Turn Your Spare Space into Serious Cash: How to Make Money on Airbnb, HomeAway, FlipKey, Booking.com, and More!

By Mary Christensen

Why not make money off that empty room? Home-hosting platforms like Airbnb have inspired millions of homeowners to start a vacation rental business. Before you leap, let this book steer you in the right direction.

One room is all it takes to generate real income-if you know what you're doing. The short-stay marketplace has grown increasingly competitive. Bad reviews can torpedo bookings, while problem guests can strain your property and sanity. Written by an experienced host who earned almost $50,000 in her first year, this book provides an unvarnished picture of what to expect and step-by-step instructions for succeeding in your new venture.

Packed with stories both heart-warming and hair-raising, Turn Your Spare Space into Serious Cash explains how to:

• Prepare your space
• Price it right
• Choose the best hosting websites
• Make your listing pop
• Offer a welcoming experience
• Keep even the most demanding guests happy
• Get five-star reviews
• Protect your privacy and your property
• Stay on top of legal, tax, and business matters

Sharing your home with strangers can be frustrating and disruptive, or fun and lucrative. This useful guide helps you minimize the headaches and maximize your rewards.

• Language: English
• Publisher: Thomas Nelson
• Release date: May 29, 2018
• ISBN: 9780814439678

Mary Christensen

MARY CHRISTENSEN is one of the most sought-after speakers on the direct selling circuit and the author of Be a Network Marketing Superstar, Be a Recruiting Superstar, and Be a Party Plan Superstar.

Book preview

Acknowledgments

Thank you, Ellen Kadin, Executive Editor, AMACOM Books, for your support and encouragement through the six books we have created together, and Therese Mausser, Director, Rights and International Sales, AMACOM Books, for introducing my books to readers worldwide.

Thank you, Samantha Walker, Wayne Christensen, and Lyndel Hardy, for your many suggestions that helped shape the final manuscript.

Introduction

The first place I booked through a hosting website was an apartment in Perth, Australia. I was en route to India, and Perth was the ideal stopover.

My young assistant suggested that I consider private accommodation. After searching available hotels, she declared that they were too far from the action, too shabby, or too expensive. She showed me pictures of a high-rise apartment that was perfect in every way. It had a wraparound balcony and panoramic views. It was a short stroll to shops and restaurants in one direction and a river walk in the other.

I booked it immediately.

My host messaged to say he was away, and his mother would be waiting to give me the keys. She proudly showed me the property her son had purchased as an investment. He planned to pay the mortgage by renting it to long-term tenants, but after doing the math realized that he would earn twice as much by renting it out for short stays, even allowing for times the apartment would be unoccupied.

The day I flew out of Perth, the owner was back in town and drove me to the airport. On the way, we talked. He traveled a lot on business, lived in the apartment when he was in town and it wasn’t rented out, and camped at his parents’ house when it was. At twenty-four, he had a foot on the property ladder and, true to his millennial roots, was living some of the time at home with his mom.

My second hosted stay followed a couple months later. I was cycling with a group in a remote part of New Zealand. Accommodation options were limited, and most of the group bunked down in a campground. I was holding out for a room to myself, and a shower I didn’t have to wait in line for. I found it in a three-bedroom home owned by a young couple, five minutes from the cycle trail.

He worked a regular job, and she had left work to be a stay-at-home mom. As money was in short supply, they listed one of the rooms for short-term stays.

Although traveling was off their agenda for a few years, they wanted to expose their children to different cultures. They had a world map pinned to the wall so their children could see where their guests were from, and how far they had traveled.

I stumbled into hosted accommodation, but I was soon hooked. Wherever I go, I can find a property that meets my needs. If I’m traveling on business I like to be in the heart of the action, but without the monotony of inner-city hotels. I can stay in an apartment with more character and more facilities for the same price or less as a hotel on the same street.

I’m currently searching VRBO (Vacation Rental By Owner) for a family vacation. There will be at least seven of us, including young children. We want to stay together without paying exorbitant rates for a family suite in a hotel, or a hotel that won’t guarantee connected or even adjoining rooms.

We’ve often been frustrated by this standard response from hotels when we’ve requested connected or adjoining rooms for a family vacation: We’ll note your request, but can’t guarantee connecting rooms until you check in. Getting the rooms you want is a lottery, and you don’t find out if you have won or lost until it’s too late to book somewhere else. Hosting platforms take away that risk. You book what you want, and you get what you book.

