We just completed our first full month on Airbnb. We had 20 days booked, and we made $2,000!

The real excitement for me is that the space we are using for Airbnb used to just be storage space for us…collecting junk and really not adding any value to our lives.

Now, though, we have transformed it into a beautiful getaway that people are really enjoying…

LOCATION – Why would anyone want to stay in Garfield, NJ?

What was really surprising is that the day we listed our space on Airbnb, it was booked! And the next day, and the next…

We had no reviews as hosts. I did have 5 reviews as an Airbnb guest on my account, but I was shocked at how quickly we booked up.

Our Airbnb is in Garfield, NJ, a suburban town about 20 minutes from NYC by car. We also have buses and trains that go into the city, so not the closest in proximity to the city by a long shot, but not an impossible journey either.

Six months ago, I reached out to (at the time) the only Airbnb host in Garfield. He graciously met me at Dunkin’ Donuts and told me that he had an 85% occupancy rate for his little basement apartment with pull-out couches.

I was shocked and asked if they all came to go to the city. He said no, the majority of guests were out-of-towners who were attending a wedding at one of the three wedding venues we have in town.

So, you never know why people stay anywhere, but ask those around you who are hosting.

 

Questions

I had a lot of questions before I got started:

• How much does Airbnb take from your earnings?
  • Surprisingly, only 3%.
    • So, if someone books a place for $70/night, they also pay the $30 cleaning fee. We take home a total of $97, and Airbnb gets $3.
      • Hosts don’t see it, but Airbnb also charges guests a service fee of 5%-15% when booking.
• Can I screen potential guests?
  • Yes, you can turn a guest’s ability to book instantly on or off. If it’s off, you manually review their profile and request and reject/approve each one.
    • With Instant Bookings you can set eligibility criteria (previously reviewed, has government ID on file, has profile picture, no negative reviews)
• Can I block dates?
  • Yes, Airbnb makes it easy to view your booking calendar and easily block off dates from being booked.
    • You can also set it so no one can book more than a certain time in the future (i.e. no bookings past 3 months from now)
• Can I set check-in/check-out times?
  • Yes, it’s custom – we set it for 11 am check-out and 3 pm check-in.
• How much flexibility is there in setting pricing on a night’s stay?
  • A lot, there is:
    • Automated Smart Pricing: sets the lowest and highest price (for us, it’s $75 – $175/night), which adjusts automatically based on supply and demand
    • Flat Pricing: one standard price
    • Custom Date Pricing: go to the calendar and manually adjust certain dates (holidays, days you’re busy, etc.) for whatever dollar amount you want.
    • Week-long & Monthly Discounts: we give a custom 10% discount for anyone staying more than six days.
    • Extra People Fees: it’s custom, but we charge an extra $10/night per person after the first two guests.
    • Cleaning Fee: set at any price you want per stay. We charge $30.
• Taxes and Fees?
  • In NJ, where we live, Airbnb automatically charges the tenant Hotel & Occupancy Tax that our state will collect.
• Can I add an assistant to help manage my Airbnb account?
  • You can add CoHosts to your listing who can:
    • Accept, decline, cancel, or alter reservations
    • See and respond to guest messages
    • Edit pricing and availability
    • Edit the listing description (such as pricing, photos, etc.)
    • Interact with customer service on your behalf
    • Co-hosts do not see payout info or the host’s personal details

Step-by-Step Process of Running the Airbnb

Typically, we receive a reservation confirmation a week or so before a stay, but we have our listing set up to accept reservations till 6 pm the day of, which does happen occasionally.

See the image below to follow along, but here is the general step-by-step process:

1. Receive confirmation email/text from Airbnb with guest’s reason for staying (we made this mandatory).

2. One of us (Sunmarie is a co-host) responds with a saved message that includes a link with instructions and key code for the lock.

3. Below is the instructions guests receive, telling them where to park, how to access the unit, our contact info, and other details pertaining to the apartment. We also have a laminated copy of this sheet in our Airbnb.

4. From there, it is usually pretty automated; they park their car and check in with the digital keypad.

5. If there are any inquiries during their stay, we will communicate via the Airbnb app but usually have zero physical interaction with our guests.

6. Guests check out by 11 am.

7. Cleaning team (a.k.a Sunmarie’s mom) arrives ideally around 11:30 to start turning over the unit. Below is the checklist she follows.

