#23: 3 Amateur Mistakes To Avoid As An Airbnb Investor

July 11, 2023 • Estimated Reading Time: 9 minutes

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3 Amateur Mistakes To Avoid As An Airbnb Investor

Since being a SuperHost for several years and primarily a real estate investor, I want to share some of my knowledge to fellow investors. 

Rather than sharing the obvious mistakes like not using professional photographs for your listing or furnishing your listing with the bare minimum, I’m going to highlight some higher-level mistakes.

  1. Failing To Accurately Project Property Performance

It’s clear why this is a big deal. A property can either be a money-maker or a money-loser. Just properties just can’t be profitable, no matter how much you spend on furnishings.

Short term rental investors incur more expenses so the stakes are higher. Additional expenses include utilities, internet, higher cost for repairs (trust me, people don’t treat your property like they would their own), furnishing replacements (things break unfortunately), maintenance costs, and contractor labor & trip costs.

Income isn’t fixed either so accurately projecting income is another skill investors should learn. Like any financial model, you need to input reasonable assumptions using data to support it. This means competitive nightly rates, peak and off-peak months, expense forecast, etc. 

You can’t just pray and hope it works out. The analysis must be objective. My short term rental calculator provides these expense fields to be inputted so nothing is missed!

  1. Assuming Short Term Renting Is Covered In The Insurance Policy

Landlord insurance covers rentals with long-term leases. In the fine print of typical landlord insurance policies, claims are not covered for short-term use. To protect yourself financially, your property must be covered for short term rental use, which is why I always get a quote from Steadily, a highly rated landlord insurance provider that offers short term rental coverage! 

I’ve seen countless posts from people who were in financial distress because they made a claim with their insurance only to be denied because the property was a short term rental. You can get a free online quote from Steadily here.

Then the hosts were at the mercy of Airbnb’s host coverage policy, which can take weeks to months to finalize! The claims process with Airbnb requires invoices and photos along with an investigation and review process. It’s also not really a guarantee they’ll compensate you fully. It’s all up to Airbnb.

Even for a simple claim for a broken PC monitor that a guest claimed my cleaner caused, it took a few days to finalize. Imagine how long it’ll take when a drain backs up and floods the entire floor.

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  1. Not Automating Tasks To Give Yourself More Free Time

I’m a huge supporter of self-managing your own properties if you have short-term rentals. Most investors have maybe a couple properties, which are very easy to manage even if they’re short term rentals. 

If anyone tells you that it takes too much time and is not worth self-managing, they’re probably not doing it right. 

Here’s why:

Most property management companies charge up to 30% of revenue to manage short term rentals. That’s A LOT of money to give up. 

At one point, I was self-managing 5 short-term rental listings and two long-term rentals. I know someone who self-manages 8 short-term rental listings and has a full-time job.

I spend an average of 1-2 hours a week managing my rentals. Most are just one-off messages and take a minute to respond. Sometimes, it could be longer if there’s a maintenance issue. But overall, it’s fairly easy because I set up systems to automate the things I can offload from myself.

Here are things I offload to give myself more time:

  • Automated Messages: I use Airbnb’s native tool to automatically send a message when I get a booking 5 minutes after it’s confirmed, the day before check-in, and the day before check-in. This allows me to portray the idea that I’m an attentive and communicative host. Also, this saves me time from saying the same thing over and over again to every guest. I could have seven different bookings for one property in a month. That’s a lot of time saved when you consider each message for each booking over a year.

  • Information Sharing: I created a digital guest book for each of my properties that gets shared through the message that gets sent before check-in. The guest book provides information to decrease the amount of messages I may receive from guests whether it’s local attractions, food recommendations, and property information. You can take a look at my template here.

  • Scheduling & Notifying Cleaners: Instead of sending a message to my cleaners on when my listing needs cleaning, I use Turno, which syncs calendars from Airbnb to my cleaner’s calendar. Every cleaner for rentals knows what Turno is and likely uses it already. With this, I don’t need to talk to my cleaners at all unless something comes up.

  • Smart Lock: Believe it or not, some people still use an actual key for guests to find in a lock box. Rather than confusing guests on where to find the key, I have my smart lock code in my check-in message. I use the Schlage Encode because I can remotely control it through my phone since it connects to the WiFi (no need for a smart home hub). One possible message asking where the lockbox is located is eliminated. Also, I know when my guest checks-in by getting notified when the lock is opened. 

It’s important to keep in mind that you still need a reliable team on-the-ground regardless to be truly effective. By implementing these four parts into your rental management, you decrease a significant amount of effort required to effectively manage your rentals. 

Why give out 30% of your earnings to a property manager who will likely not take care about your rental as much as you would for something that takes one to two hours of work every week?

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