One of our Guest Suites has now been on Airbnb for over a year! One question we get asked quite often is, “How much can I make on Airbnb?” In order to help answer that question, we’ve asked our client to share their Airbnb info and they have generously done so. Below we’ll go through the numbers.
Disclaimer: Profitability will vary greatly based on many factors such as location, decoration, host, amenities, etc., so these numbers will vary by Guest Suite. The below numbers are a case study only and we make no guarantee on results.
By The Numbers
- Sample Duration: 5/4/2017 – 7/12/2018, 435 days
- Number of Guests: 159, 2.375 days average stay
- Occupancy rate: 87%
- Average rate per night: $95.69 + $22.48 cleaning fee
- Total Income: $38,144.98 (Nightly Rate + Cleaning Fee – Host Fees)
- Income per year: $32,000.00 (rounded)
Making $32,000.00/year from one of our Guest Suites sounds amazing! There are a few bits of information we can pull from these numbers. First of all, the $32,000.00 is income and therefore subject to tax. Depending on which bracket you are in, you may see 1/4 or more of that going to taxes. There are also operating expenses that can act as tax deductions. Then there is the work. With an average of 134 guests per year, that’s 134 loads of laundry (bedding, towels), 134 times stripping and making a bed, 134 cleanings of the unit, so on and so forth. There is also the human element. Some guests want to talk, get suggestions, and socialize. Some guests do not. In any case, there is a bit of communication and interaction with each guest.
If you’re willing to put in the work, a net income of $24,000.00/year (after taxes) can help immensely with anyone’s finances. This can be put directly towards paying off the Guest Suite, paying it off in roughly 4 years time while adding a valuable asset to your property. With a longer term loan to finance initial construction costs, this amount of income would be a great source of supplemental income. No matter your financial situation, a Guest Suite will add an income stream while simultaneously building equity in a valuable asset on your property.
If you’re interested in building a Guest Suite to generate additional income, please complete our form below to get started.