We recently hired Sunmarie’s mom to turn over the unit for us. It takes her about an hour and a half, and she gets to keep the $30 cleaning fee we charge. She is retired, so it’s great pocket money for her. We generally ask her to turn over the unit as soon as someone departs so it is ready immediately for when the next guest books. As to supplies (next section), we are still buying most of them ourselves and storing them in a separate laundry room on premises.

Ideally, I would like to hire someone who does it all: manages communication on the app, cleans the unit, and buys and maintains all the consumables. If you are local and interested, let me know.

The Real Costs of Running an Airbnb

In the title I stated that we made $2,000 in the first month, but that is actually just what Airbnb deposited into my bank account.

There are costs associated with running an Airbnb space: unless you are cleaning it yourself, you have to pay a cleaning person. Plus, you have to pay the utilities and for consumables and wear-and-tear items.

Below is a breakdown of the costs per stay; most of these are estimates based on average use.

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Utilities: It has only been a month, but based on our utility bill and all the appliances, I am estimating $50/month on average throughout the year. With the average guest staying two days, I would estimate spending $5 on utilities per stay.

Cleaning: The cleaning fee ($30) will go straight to the cleaner for every stay.

Consumables: It costs on average $3.50 in consumables per stay:

• Bottle of water for each guest (Costco 40-pack = $2.99) = average 3 bottles per stay: $0.22
• Japanese chocolate snack per stay (32-pack = $7.99) = $0.36
• Makeup wipes (20-pack = $5.97) = $0.60
• Shampoo/conditioner + soap (50-pack = $25.99) = $1.04
• K-cup coffee (120-pack = $34.99) = $0.58
• Creamer (180-pack = $9.59) = $0.16
• Sugar (200-pack = $10.19) = $0.10
• Stirrers (500-pack = $7.99) = $0.02
• Toilet paper (30 rolls = $19.99) = $0.15
• Tissues (4-pack = $5.99) = $0.15
• Paper towels (12-pack = $19.99) = $0.05
• Garbage bags (200 bags = $13.99) = $0.07

Wear & tear items: things wear out and get stained; by my best estimate, these costs total $1.00 per stay:

• Sheets & pillow cases (200 stays = $24.70 queen + 2x $29.70 twins) = $0.40
• Bath towels (300 stays = $30 4-pack) = $0.10
• Hand towels (400 stays = $22 6-pack) = $0.05
• Face/wash cloths* (200 stays = $12 24-pack) = $0.06
• Mattress pad cover waterproof (500 stays = $27 queen + 2x $25 twins) = $0.15
• Duvet covers (500 stays = $28 queen + 2x $26 twins) = $0.15
• Bath mat (100 Stays = $9.99) = $0.10

*For whatever reason, 33% of guests feel it is fine to wipe their makeup all over the face/wash cloth, which is very hard to get out (vinegar and soap); because of this, we decided to get much lower-quality wash cloths compared to our luxury bath and hand towels.

Cleaning supplies: supplies used to clean and turn over the apartment cost about $0.40 per turnover:

• Laundry detergent (one pod per stay) = $0.09
• Bleach (one bottle) = $0.08
• Nitrile gloves (one pair) = $0.14
• Simple Green spray cleaner = $0.09

One-time purchases: $4,250

A lot of this stuff we bought second-hand whenever possible: eBay, Facebook Marketplace, Craigslist, Amazon Warehouse Deals, etc. We also took advantage of Black Friday sales.

