Airbnb by the Numbers: Q2 Update

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When last we spoke of this topic, I was a little down in the dumps. Q1 was tough.

But I’m happy to report that Q2 was much better.

Good vibes

Good vibes

I’m expecting Q3 to be the best this year, and Q4 to match Q2, maybe exceed it a bit because of the holidays. And then back to where we started in January 2016: Q1 again.

New acquisition

The theme for me with Airbnb since I started has been “Oops, I did it again!”

I talked about straddling the line between smart debt and dumb debt. I got a 4th Airbnb apartment and plunged headlong into plain ol’ dumb debt. That was in May.

Directly after, I aggressively started repaying the debt.

No more new ones until well after summer is over. I need to take a breather. Plus, considering all of my units have window units for ACs, the electricity bills alone are gonna be tremendous.

But I’m happy to report that I should be out of credit debt in another month or two. After that, I’m launching headlong into FIRE.

That means paying off my student loans, saving up to buy a home, and padding out my financial future.

The numbers

I’m not including the 4th apartment in any of these calculations.

Why?

I have that one linked up directly to my savings account.

Rent is auto-payed through that account and anything it earns gets to stay in there.

Except for a monthly $500 Roth IRA contribution. I’m expecting the 2016 Roth IRA contribution to go up to $6,000 for the year, so @ $500 a month, I can max that out. I can always pause it if I need to, like to make room for the free $240 I’ll get from my Fidelity Amex.

But the newest acquisition is purely for my FIRE.

Also note that 20% has already been deducted for taxes. I’m paying quarterly tax payments out of a separate, online-only savings account (this one, which has been fine), so this is “after tax” (because I’m withholding taxes for myself).

And numbers do not account for rent and expenses, so let’s take those out now.

  • Rent: $18,150 ($2,150 x 3 + $2,300 x 3 + $1,600 x 3)
  • Utilities: $1,350 ($150 x 3 x 3)
  • Consumables: $300 (toilet paper, cleaning supplies, laundry service, extra dishes, etc.)
  • Upgrades: $250 (new sheets, new comforter, extra mattress pad, new decorations)

Total: $20,050

April

April 2015

May

May 2015

June

June 2015

$29,940 – $20,050 = $9,890 / 3 = $3,297 per month in profit

In my Q1 update, I projected that I’d make $3,200 per month in Q2 and Q3.

So I got pretty dang close, and even exceeded it a little.

Expectations for Q3 and Q4

I expect July, August, and September to be the best months by far. 

I think I’ll exceed Q2 by a few hundred bucks per month or about ~$1000 for the quarter.

And October, November, and December are wild cards.

I already have some bookings for October and we have the trifecta of holidays in those months (Thanksgiving, Christmas, and New Year) which could prove to be a boon. But I expect it to at least match Q2.

The year

Considering I only made $500 in all of Q1, how does this average throughout the year?

Let’s just go ahead and throw Q1 away.

  • Q1: $0
  • Q2: $9,890
  • Q3: $11,000 (Q2 + $1,000, rounded up)
  • Q4: $10,000 (to match Q2 / account for holidays)

Total: $30,890, or ~$2,575 per month

While of course I’d love to exceed this, an extra ~$31K per year for a side hustle is pretty good!

And once I get my student loans (~$53K!) paid down, I’ll really be in the clear. If I decide to leave NYC, I don’t know what’ll happen to this side hustle.

If all it does is pay off my student loans, I am 100% OK with that.

Also, I am not factoring in my newest 4th Airbnb into any of this. That one is purely for my savings and retirement. I reasonably expect that one to bring me an extra $10k to $12K a year that I’ll touch when I have enough for a home down payment. I’m enjoying the “forced savings.”

In my Q1 update, I expected to make an extra $32K to $40K a year. With the 4th property considered, I’m definitely hitting that. Which is really cool.

Other considerations

I’ve addressed the legal, moral, and ethical issues of running Airbnbs. And I understand this could all go kaput at any moment.

Even still, I’m staying positive and have good intentions.

This is by far one of the most “out there” things I’ve ever done, so I’m looking at it as one big experiment.

Meeting travelers and creating welcoming spaces is definitely a reward unto itself.

Looking forward to being debt-free, and to saving for my future, is definitely my biggest motivator.

Bottom line

More real numbers. 

It’s beneficial to see it all typed out and added up and divided into quarters.

Starting a side hustle and reducing expenses is the #1 best way to get out of debt. Lots and lots of baby steps.

Drew from Travel is Free posted about his love/hate relationship with Airbnb, which was an interesting read for me. He makes a lot of good points.

I’ll post another “by the numbers” update this fall after Q3 is up!

Would you consider staying at an Airbnb on vacation? 

(Here’s my link for $25 off your first stay if you decide to sign up!)

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About Harlan

Just a dude living in Dallas.

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