I haven’t taken Brian pages class, but am familiar with the overall concept of the method. This is also coming from the framework of my local market (Omaha) which can’t sustain as of an average cost per night as someplace more touristy. That actually helps me because it means less competition and less regulation from local governments, but that’s a topic for another post!
With the numbers in my market, the Brian page formula does not make sense. Here is an example:
Monthly expenses
Rent: 1200
Utilities/WiFi: 200
Consumables: 100
Start up cost: 3,000 (so let’s say 250/month for a year lease). This includes furniture, electronics, multiple sets of bedsheets, cosmetic upgrades, kitchenware, towels, etc etc
Insurance: 50
Total: 1,800
For a 3 bedroom 1 bath house, we get about 80 in the low season and 100 in the high season. There are special events where we can charge 300+ a night, but that is only for about two weeks out of the year. There are also times in low season where there is higher vacancy. So let’s say an average of 90/night.
With 90/night, you would have to be booked for 20 nights a month to just break even. If you are booked completely the entire month, you will have a profit of 900. This doesn’t take into account Airbnb fees, taxes, or management fees if you choose to hire out messaging or pricing.
Airbnb is a lot of work. Even if you automate check ins, messages, and cleanings, you still need to be available 24/7 in case something happens. I’ve had guests message me at 5 am because a light bulb is burnt out and they want it fixed immediately. I’ve had guests who can’t figure out how to work an electronic keypad or tv, despite manuals and video explanations. My favorite was when we had a sewage back up into the guests shower, so at 10:00 on a Friday night I’m calling plumbers to bring their augur over, and cleaning up raw sewage. On top of paying the plumber extra I also had to refund the guest a portion of their stay for the inconvenience. My second favorite is when we had a group smoking meth in our basement and broke all the beds. :) Anyway, my point is that when there is a sewage back up the guests are going to call you, not the landlord. And you might have to pay to fix it, even though you don’t own the property.
If the stove breaks in a regular rental on a Saturday, the landlord can take a few days to get a new one. If you’re renting it out on Airbnb it needs to be fixed immediately or else you will need to refund your guest. If you find a landlord willing to let you Airbnb our their place, is the landlord going to fix the stove soon enough?
I have had months where we have broken even, or only made a couple hundred in profit. But we are happy with it since we are at least still building equity in the houses because we own them. If you are renting the house and break even, or worse at a loss, you have done all of that work with zero profit to show for it.
So if you live in an area where the numbers work, go for it. But also consider what your time and energy is worth. As others have said, is the risk worth it? For me, the amount of time and risk that goes into an Airbnb only works if I own the property and can increase my equity. I would be better off getting a second job at the gap than using Brian pages formula.