If the property falls short of what you were promised, the hosting website you booked through will have your back. Keeping hosts honest is part of their promise.

Two years after I first became a guest, my husband, Wayne, and I decided to list our spare bedroom on a hosting website. It wasn’t an overnight decision. At first, we thought about what could go wrong by opening our home to travelers. But the chance to turn our spare space into cash was irresistible. Besides, the best part of traveling is meeting new and interesting people. How cool to have them show up at our doorstep.

Our city, the resort area of Queenstown, New Zealand, is one of the most vibrant home-hosting environs worldwide. One in every seven houses is listed on a short-stay site, and competition is fierce. Yet our spare bedrooms generate over $50,000 a year with little disruption to our daily lives. Apart from some minor upgrades to accommodate paying guests at the start, our expenses are minimal. We turn our listing off when we’re going away or family and friends are coming to stay.

We run a hands-on enterprise. Our guests are sleeping down the hall. But the lessons we learned are universal. Most of our guests have been delightful and only a few dreadful. We have missed opportunities and made mistakes. Through trial and error, we have learned how to handle dramas and disasters while turning our spare rooms into a lucrative business.

Regardless of the space you have to rent, this book will help fast track your success. By understanding the risks and rewards that come with sharing your home with strangers, you’ll avoid the mistakes we made and enjoy many magical moments hosting travelers from around the world.

This book will give you practical advice on the keys to succeeding as a home host:

• Put your property’s best face forward

• Make your listing pop

• Establish your house rules

• Turn lookers into bookers

• Get top dollar for your space

• Attract stellar reviews

• Minimize your expenses

• Manage your business legitimately

• Respond to doubters and detractors

• Avoid burnout

In short, everything we wish we’d known when we started our journey as hosts.

You don’t have to live in a vacation hotspot or own a flashy pad to make money as a host. Some travelers will pay top dollar for a luxury experience, but there’s a market for every budget. Some travelers will sleep on a fold-down couch in your living room, if the price is right.

People who book private stays are seeking an experience hotels can’t deliver. They’ll happily swap the tedium of a hotel room for authenticity and adventure. The uncertain nature of bunking down with strangers is part of the thrill.

Home hosts are equally diverse. Some become hosts to make ends meet, others to fund travel or big-ticket purchases. Many hosts live alongside their guests; others open their dwellings to short-term tenants when they’re traveling. Increasing numbers of homeowners are renting out their vacation homes or becoming seasonal hosts to take advantage of the influx of visitors during peak demand.

Many hosts in our area take in long-term tenants during the winter, and short-stay travelers in the summer when visitor numbers swell. Having the flexibility to adapt to changes in demand is one of the benefits of hosting.

Home hosting has quickly become one of the most successful home-based business enterprises of all time. Millions of homeowners, from all spectrums of life, have been inspired to open their homes to travelers and turn their spare space into serious cash.

Even the occasional short-stay guest can make a big difference. If an extra $100 a week would transform your household, hosting is a fun way to earn it.

What appeals to many hosts is that you don’t need a hospitality background or even commercial experience to succeed. You can learn as you earn. You don’t have to make radical changes to your lifestyle. You choose when your property will be available, the amenities and services you will provide, and how much engagement you have with guests.

You’ll be in business for yourself, but not by yourself. Your hosting website will provide all the information you’ll need and a wealth of support on demand. There are thousands of independent host-support groups you can join. Whether their properties are in Colorado, Croatia, Cambodia, or the Cayman Islands, hosts share similar experiences and concerns. The global hosting community is a rich resource for hosts who want to maximize their income and minimize their stress and mistakes by learning from other hosts.

The best part of hosting is that you will not be creating a need. You will be meeting a need. There’s a growing thirst for more authentic travel experiences.

When we polled our guests about why they booked private stays, three answers topped the list: Staying with locals and getting insider tips on where to go and what to do was number one. Next, guests thought hotels were old school. They preferred the uncertainty and adventure of home stays. The third factor was value. Guests liked getting more bang for their buck (extra space, free Wi-Fi, and other amenities) when they booked privately.

Hosting websites have revolutionized the travel industry. They have captured the imagination of travelers and given hosts an exciting new way to make money.

If you’re ready to turn your spare space into serious cash, welcome aboard the hosting express!