• Digital deadbolt keypad: $58
• Mini-Split (Heat and A/C): $700 For 9RLFW1 Unit, plus $550 labor to install = $1,250
• Microwave: $40
• Mini-fridge: $75 off Craigslist
• Trash can: $13
• Keurig coffee machine: $20 off Craigslist
• Blu-Ray/Netflix: $62
• Japanese DVDs: $83 (My favorites bought off Amazon and eBay)
• Projector: Bought used 720P, 3200 Lumen off eBay, $103
• Projector screen: $69
• HDMI wall plate: $9
• Towel rack, toiler paper dispenser: $28
• Shower rod: $19
• Shower curtain: $17
• Japanese floor chairs: 4 leg-less chairs for $149
• Charging cables: 2x for $24
• Wireless router (Wi-Fi): Free from a friend
• Switch router: $9, extended internet from home to Airbnb
• Handheld vacuum: $19 (powerful little rechargeable vacuum)
• Kotatsu heater: $75
• Kotatsu blanket: $150
• Outlet countdown timer: $12 (Shuts off heater automatically)
• Dohm white noise machine: $30
• Bamboo bench/shoe rack: $20 Craigslist purchase
• Japanese kimono quilt: $100 at a local Japanese art show
• Japanese kimono girl painting: $10 at a local Japanese art show
• Japanese gong: $10 (craigslist)
• Futons: $200 x 2 twins, $75 queen off Craigslist
• Pillows: $15 x 3 (softer), $20 x 3 (firm); these are great feather pillows from Ikea
• Blankets: $50 x 2 (twin) + $70 (queen)

 

• Flooring: NuCore luxury vinyl ($2.79/sq ft) = $670
• Stain: $7.18
• Vanity: $120
• Vanity mirror: $30
• Toilet: $119
• Shower head: $15
• Misc wood: $350 (From Home Depot and Lowe’s)
• Rice Paper: $45 (with glue, etc.)

Total one-time expenses: $4,250

 

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So, in total we spent probably quite a bit more than the regular airbnb’er. In summary:

•  $3.50 per stay for consumables
•  $5 per stay for utilities
•  $30 per stay for cleaning
•  $1 per stay for wear & tear
•  $0.40 per stay for cleaning supplies

That is a total of $40 per stay in expenses.

We made $2,000 for 20 stays, so that was $800 in expenses, resulting in a profit of $1,200.

So, if we keep making the same amount of profit, it would take 3.5 months to recoup the $4,250 of one-time expenses we paid to get this Airbnb up and running… then it’s all gravy!

How would your life be different with an extra $14,400 a year?

Preparing and Outfitting the Airbnb

Face it, people stay in your Airbnb over a traditional hotel for usually one of two reasons: it’s cheaper or there is something it offers that a hotel doesn’t, like a full kitchen, some service, more privacy, or some personalized ambiance.

What we decided to do was make our Airbnb a uniquely Japanese experience. Having both been to Japan and being half Japanese myself, this jibed with us, but the added benefit was that it made the space flexible.

Unlike traditional beds, the futons can easily be stored in the closet if we want to use the space for a workout room or art studio. This gave it multiple purposes and a sense that we weren’t wasting our investment should the Airbnb not work out.

The Great Renovation

As mentioned before, this in-law suite was unfinished and under-utilized. We pretty much just stored whatever we didn’t want in there.

Next step was to make the Kotatsu:

A video detailing how I made the Kotatsu table

 

Next step was building out the Shoji screen windows

A video showing the steps to making your own Shoji screen window

 

Next, we had to install the flooring! We installed new flooring, Luxury Vinyl Plank, our favorite type of flooring because it lasts a long time, is waterproof, is relatively inexpensive, and looks great! This particular flooring was Spalted Maple from NuCore, sold exclusively at Floor & Décor for $2.79/sq ft.

 

The next step was to build the central wooden structure from our initial plans:

Although not mentioned earlier, we needed some sort of heating and a/c system for the unit. We decided on a Mini-Split, because they are efficient, provide both a/c & heat, and we would only need one since it is such a small space. These systems are also very popular in Japan, so it was overall a great fit.

 

And last, but not least, here is a before-and-after of the bathroom!

We also added a ton of small touches to make the Airbnb as accommodating as possible. Mini-fridge, microwave, DVD player with a ton of Japanese anime, NYC tourist guide books, local menus, charging cables, etc.

 

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As can be seen, a lot of thought, work and love went into this project, but because of that people have taken notice! 23 reviews averaging 4.9 stars!

If you would like help starting your own Airbnb, please sign up for a host account using this referral link (you’ll get $25, and I’ll get something too) and I’ll be happy to be your mentor: www.airbnb.com/r/sunnyb3535

If you don’t want to host but just want to experience stays at other great Airbnbs, sign up with my referral link to get $55 off your first stay!

If you are ever in the NYC area, click this link to stay at the Fuji-San Hotel.

Thanks for reading, and please comment with your favorite touch or suggest what anime we should add to our collection.