The easiest way to make money in the sharing economy is to monetize your most valuable asset: your house. Monetizing property is nothing new of course, people have been renting out accommodation for thousands of years.
However, with the arrival of short term rental platforms such as Airbnb, VRBO and Homeaway, it is now easier than ever to make money with a house, room or even a couch. There are a lot of advantages of renting out this way versus the traditional long term rental option. And the best thing is, you don’t even need to own a property. You can list rented accommodation as well.
Let’s look at all the advantages of short term rentals. These are based on Airbnb, but most also apply to other platforms.
Renting out short-term proves much more profitable than long term renting. You can expect to make 50% to 200% more, depending on the specifics of your property and location. Profitability also depends largely on your strategy and how much effort you put in of course. If you follow the strategies and advice in my book, Get Paid For Your Pad, you’ll be doing very well.
First of all, can choose the dates that you want to rent out your accommodation. For example, you can make your house available only when you’re on holiday. Or, you can list a few months a year or even full-time and stay somewhere else.
Secondly, you can choose to either rent out your whole house, a spare room or even a couch or air mattress. In fact, this is what Airbnb originally was meant for, when it was still called Airbed & Breakfast.
Thirdly, you also have the freedom to choose who you rent out to. After creating your listing, you are under no obligation to accept inquiries and you won’t get penalized for doing so. You have complete control.
Finally, a great advantage of short term renting is that you are guaranteed that your guests will leave, which isn’t always the case when renting out long term. Most countries have renter protection laws in place. If your renter doesn’t want to leave after the lease expires, it can be a big hassle to get the person out.
3) Social aspect
After interviewing dozens of Airbnb hosts on my podcast, it’s become clear that many friendships have been formed as a result of hosting. Sharing one of the most personal things you own with a stranger from the other side of the planet creates a lot of trust, respect and appreciation.
After hosting for over two years, I now have an extensive network of former guests all over the world, many of which have invited me to contact them when I’m in their area. How cool is that?
The combination of the factors above empower hosts to do things that they otherwise wouldn’t have been able to do. To me, that’s the beauty of Airbnb.
I use my income to travel the world 10 to 12 months out of the year. Others use it to cover their mortgage. In fact, I’ve spoken to people who were able to prevent foreclosure by listing a spare room.
Here are some other great examples of former guests on my podcast.
Diego from Buenos Aires started listing his apartment because he couldn’t cover his rent. He now runs a small business listing three apartments and uses the money to pay for his university tuition.
Glenn Cooley prevented having to move to a cheaper apartment by listing a spare room. Although he was very apprehensive about letting strangers in his house, his experience turned out to be so positive that he regained faith in humanity.
Andrew Campion started using Airbnb for his apartment rental business, listing over 100 apartments, and now gets over 70% of his business through Airbnb.
Downside and risks
Of course, there is a downside to short term renting. It's more work. You have to manage your listing, do check-ins and clean your space before guests arrive. You're essentially running a mini bed and breakfast. Fortunately, more and more startups are popping up offering all sorts of services to help hosts reduce the work load. A good example is Guesty, a company that provides an Airbnb listing management service, and Beyond Pricing, who provide a pricing application that optimizes the prices for Airbnb hosts.
Most people are apprehensive about letting random people from the internet into their homes. This is understandable. What if they destroy my home, cause disturbance to my neighbors or steal my stuff? As it turns out, negative experiences do happen, but are very rare. Airbnb has seem to have cultivated a community of respectful, travel loving people, who generally treat host's property and belongings with respect. In case there are damages, Airbnb provides a Host Guarantee that covers hosts for up to one million USD if the host's home insurance doesn't cover the damages.
This is part one of the Monetization Series, in which the author shares his knowledge on how to effectively monetize your assets, skills and knowledge.
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Join the conversation! Have you ever considered renting out your house, room or couch? What's your experience? I'd love to hear about it, comment below!