December Airbnb Update! Let’s breakdown how the month went.
Moving forward, I will standardize how I analyze the month. There will be three different sections to reflect on:
- Income – how much income I generated and if there were any ways I generated extra income
- Expenses – any major expenses that changed or increased/decreased for any reasons
- Guest Experiences – how many guests I hosted that month and any how my ratings went
To checkout how November went, click the link here.
December Income Generated
In December, I was able to generate $4,092 of income. Of the income generated, here is the breakdown:
- Nightly Stays: $3,152
- Cleaning Fees: $880
- Extra Charges: $60
Not a bad month from an income perspective. My Airbnb ended up being booked all but one night in the month! My nightly rate ended up dropping a little due to making some last minute deals on two of the stays. This is what allowed me to have a higher than normal occupancy rate.
The thought process I have is pretty simple. I would rather nights be booked than not. The majority of my guests book 2-4 weeks out. As I get closer to nights that are not booked, I begin to decrease the price each day by $1.
Updating the price of the night helps to do two things. First, it helps to increase the likelihood that my price is better than the competition. Second, it helps in your Airbnb listings SEO when you update pricing on your calendar.
The $60 of extra income came from one early check in ($20) and two nights of turning on the heat to my pool ($20/night * 2 nights = $40). Don’t forget that you can always generate more revenue after guests book!
December Expenses
From an expense standpoint, there were two main drivers behind higher expenses. First, my electric bill increased from $192 to $302 in December. The main reason for this increase came from heating the pool. This is something I charge my guests an extra $20/night to turn on. I am still working to determine the actual cost per day for having this turned on. I had to get a new pool pump earlier this month and believe my electric bill will decrease due to that.
The second expense I added this month was a CapEx line item. This line was left out of the November update, and I want to make sure there is full transparency on numbers. You should always budget to have CapEx every month whether or not it is used. CapEx is used for larger capital expenses. Examples of these expense types are replacing a pull pump, replacing an AC unit, etc.
My assumption for CapEx is 10% of my expenses. This is a common assumption used for analyzing properties.
December Guest Experiences
Now time to look at how many guests I hosted this last month. In the month of December, I hosted 46 guests across 7 different bookings. Of the 7 stays, I received 6 reviews. Of the 6 reviews, four were 5 star and two were 4 star.
Here are some of the reviews left by my guests:
“Great place, awesome and responsive owner. Very fast to answer any questions I had. Very clean and pleasant place to stay, I would definitely stay again.” – 4 star review
“We really enjoyed our stay at YRB’s place. The location was great, far enough away that you didn’t have to deal with traffic to go to the store but close enough to get to parks and outlets. The condo was very spacious and had all the amenities we needed.” – 5 star review
“YRB’s place is superb !! Very clean and tidy , My family loved it !! The place is very secured and lots of amenities in the area and communicating with them is a breeze .. I would really see myself to re-book at their place and highly recommended to anyone .. more power to them and God Bless” – 5 star review
“Great location and easy access. Lots of space and great amenities.” – 4 star review
What I Learned From the Reviews? When I received the first four star review on my listing, it hurt. I tried to figure out what I could have done better for the guest. As you can see from the above comments, there was no negative feedback on the 4 star reviews specifically. This is all well and good, but made me go back to the drawing board.
From now on, I have updated my message sent to the guests after their first night asking them a simple question. To let me know if there is anything so far that would prevent them from leaving a 5 star review that I can immediately address. Something simple, yet hopefully effective. I was recently listening to a podcast where the host mentioned they put this in their message and no longer received 4 star reviews. Will see how it works!
Key Takeaways:
- December seems to be one of the better months of the year. Overall occupancy and income were strong.
- Don’t forget to account for capital expenses in your monthly P&L statement. A lot of people talk about cash flow, but leave out CapEx
- Don’t let a 4 star review get you down. Some guests have never stayed in an Airbnb and compare your place to a hotel in certain ways. Try to offer the best experience for the guests and be responsive to any issues.
Don’t forget @TheYoungRetireeBy33’s 3 Core Principles:
1 – Your money should make money for you⠀⠀⠀⠀⠀⠀⠀⠀⠀
2 – Start early to realize the power of compound interest⠀⠀⠀⠀⠀⠀⠀⠀⠀
3 – Eliminate your largest expense by house hacking
