How Much Our Airbnb Made in 2022

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This is the digital nomad quest podcast with Sharon Tseung. teaching people how to build passive income become financially free and design their best lives.

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Hey guys, it’s Sharon Tseung. And today we’re gonna go over exactly how much our Airbnb made in 2022. So basically in January 2022, we Airbnb out our primary home in the Bay Area, California to do an Airbnb house hack in Dallas, Texas. I know it sounds like a crazy decision to make such a big move. But to me, it was also like a social thing. So most of our friends wanted to stay home anyway or further away in the city, some of them had already started moving to different states to and we normally just kind of chat online. So in a social setting sense, it wouldn’t be a huge change that I would just chat online with my friends anyway. And in terms of homesickness, we will be able to visit pretty cheaply because Dallas flights aren’t that expensive back to the Bay Area. So to be honest, I was getting kind of bored and restless. And I wanted to live somewhere new because we had been living in the Bay area for a long time. And in my head, me and my husband were both young, we don’t have a family yet. We might as well try different places to live and we can make new friends experience new life somewhere else. And I’m really grateful we did this change because this past year has been amazing. Also in my head, I was thinking we can rent out our place to make up for both mortgages. So it was financially savvy, and I’ll go over these numbers in a bit. So this whole move was something I wanted to do in my life. I thought it was financially sound like I mentioned, but also it was adventurous outside of our comfort zone. I had traveled the world for two years by myself I never really like lived in another place for a whole year or more. Even in college. I had moved out to university, but it was still in the Bay Area. But yeah, I think this was one of the best decisions of my life. I really enjoyed living in Dallas and I’m glad Sean got more and more on board with my crazy ideas. I feel like if you’re ever feeling stuck and you want to do something different, don’t be afraid to live somewhere else and try like an Airbnb house hack or even digital nomad thing, right. It’s something I did in the past for two years traveling the world there are ways to make money online. There are ways to monetize so you can create that financial freedom for yourself to really live life being in Dallas, I was able to make close friends here we still get the same good Asian food and there’s more to do in my opinion, we also are closer to some of our properties. And by doing this we also managed to save a lot of money so rather than just paying over 2000 a month for our primary Bay Area home we managed to make enough from our Airbnb that offset the costs of both living expenses now let’s recap how we started the Airbnb and the journey of it well with this plan in place to move and Airbnb our home I started listing out all the different things we needed to do after we got some of it done and furnished we actually decided to list the house first and get some pictures going listing details to see if anyone would actually book and I thought this was a really smart idea and we highly recommend it if you guys are trying to start an Airbnb because it also kicked our butts into overdrive and allowed us to see if there was demand for the listing. We actually got an inquiry for November in 2021 which made us realize we had to work hard and get it fixed up by that time. One problem we had with air mean being our home was around storing belongings so when people do aremy be their primary home and like move to a different country or just travel for a while some people put everything in a closet but we had to store our belongings in the garage and tell people not to go past a certain point there and put security cameras up to make sure nothing got stolen because we just had a lot of stuff so we thought this was the best way and the garage is a converted one. So it would have been a four bedroom Airbnb but it ended up being a three bedroom and we just closed off the garage for this whole purpose. We also got remote locks so that we didn’t have to be local to let people in we could do it all from the comfort of our home in Dallas we can create new numbers automatically for our guests. We also fix up our bathroom our fence we planted grass in the front yard we painted the exterior found cleaners figured out our restocking situation and create an SOP for our cleaner to follow for every term so there’s actually a lot of work that goes into this whole getting ready process with the home for Airbnb and there’s also the little things to write like amenities guest books and by the way if you are interested in figuring out all the little things required we did take Michael elephant days course that helped a lot so I’ll put it in the link below. It helped us figure out what we needed to do for our listing and how we should prepare all this took months and we are also in escrow for our new home in Dallas. Like I mentioned we were moving to Dallas so we bought this house for $270,000 I had been looking around for two months for this house and we finally bought it but we bought it sight unseen which was kind of crazy. So we were preparing multiple things at once getting this air b&b ready but also moving out to another place so we can start running out the Bay Area Air b&b and then getting ready for the drive to Dallas to move into our new home so back to the Airbnb so after our November booking we actually boosted the Airbnb price a little bit. We got worried that we weren’t having any other reservations. We received some inquiries, but they were low balling us a lot and our place was actually below market price. So we were

