Five Traps When Starting Your Airbnb
If you’re new to Airbnb, or any other short-term rental platform, and you have made little to no profit, avoid these common pitfalls.
A short-term rental is not just an excellent side-hustle — if done properly it can become your main source of income. But too many times new people register their properties and fail to attract many bookings, favorable ratings, or profit. People ask me what they’re doing wrong — here’s my five simple things to look out for.
- Over-Pricing. I totally get it. You’ve worked really hard to have your place and get it looking Airbnb ready. Or you’ve spent months sweet-talking your landlord to get permission to register it in the first place. Either way, now it’s up and running, it’s time to get paid, right? Well, yes and no.
Pricing is a trap because you want to see a return on your investment as quickly as possible. However, future guests are attracted to great ratings, (which you don’t have yet), and you’re competing with properties who have Super Hosts running them.
In order to make your place more attractive, you need to have lower rates than your competition. And no, I am not saying give your place away for next to nothing. Just lower — even if it is just $50 less for a two day stay than your nearest competitor.
Guests are usually open to book a new property if you have lower rates than similar listings in your area. But, if you come in strong and price your place similar to established and high rated listings, or you charge more than them, people are less likely to book.
There are just too many unknowns. No reviews. No ratings. It is risky to spend money on something that has not been tested by anyone else. Yet, despite this advice on every booking platform, most newbies seem to ignore it. Just remember: lower, competitive prices does not mean cheap, next-to-nothing.
(Want a professional host or management team to do this? Make sure you know the costs. Read here.)
2. Focusing on one demographic.
But for a lot of us, we get a variety of guests visiting our cities, towns, beaches, mountains, deserts … that it would cost us money to be blind to other cashed up holiday-makers.
It’s tempting — you’re a fun family, so you’ll make your place fun for families. The second room can have bunks, because that’s what your kids love sleeping on when they’re on vacation. And you know what? That’s great. If families with small children are your only demographic for your area, hone in on that market.
But for a lot of us, we get a variety of guests visiting our cities, towns, beaches, mountains, deserts … that it would cost us money to be blind to other cashed up holiday-makers.
I have had my place since 2013, and I’ve self-managed since 2017. It is across the road from the beach and was very tempting to furnish it for families only. Yet, from the beginning I made the decision to embrace all demographics.
I have couples stay (you’d be surprised how many want two bathrooms and a spare bedroom because one of them snores), groups for girls’ weekends away, older mens’ golf trips, older children in their thirties taking their parent/s/grandparents/aunties/uncles away on a trip, honeymooners, families with teenagers …
Don’t sell yourself and your place short — you can be many things to many people.
In addition to the many demographics you should be open to, don’t assume why people are visiting your area. Any short-term rental operator will tell you it’s not just holiday makers who will book your place.
My place is in a tourist hot spot, yet I have had people from interstate stay to attend funerals, a government worker who needed to get a report done in peace, a Master’s student studying, friends who hadn’t seen each other for twenty years for a high school reunion — the reasons are endless.
If I had aimed my place at families only, or people on vacation only, I would never have achieved my 95% occupancy rate.
Don’t sell yourself and your place short — you can be many things to many people. Design your place that is welcoming to a variety people for a variety of reasons. For example: two single beds, as opposed to a bunk bed, will always attract a broader demographic (it is physically impossible for many people to climb onto a top bunk). Embrace all demographics.
3. Skimping on the small stuff. So, your place sleeps six. How many plates do you have in your cupboard? Six? It never ceases to amaze me how people skimp (or just not realize) that your guests may eat more than one meal a day in your home. I have stayed in so many Airbnb’s — mid-range to very expensive — and they all seem to have this one thing in common: they skimp.
I have stayed in places with three bathrooms with only two rolls for guests, other places with zero.
The small things matter. You need to appear generous and good value for money. Leave washing powder, dishwashing powder, kitchen towels, soap at every sink … and don’t get me started on toilet paper. Is it just me or do people seriously underestimate how much people use? I know items like this are a ‘starter’ for the guest, but for an essential like toilet paper, I am overly generous. I leave enough and then some. I have stayed in places with three bathrooms with only two rolls for guests, other places with zero. Come on guys, it is not going to kill you to be generous, but your bad reviews might.
Oh, and as for the crockery, cutlery, and glassware? Use my rule of three. Assume all your guests are going to eat three meals a day in your home. If that is six people, multiply it by three to get your magic number. A minimum of eighteen plates should be in your cupboards for a group of six. Who wants to go away on vacation and have to spend it washing up plates before every single meal? Be generous.
(Read here for the next five traps)
4. Not knowing your costs. This is a boring one. But it’s potentially costing you from making a greater profit — or any profit. Every short-term rental owner or manager must be aware of their base cost. If not, you are running your property blindfolded. Work out your monthly mortgage costs, if you have one. Add to it your monthly utilities bill.
Do you hire a cleaner? Factor in the cost. Do you hire linen? Add that in too. Do the washing yourself? Factor in cost of sheets, detergent etc. Every cost you encounter for the month should be added in.
HOA/ Strata fees? Yep. Add them up too. Your total should then be divided by 30 days ( I just round it to this number for consistency). This is your base cost for a day. The amount you need to earn BEFORE you start to make a profit.
Know your base price, otherwise you are paying for peoples’ vacations!
Why is this so important? Because once you have got some ratings and reviews (all favorable ones, amiright?), you need to start focusing on profit. You can’t do this unless you know what it actually costs you to run your place. Your base might be $150 a day. Depending on the season, you can add in your profit amount. Know your base price, otherwise you are paying for peoples’ vacations!
5. Only using one platform. Different countries, and different demographics can favor different platforms. When I started, I joined Trip advisor, Booking.com, Airbnb, and Stayz (VRBO). The statistic at the time for Airbnb told me that visitors to my area stayed an average of one night, and paid an average of $90. I would be losing money if I focused all my energy on Airbnb. In fact, that platform seemed to be really slow taking off in my area.
It’s good not to have your eggs in the one basket, but if one platform is outshining the rest, concentrate primarily on it — it’s the one making you the most money.
For me, Booking.com was by far my most successful platform. I focused more time and energy on that site, concentrating on the calendar and perfecting my prices. I then concentrated more and more on the other platforms, and they picked up too. Being on different platforms helps you get noticed by people who only use one site to search for accommodation.
Each platform allows you to select automatic bookings. I recommend doing this on only one platform. Why? Even though you can sync calendars between platforms, there can sometimes be delays or glitches and you do not want to be overbooked.
For me, I have automatic bookings on booking.com, and the rest of the platforms are booking requests. Do what works best for you, but remember certain sites, like booking.com, make you pay for the difference between your accommodation and a guest’s new accommodation if you cancel their booking.
It’s good not to have your eggs in the one basket, but if one platform is outshining the rest, concentrate primarily on it— it’s the one making you the most money.
(Read here for the next five traps)
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