TURN YOUR SPARE SPACE INTO SERIOUS CASH

1

Choosing the Best Site

Hosting platforms did not invent private accommodations. Privately owned guesthouses have offered travelers an alternative to hotel stays for centuries, with hosts relying on a sign at the gate, a notice in print media, or a visitor center to advertise their lodgings.

Technology simply expedited the process of linking accommodation seekers and providers. By creating a marketplace where people with space to rent can connect with people looking for somewhere to stay, online hosting platforms upended the accommodation business in almost every country worldwide. Home hosts have left the traditional accommodation providers spinning in their wake.

By giving travelers access to a mindboggling range of lodgings, from treehouses and tents to inner city penthouses and everything in between, online hosting platforms have transformed how we book and where we stay.

While hotel conglomerates scramble to reinvent themselves, booking sites are mushrooming.

The current estimated value of the short-term rental market is $34 billion. Google added a drop-down option in selected European cities in 2017 that allows searchers to focus their accommodation search on vacation rentals. If the goliath Google gets in on the action, it will be a game changer.

Millions of travelers from nearly two hundred countries now choose to stay at privately owned properties. One company, Airbnb, has more rooms available on any one night than the world’s two biggest hotel chains combined. Travel industry research group Phocuswright has predicted that private accommodations will produce $37 billion in 2018 in the United States alone.

Thousands of new hosts sign on every day, and while the market is nowhere near saturated, competition for guests is heating up. In some neighborhoods, the growth is explosive. A traveler with limited choices a few years ago now has hundreds, and possibly thousands, of options.

The growth has also swelled the number of hosting platforms vying for your listing. You can partner with one hosting platform, or several. You can experiment with one site, and if you’re not happy, switch to another.

Four giants currently dominate the market. Two of them operate under a range of brands. HomeAway owns VRBO, VacationRentals.com, and Homelidays, and TripAdvisor owns FlipKey, Holidaylettings, HouseTrip, and Niumba. Airbnb and Booking.com each operate as a single brand.

Booking.com is the largest online booking site worldwide and has the most traffic through its site. Its popularity can probably be attributed to its policy of fee-free bookings for travelers, and that it offers both hotel and private accommodations. But it doesn’t vet guests, so hosts have no control over quality. We prefer to have a say in who stays in our home, but if your property is a self-contained unit, or a breeze to maintain, Booking.com will give you the greatest visibility.

VRBO specializes in entire homes and apartments, which makes it attractive if you’re targeting families and groups.

We chose Airbnb, because it is set up for home sharing, offers low host fees, and takes care of the financial transactions. It suits hands-on hosts like us who rent out rooms, but hosts can also list entire properties.

Our neighbor, whose house is almost identical, hires property managers to manage his business. He doesn’t live there and rents out the whole house. His property managers advertise on several sites, but get most of their bookings from Booking.com.

If you do a simple search, you’ll find an abundance of information online, including charts comparing the pros, cons, fees, and requirements of each site. (Property management companies and business consultants post much of the information to attract business. You’ll also find a liberal sprinkling of anecdotal information posted by bloggers. The more you read, the more balanced the information and advice will be.)

The best place to start is to find a hosting website that offers the type of accommodation you provide.

Private apartment, studio, or house. Your guests won’t be sharing with you or anyone else.

Private bedroom. Your guests will have their own private bedroom and may have a private bathroom. They may share the kitchen, living room, or bathroom with you or other guests.

Shared space: You don’t have to give guests a separate room. You can list a blow-up mattress in your living room if you like.

In addition to searching for dominant players in your area, investigate niche platforms that cater to travelers with specific lifestyles, interests, and circumstances. Accommodating college football fans, gay travelers, disabled travelers, couch-surfers, and even campers looking for a place to park on residential driveways, farm paddocks, or vineyards can be lucrative.

Pay special attention to the fees each site charges, as they vary widely. Airbnb, TripAdvisor, and FlipKey have low host fees, but their guest fees are among the highest of all the platforms. This may deter some travelers from using their sites and reduce your pool of potential guests. On VRBO and Booking.com, travelers pay no fees, and the sites earn the bulk of their income from host fees.

You can also choose a hosting website that is best structured to the amount of business you expect. Some sites, including VRBO, offer hosts the option to pay either an annual subscription or a per-booking fee. If your property is available for year-round rentals, a subscription plan may be best; a pay-per-booking fee will be cheaper if your rentals are irregular.

When you’re weighing your options, consider the type of travelers you hope to attract, the price you want to charge, the competition in your area, and how busy you want to be.

You can also choose how you want to be paid.