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weren’t sure about lowering it even more, but it was around the holidays when the slow was happening. So Shawn thought maybe people would only book after it and that we could lower the price of January came around, and still no one book. But literally on January 2, when we were thinking of lowering the price, we did receive a booking and that initial booking was for January 3 to February 3, but they ended up extending to February 6, they paid $6,282.53, we received $5,509.12, for those 34 nights after the Airbnb fees. So that was around $162 A night, which is about $4,861 per 30 days after getting those bookings, it really started moving along, and we started getting more and more bookings. But because this is a midterm rental, so we were booking it out at 31 Plus nights, it was a lot harder to get bookings. In my opinion, the reason why we did 31 Plus nights was that the city regulations make it so that you can’t do short term rentals unless you actually lived in the house and got like a permit and things like that. So we’ve been doing midterm rentals. And to be honest, it’s been kind of nice, because we don’t have to worry about turns all the time. So we learned a lot. And we even got a negative review at one point. And initially, we did feel really sad because it was our primary residence that we had lived in it for a year together. But it was pretty unwarranted. They were flushing down baby wipes which screwed over our plumbing and we had to pay money to fix they’re talking trash about the city. And it was pretty ridiculous. Because towards the end, they kept trying to have us cancel the next guests so that they could stay longer. And we had to keep saying no, because you can’t do that to other guests. I think that’s what sparked them to write those negative things. And then we even came over at one point and move stuff for them because they wanted to get a desk in their bedroom. So we actually went over there and moved a desk into their bedroom, but they still thought we were being inconsiderate anyway, that really hurt us. But after a while, we figured out that we could speak with Airbnb and see if we could get that review removed. And we were able to since the review did violate Airbnbs terms like you can’t talk trash about the city, though it was good. We got that removed. And we learned a lot about the journey and how to manage remotely. We did a whole recap of everything. But I’m sure you guys want to know the numbers to see if it was really a success or not as an Airbnb house. So let’s go over the numbers and see if they make sense right now. So we had 308 days booked, which is an 84% occupancy rate and 16% vacancy, which I thought was pretty good. We had the end of August to end of September vacant and then in December, we had foundation work done. So that’s why there was that 16% vacancy rate. So here is the final number with the Airbnb income in 2022. We were paid out $50,631.09 for Airbnb. And this is after all the fees and everything. So let’s go over the expenses we have with this house hack. So first I’m going to talk about the Bay Area home expenses. So first off, we got property taxes at $375 per month homeowners insurance at $67 per month mortgage and flood insurance at 1857 per month that equals $2,299 per month for principal interest taxes and insurance. We’re also going to add $300 for utilities every single month. So that totals to $2,599 per month for the Bay Area home. Now let’s talk about the Dallas home the Dallas home principal and interest is $1,121 per month property taxes are at $205 per month homeowners insurance at $87.33 per month and then mortgage insurance for $166 per month. That equates to $1,579.33 per month. But also with utilities being around $300 We’re paying about $1,879.33 per month or the Dallas home. If you total both the Bay Area home expenses and the Dallas home expenses we have $4,478.33 per month for both home now expenses total for the year if you multiply that by 12 is $53,739.96 for the whole year. So we’re almost at break even because we made $50,631.09 for the Airbnb income are bit short because we added utilities for the Dallas home, which I didn’t do in my initial calculations. So we’re off by about $3,000. But if we were just looking at the numbers of the Bay Area, Airbnb and not the Dallas home, it’d be $31,188 for the year for expenses on it. And we would have made $18,951.96 from the Airbnb after expenses. So that’s pretty good. That number is essentially the true profit from the Airbnb. Now you guys might be wondering, was this all worth it? Well, if we rented it out long term, we may have been able to get $3,500 per month, which would be $42,000. So we made about $8,000 over which I think we could do better in the future. My husband Sean actually isn’t sure if it was worth it because of the work and sometimes stress but to me, it was like usually running out places long term. It’s not a furnished rental though you could do that right. But normally you have a free house where people will furnish it themselves. We had to store stuff in the garage and we couldn’t have people touching it. And also we wanted the freedom to be able to come back when we wanted to because we didn’t know how long we’d be renting it out.

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For we didn’t know if we were going to rent out the Bay Area home long term or maybe we didn’t like Dallas and we decided to go back but now we have that freedom and we can go back whenever we want to have a right now I’m like I love it here and I love the freedom to be able to travel and of course we did make more money doing this versus the long term rental and we were able to do some necessary foundation work on the house while the guests were gone for a period of time which can be expensed as it is for the business that would have been hard if people were in the house right we were able to do that work while the Airbnb guests were gone. Lastly, we were also able to achieve super host status which is good for our accounts or building the system in case we want to do more short term or midterm rentals if you guys haven’t seen my 2023 money goals video we are actually planning to move to Taiwan for a few months or a language immersion program which means we need to figure out how to Airbnb this primary home but because we’ve already built up an account gun reviews gun super host status I think it’s gonna really help our listing a lot when we do decide to list this house and we also want to get another short term rental here as well so I thought it was good to Airbnb out our home we really did essentially break even on our living costs we were just off by a little bit I think it’s even better that we’re able to buy this Dallas home acquire another property that is appreciating in value as well as breaking even on our living expenses versus paying $2,600 monthly for the burial home and never moving out. I think it was a solid financial decision in the future we plan on bumping up the price now that we really know what we’re doing and have good reviews and recently we actually did get a booking from May 1 to June 16 on VRBO The worry is always at all split up the calendar bookings but we wanted it anyway and so far this year we’ve had 80 Nights booked out already for $14,526 I think we’re gonna be able to make even more on this Airbnb moving forward especially with super host status and I really look forward to Airbnb being this home in Dallas can possibly another short term rental while we kind of digital nomad and live our lives so I hope you guys enjoyed this episode. I know I did a whole recap of the journey. If you guys really did want to you could have time skip to the part where we talk about how much we made but I did want to give an overall view of the journey and I did pop in some tips here and there. Hopefully it helped let me know what you think if it’s worth it to do a mid term rental or if it’s better to just go long term and just not deal with short term rentals at all. So I hope you guys enjoyed this episode. Please make sure to rate review and subscribe. It really helps our podcast grow. And thanks again. I’ll see you guys in the next one.

Transcribed by https://otter.ai