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- Also see: Airbnb First Month By the Numbers
Ladies and gentlemen, one of the craziest things I have ever done (other than using Airbnb as a verb in the title).
I just rented an apartment in Manhattan for the express purpose of listing it on Airbnb.
As some of you know, I work in real estate in New York, so I’m privy to rentals and have seen a lot of spilled ink on the whole Airbnb debate. It’s a very hot topic in the city right now.
I heard of an apartment in the East Village that was sitting there, easy approval, beautiful block, door was open if I wanted to go check it out.
A few people in my office have Airbnb apartments and seeing their calendars full of green (which means days booked) got me thinking.
So when I walked into that apartment, I quickly ran some numbers and just like that, decided to go for it.
This was/is the hardest part. I just welcomed my first guest last week. Two lovely ladies from Australia. The day they checked in, I was putting the mattress down onto its frame about an hour before their scheduled arrival. When they texted that they were running late, I was like thank god. By the time I did my final walk-through, they were there with all their luggage. Talk about turnover!
That’s been the tone of this whole thing from the second it began. I signed the lease the same day I first opened the door. I ordered a mattress, sheets, pillows, towels, etc (all from online shopping portals and getting 5x with my Chase Freedom card for this quarter’s category bonus, of course). Then I went to the Ace on the corner, got some paint and cleaning supplies and started getting the place together. Within a few days, I was welcoming the first guests. Don’t worry, I kept the windows open to air out the paint smell.
The money instantly started hemorrhaging from my bank account, dear Jesus. I estimate it cost me around $7,000 to start it up: first and security, all the furnishings, the cleaning supplies, and alllll the consumables. Who knew that humans need so much stuff just to live in a place for a few days? I was shocked at how much was required. And one thing kept leading to another thing. If I get towels, well I need washcloths and hand towels. Oh and shampoo. And a shelf to put the shampoo on. And then a shower curtain. And shower hooks. And a shower rod. And Tilex! And and and = $$$$ (that was just the bathroom!).
But I figure it’s all worth it. Once I get everything in there, all I have to do is wind it up and let it go. At the clip I’m going, I will have my entire investment back within the first three months. After that, it’s all profit (after I recoup the monthly rent). But if it keeps going like it’s been going, this looks to be like a very, very good way to invest $7,000. I will have to report back with real numbers and real costs to start this up, especially since this first taste has already made me want to get another.
There were so many tiny things that had to fall into place quickly. The electricity. The internet. All the deliveries. Listing the place.
I had to devote 3 full days of my life to getting this set up: a Friday, Saturday, and Sunday. I was completely out of commission and running around like a crazy person, answering the phone with paint on my hands, stuffing receipts into my back pocket, and running to and from the hardware store more times than I care to recollect.
It was a well-synced process involving quick appointments, some begging, Amazon Prime, Shoprunner two-day shipping, and a little help from my friends.
I spent my days painting, cleaning, scrubbing – that sort of thing. I spent my nights ordering so much stuff from the internet you wouldn’t believe it and imagining how I wanted the place to look. In the end, I am happy about how it turned out, that little Pandora’s box. Like an artwork, there is always some more to improve upon or adjust. It is guest ready, but now I want to optimize the details.
My time – the other investment
I want to do the cleaning up on this place for the first few months – after the guests leave, I mean. I want to check people in and out, show them the features of the place, and listen closely to their feedback. Was anything missing? What are they using the most of? What else goes into the cleanup and preparation process, and most importantly, how long does it take? I’m currently charging a $99 cleaning fee. If it takes me an hour to clean up, I’m paying myself $99 an hour. And as always, my time comes at an opportunity cost. The time I spend in the apartment is time I could’ve been making money in other ways. And it might take me more than an hour – I am learning a new skill set, after all.
But also the time I spend in the apartment is an ongoing investment in the space I am creating – upkeep is an important part of that. So, in a sense, I am getting paid and making an investment at the same time, just by replacing some sheets. But it’s not so simple. I need to know exactly what makes this thing run before I’d feel comfortable delegating to someone else. There are so many moving parts.
So for now, I am investing my time and paying myself back. In a way, it is measurable, and in another way, it isn’t. I hope I’m doing the right thing! (And that’s my nervousness creeping in. I’ve essentially just set up a side business, and setting up any business take some measure of nervousness, which I consider a good thing – it means you care!)
My first guests are currently staying in the apartment. My next four bookings are already confirmed. I am well on the way to making my investment back, and to getting to profit stage by January – which I plan to use for other investments. The stock market kind and the paying off my student loans kind.
I will post more on this little experiment next month once I know the cost of utilities, internet with all the taxes, consumables as I replace them, and all the other little things that has gone into this.
I’m optimistic about the future as long as everything keeps going smoothly. I’m hoping for the best and preparing for the worst. Oh, and I’m definitely going to need to explore the tax implications of all this.
Mark this as developing, and as proof that I am occasionally crazy. I felt like I’d lost my damn mind the day I decided to do it. And since then, everything I’ve learned has been brand new. I feel exhilarated. I’m excited. I’m nervous, kinda scared. But I feel like I’m taking control and living my life. And when I’m not traveling, I get to meet people from all over the world, so I feel I am contributing to a global sense of shared experiences and becoming part of someone’s travel story. And that, more than anything, is what compelled me to do this.
There’s a lot to it, more than I thought, and I still feel kinda like I bit off more than I can chew. But I’m excited and can’t wait to share more as I learn.
If anyone has any insights or questions, please post in the comments. I’d love to hear more about this.
Oh and here’s a link if anyone would like to join Airbnb as a traveler or host. You get $25 off your first booking.* If you liked this post, consider signing up to receive free blog posts in an RSS reader and you’ll never miss an update! And thanks for using my links to apply for new card offers!
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