A common belief from new Owners (Hosts) to Airbnb, is that their property is worth $100* per night, therefore the logic fits that they should earn $700 per week. After the first few weeks / month, they are then surprised that they only earnt $450-$500 per week + paying for electricity, internet & water. Then, doubt sets in, if they should have gone via short-term over long-term. In some cases, we have seen this happen & the Host reverts to renting via a lease at $420 per week.
Like any business, it takes time to gain a good reputation + get customers. Renting via short-term without any doubt, makes you more money that renting via a lease (average is 2x the income of a lease). However, it takes time to get customers (guests) + bookings in advance. Airbnb + Booking.com platforms have price tips which, based on supply demand will suggest that you have a lower nightly price for available nights. When you 1st list your property, the aim of the game is to get as many guests as possible (1-night minimum stay) at an affordable price (~$69 p/night) + have those guests enjoy the property & leave a great review! In future weeks / months, your nightly rate will be $100 & as you get closer to the weeks / days in advance. Unless you lower your price to attract last minute bookings, your property will earn you $0. Over the course of the year, you will have a combination of $100+ p/night + $69, $75, $80 etc for each week / month. When you then look at the grand total, this is where you see that you are way ahead of a lease.
Another major plus is, by having your investment property continually cleaned (up to 7 days a week), you will find that your investment stays immaculate & a year later, it looks the same as when you started on short term renting. As much as we all live a clean lifestyle, it cannot compare to having a cleaner continually, spray n wipe all surfaces, inside all cupboards, gumption the shower/bath, windex the mirrors/windows, vacuum & mop the floors.
When we started with our 1stapartment on Airbnb, there was certainly those thoughts of ‘what if no one rents it’…’what if people don’t like it’…’what if I lose money’…’what if, what if….’!!! So….you need to consider the long term when renting via short term. Not, the initial short term income… as you will give into those indecisive thoughts & end up making a mediocre income. * the prices used in this article are an example