Just like in any other business, the goal of an Airbnb host is always to earn more profit. Airbnb investors can increase their profit margins by increasing their Airbnb rental income and reducing their rental property expenses. In this blog, we are going to focus on how you can reduce your Airbnb rental property expenses. Apart from the normal Airbnb fees, there are many other hidden operating costs of owning an Airbnb investment property. Learning how to save money as an Airbnb host is one of the most important skills you should have. Here are 9 of the best Airbnb host tips for saving money.
1. Find Good Deals on Necessities and Buy in Bulk
Just like hotels, an Airbnb business is also part of the hospitality industry. When renting out on Airbnb, there are some things that will need to be bought frequently. To provide a more personalized guest experience and stay ahead of the game, offering free toiletries and other accessories are some of the things that guests appreciate. This may include toilet paper, shampoo, bathing soap, coffee and tea, lightbulbs, linens, etc. If you are not careful, the cost of these necessities can add up and eat into your profits.
To make your buying process effective, you need to plan ahead. One of the best Airbnb host tips for saving money would be finding places where you can get good deals and purchase these necessities in bulk. Buying in bulk is usually cheaper. Take your time and search the market for an inexpensive source for your supplies. This will help you save a lot of money.
2. Use Energy Efficient Bulbs and Appliances
Using energy efficient bulbs for your Airbnb rental property is one of the most useful Airbnb host tips for saving money. Electricity is one of the major rental property expenses. So, it’s a good idea to replace the light bulbs in your guest’s most frequently used rooms with more efficient LED bulbs. You will be able to light your Airbnb rental property with the same amount of light for less. While they may be more expensive, in the long run, they will save money. They not only have lower energy use but are also more durable.
Using motion sensor lights, especially for outdoor lighting, can also provide efficient lighting. The light bulbs temporarily turn on when movement is detected within the sensor’s field of view. The light will remain on only when the sensor detects movement. A thermostat can also help reduce energy use by activating the heating system only when there is a guest at the property and deactivating it when no one is in. Such appliances can significantly reduce your electricity bills.
3. Remember Short-Term Rental Tax Deductions
Expenses associated with an Airbnb business are usually tax deductible. This can significantly reduce your tax bill and help you save money. When it comes to short-term rental tax deductions, make sure that you meet requirements. You must rent out your Airbnb rental property for at least 14 days per year. Otherwise, it will be considered as a second home and these tax deductions won’t apply. Speak with your accountant to know all the Airbnb-related tax deductions available to you.
4. Use Automation Software
As they say, time is money. One of the most efficient Airbnb host tips for saving money is the automation of some processes. You can use automation software in processes like sending automatic emails, structuring your bookings and tasks, etc. This helps to free up some of your time, which you can use to be productive elsewhere. Automation software also eliminates the need to hire more staff. If you have several Airbnb listings, this can save you a fortune. The good thing with such automation software is that you don’t have to be tech-savvy. They are usually pretty straightforward and easy to use.
5. Be Proactive in Maintenance
Owning an Airbnb investment property is not exactly a smooth ride. As an Airbnb host, you will need to perform regular maintenance. This includes plumbing, repainting, door repairs, replacement of worn out appliances, among other things. One of the critical Airbnb host tips that will help you save on cost is being proactive in maintenance. It is better to fix things early enough before they become irreparable or cause more issues. In the long run, this will help you save time and money.
6. Have an Emergency Fund
One of the smartest things an Airbnb host can do is to set aside sufficient cash reserves for emergencies. You can put a few dollars in a separate savings account to go towards handling unforeseen Airbnb-related costs. Every time you receive Airbnb rental income, ensure you deposit a small amount in this emergency fund. Having an emergency fund will help real estate investors avoid taking unnecessary loans in times of emergencies. Some of these loans have high interest rates which can greatly reduce your Airbnb profit margin during repayment.
7. Reduce Labor Costs
Labor is expensive, especially when it involves hiring real estate experts. One of the Airbnb host tips you can use to reduce the cost of labor is avoiding unnecessary high labor costs. Only hire professionals when you can’t do a task on your own. If you can do the minor repairs yourself instead of hiring an expert, you will be able to save a substantial amount of money. If you are not very busy and can manage your Airbnb rental properties yourself, there is no need for hiring professional Airbnb property management. You can also choose to higher cheaper labor. For instance, you can get an intern. Interns can work for free or offer cheaper labor.
8. Tweak Your Marketing to Reduce Costs
Cutting on your advertising and marketing costs is another important example of the Airbnb host tips for saving money. Sometimes Airbnb investors just throw money at marketing their rental property without knowing if it has a good return on investment. There are other lower-cost alternative methods of bringing awareness to your customers about your business.
First, ensure you have a captivating Airbnb profile with professionally taken photos and a good description. You can also show off your Airbnb business to your target market on social media like Facebook and Instagram for free. When it comes to social media, ensure you produce great content regularly. You should also be active and engage with customers to have a leg up on your competitors.
9. Institute a Minimum Stay
Cleaning and laundry services are among the biggest hidden costs of every short-term rental property. To cut back on these costs, you can choose to institute a minimum stay of three, four or five days. These costs will reduce since you will now be cleaning the guests’ rooms and doing laundry fewer times instead of daily. If your Airbnb business is occasional, you can even completely cut out the cleaning service and do it yourself.
The Bottom Line
Owning an Airbnb investment property comes with a lot of hidden operating expenses. To make as much money as possible as an Airbnb host, learning Airbnb host tips for saving money is critical. By using these Airbnb host tips, you will be able to make your Airbnb business more profitable.
If you’re looking for more information on how to be a successful Airbnb investor, be sure to check out Mashvisor for the latest Airbnb host tips. Mashvisor also has real estate investment tools that will help you in finding the best cities for Airbnb investment and the best Airbnb rental properties. Mashvisor’s Airbnb profit calculator is the ultimate tool when it comes to finding Airbnb rental properties with a good return on investment. You can use it to keep track of expenses and calculate Airbnb rental income, Airbnb occupancy rate, Airbnb cash on cash return, Airbnb cap rate, and Airbnb cash flow. Learn more.