject anything that is too “IKEA” and has no character), but I do seek out places that look intentionally curated, clean and crisp.