House Hacking via Airbnb

[Jody Powell]

Hi all, I wanted to share my recent experiences with turning our garage studio apartment conversion into a short term rental. We have had great success and so far no real issues. The income has paid for the mortgage for the entire last 11 months (not including renovations and supplies).

In November 2014 we bought and moved into a house that already had a small apartment in the converted garage. When I say small, I am talking about under 300 sf including the bathroom and kitchenette. The previous owners had rented it for $500/month. Having the potential to rent this out was one of the reasons we bought this house and we originally planned on using it as a long term rental. After we moved in I decided that I wanted to renovate it first, as it was very ugly--drop ceilings with a single fluorescent light, dirty carpet, ugly paint etc. 

Here is the photo I grabbed off of a realty site after I purchased the house. There is also a small bathroom and a small kitchenette.

This is the only before picture I took. I had opened up the drop ceiling to see what was up there. Turns out there was another ceiling about a foot above this one. There was a light fixture and everything. No telling why they put in the drop ceiling. I was a bit slow on renovating it, but after a couple of months my wife encouraged me to get into it--time being money and all that. I am not extremely experienced and had been getting our living area up to snuff. I also work a full time job, so there is my other excuse. 

One of the first things I did was...fall off the ladder. You can see the bent drop ceiling strut I grabbed onto as I fell. This helped me to land on my feet, so no damage done. 

As I decided to do this myself while also working a full time job (with very little experience in renovation, did I mention that excuse?) it took me a couple or three months to finish. This experience taught me that I need to get organized, have a budget and a timeline and that I do not ever want to do drywall again. 

I was going to show more progress pics, but I will restrain myself and just jump to the end photos.

In these pictures you can see that a queen bed takes up a good portion of the room, but there is enough space to have a small table and a couple of comfy chairs. We decided to not put a television in, as we are not TV people and we prefer to encourage our guests to get out and explore beautiful Central Oregon. I believe we have only had one guest even mention it as a lack. 

We do provide wifi and a pair of speakers if they want music or to watch Netflix on their laptop or tablet. 

Bend is known for its outdoor activities (skiing, biking, kayaking, rock climbing, hiking, floating the river through town--they just finished a standing wave park in the river for surfers, kayakers and floaters to enjoy) and for its amazing breweries. We are not in walking distance to anything special but we are a bike ride or very short drive to downtown. 

Okay on to the first (almost) year numbers:

Over the course of the last 11 months, (sorry, once I decided I wanted to post this I couldn't wait another month to make it to a year) we have had:

76 guests 

163 nights 

85% 5 star reviews

Reached Superhost status on our first assessment 

Lessons learned:

Instant Book We started with Instant Book turned off, but soon realized that we had no issues with any of our guests and were approving almost anyone who wanted to stay. So we decided to try Instant Book. Greatest idea ever! YMMV, but we have had zero problems and rarely miss an opportunity. 

First Message When we started I had a very brief first message that went out when they booked. After several guests would ask questions about directions and how to get the key (all information that is in their itinerary) I beefed up my first message by telling them to look for their itinerary under the "My Trips" tab in their account. Boom, that took care of that issue. Then I realized that I might be able to influence them to leave me a 5 star review. I put the following in my first message: "We strive for a 5 star review, please let us know if we are not living up to it!" 

Keyless Entry I made the choice going into this to put a keyless entry lock on the door. I do not want to be tied to meeting every guest for a key exchange--my time is better spent elsewhere. Also, we had experienced some difficulty getting a key when we stayed at a vacation rental previously, so to me this was a no brainer. 

Reviews It is really difficult to write reviews of people you never meet, who leave the space in basically the same condition when they leave. So I made 3 templates for reviews (they all say basically the same thing) and just copy paste one of them when it is time to do a review. 

Superhost As I mentioned in "First Message" above, we send out a welcome message that includes specific verbiage to nudge guests to leave a 5 star review. To be honest, I am not convinced that any more effort is warranted. I do not think the Superhost status is all that important to a potential guest, it does not influence where I show up in the search results on the Airbnb platform (as far as I can tell) and it may even have a negative impact in setting expectations of the guest too high. 

Local Taxes For the first 3 months I was unaware of the city regulations regarding city taxes. I knew I had to pay them, but I thought it was a yearly or at most quarterly thing. Well I was wrong--it was due monthly. I ended up paying a 10% penalty for that mistake. Now I make sure to get my taxes done and in by the 15th of the following month. Know your city regulations and be sure to follow them. 

State and Federal Taxes When I first began this project I was not very good about keeping receipts, especially for smaller items or quick trips to the orange box home improvement store. As a result I probably lost out on a couple of hundred dollars in tax write offs. Now I have a filing system (that my wife helped me to design) that keeps my receipts categorized for next tax season. 

Cleaning Currently my wife does the cleaning of the unit. She works from home and it only takes her a half hour for turnover (when I do it, it takes an hour at the least). We have paid a cleaner to come by if we are out of town, but that is a rare occurrence. The guest pays $30 for the cleaning fee. Also, my wife thinks it is a testament to humanity that a lot of guests make the bed before they check out.

Seasonal While our town has plenty of winter activities, there is a definite downturn in visitors starting in the fall going through the spring. Even so, we are still bringing in more than if we had just rented it out long term.

Visible Address Our house has the address on the front porch, but I do not always remember to turn on the porch light. After a guest mentioned that they had trouble finding us when they arrived after dark, I added a new house number at the end of the house closest to the driveway, which is lit by the street light. 

HVAC When we remodeled the main part of the house, we installed a whole house mini-split ductless heat pump and we put one of the 3 heads out in the Studio. They are all tied together. Now if the guests want cool and we want heat the units will not work--Meaning we have to coordinate with the guests. This is really only an issue a couple of weeks in the spring and fall.

Marketing I have not yet built a website or signed up with other vacation rental websites, however this is definitely something I am interested in. 

So there is our (almost) first year as Airbnb hosts. I am sure there are more lessons to be learned, more guests to host and plenty of room for improvement! 

I would love to hear from others who are house hacking via Airbnb! 

How do you do it? 

What am I missing or what could I improve? 

What experiences have you had?