We had a small advantage as I quit one of my part-time jobs and we had a ltr move out for airbnb. (don’t judge, she wasn’t pleasant to live with anyway!). So we had that as our base - my loss of income and loss of long-term rent income) of what we need to make to make airbnb worthwhile- also counting what we could make if we rented out both rooms to students long term. Also factoring that str has the advantage of us having days off, room when family comes, and getting to say ‘good-bye’ to those guests we don’t enjoy.
Of course, we keep putting money INTO the space to improve it…we wouldn’t be doing that if it were two students down there. But we are having fun doing it…
So we used that lost income amount as a base, a minimum. Then I decided how many days we want to be booked. We rent in our home, I have three kids, we need time off for special events and to take our own vacation.
I came up the number of days I want to host, and divided the required income by those number of days, and came up with an average ($105) that we would need to make per night to make str worth it for us.
Then we worked some numbers, using averages, to calculate what our hourly rate is - $20 an hour, which is what cleaning-people and babysitters make in our neighborhood. Not great, but there are the other advantages, PLUS we do it as a family.
So we are satisfied with that rate. I’m still a bit below other ‘whole-house’ rentals but since my ‘whole-house’ is an apartment/suite in my basement with a small kitchen/living area combined I take that into account. But I also serve a nice breakfast, etc. etc etc.
So there are different ways of thinking of your rate - competition, what the market will bear, etc. - also, what is the minimum you are willing to accept for the work you have to do?
Some pricing experts say that you should be booked 50% 30 days in advance and (I think) 30% 90 days in advance.
We then did some research of what the ‘seasons’ are here in DC -easy since we have lots of tourists. We then set a low, high, and shoulder seasons and adjusted the price accordingly. Then we added for specific dates we know are big tourist times.
So, you can try different calculations - set your price. If you begin to book up fast, whoa!! Put that price on up there, lil’ missy!! This happened to me - my price was to low and by last February a lot of my summer was booked… I didn’t know until kind hosts on this forum blew the whistle for me.
Keep an eye on your calendar and see how it goes at that price. If no one is biting, lower it a bit. Is it the season where you are? Here it is not.
You can wait and think about the kitchenette later, UNLESS you think it will benefit you in someway even if you don’t continue with STR. We added a whole bathroom after hosting for 5 months, but, that bathroom is only going to increase the value and use of the space. Same with the work we are doing now - even if we stopped airbnb tomorrow it is still a great improvement and adding value to the home. You could add a microwave and minifridge and see how it goes.
I did a little questionnaire for awhile, asking guests how important the breakfast was to them choosing us, and then, in enjoying us? Overwhelmingly my guests check ‘VERY’. I also asked how important a separate entrance would be and they said ‘not at all’. That doesn’t mean that I’m not losing bookings because they don’t have a separate entrance, but it gives me a little idea.
So you can play around with things and see how it goes!!!
You’re not locked into much start out slow and see what works for you!