Last updated on January 17th, 2024
In the tumultuous real estate landscape of late 2022, I put my beloved investment property a few hours outside of Melbourne in one of the goldfield towns on the market for sale. My tenants had moved out, scared away by the prospect of a new landlord, and suspecting selling might take some time, I decided it might be prudent to hedge against failure by testing the waters of Airbnb hosting, converting my century old renovated miner’s cottage into a charming retreat for travellers. Nestled a town steeped in gold rush history and teeming with tourists, the prospects seemed promising.
Setting up my my Airbnb, I went to great lengths to deck out the place. From Airbnb’s must haves to thoughtful extras, I went all in. Balancing my fulltime employment in Melbourne with hosting duties, I shuffled between the two cities, crashing at my mum’s place when the guests rolled in. The grind was real – weekly top tier cleanups and constant upkeep. But it paid off handsomely, earning me the coveted superhost status and an impressive average rating that danced above the 4.8 star mark. I charged $100 for a weeknight, and $160 on a Friday and Saturday night with a 2 night minimum. I was making more than I would in rent, and it was functioning as my own house as well; I felt like a financial genius. Just as well because the house wasn’t selling, so I pulled it from the market and committed to Airbnb.
Running an Airbnb wasn’t all sunshine and rainbows though. Living in the property while hosting added another layer of complexity. Balancing the comfort of my personal space with delivering a top notch experience guests expected required finesse. Every week I’d have to deep clean the house to an end of lease standard, which was at least made easier by the fact I’d done the same clean a week earlier. All of my personal belongings had to be shoved away in my locked off bedroom, the bathroom, pantry and fridge all cleaned out. It was a real hassle. The experience underscored the importance of a separate bathroom and scaled back kitchen access, minimising the hassle of constant cleaning. I’d also consider engaging an Airbnb cleaning service, it didn’t make sense to do it all myself when I could hire someone for $100 a clean to do the majority of the work.
Key Lessons I Learned from Self Hosting an Airbnb:
Necessity is Key
Don’t bother trying to meet all of Airbnb’s requests for additional amenities like workstations, restrained furniture, BBQs, etc – unless you have a good reason for it. Airbnb will push you to keep adding amenities, which I found weren’t used and didn’t impact my bookings at all.
Pet vs. Kid Friendly
Choose wisely between kid friendly and pet friendly – it’s an either or situation. Neither is also a good option. It’s a lot of extra work to list as child friendly. I tried to be both pet friendly and child friendly, and it bit me with a one star review from an anxious parent. Children spend a lot of time on the ground, and parents, especially new ones, will give you a poor review for the slightest bit of dust. In my view, you need to choose between pet friendly or child friendly, and those with pets are usually just grateful you’ve let their pet stay. I already had a dog, and my property was perfect for pets, with hard floors and a large secure yard, so it made sense for me to be a pet friendly property. It didn’t make sense for me to try and facilitate a child friendly property.
Personal Connections
Building pre-stay rapport with guests is more than just a tip; it’s absolutely necessarry if you want to be a superhost. It makes a big difference. There are essentially two groups of people. Those that understand unless something serious went wrong, with consideration to the nightly rate, it should be 5 stars. Then there’s the other group that believes that nothing deserves 100% and there’s always room for improvement. I once had a guest leave a 4 star review based on value, and when I asked what I might do to improve the value, he said “nothing, I thought it was great value!” The latter group makes achieving the 4.8 star Superhost status very difficult, and throw in the odd 1 or 2 stars from a neurotic new parent, and you’re left struggling. Doing it properly means reaching out to guests before they arrive and making them see you as a person, not a business. A person they would feel bad for if they left a bad review – after all – you’re friends now, right? Seal the deal with a bespoke local gift, maybe a locally made pillow mint or a local bottle of wine.
Bathroom and kitchen
If you’re going to live in the property you are inviting guests into, having your own separate bathroom and kitchen would make a big difference in your comfort. It would be much easier to not have to live out of a toiletries bag, and need to clean the oven, stove and fridge out every. single. week.
Airbnb Property Management - The Big Mistake:
If I had a time machine and could go back to the point I decided to seek Airbnb property management, and not, I would. It all went awry when I was offered a position as a caretaker for a large empty house in Mt Eliza. I would stay in the granny flat and in return maintain the property. A good deal, but it put me too far away from my Airbnb in the goldfields to keep running it myself, and I didn’t need two homes either. As I considered whether I should put my property back up for rent or find an alternative solution to keep running it as an Airbnb, I hit upon something on Google one night. An ad from Airbnb flashed up to the top of my screen “Airbnb Management Melbourne.” I went down the rabbit hole, and here was Airbnb themselves recommending potential airbnb rental management companies to me. People who would manage the property and look after everything. Fantastic, I thought.
The First Airbnb Property Management Co host
What a mistake. The first Airbnb management co host I put on seemed great and accommodating at first but quickly became difficult to work with. They became domineering and stubborn and impossible to work with. After only 2 short weeks, they informed me by SMS that they had decided to go a different direction with their business and instead of Airbnb property management, they were going to rent out houses and run them themselves. Instead of being annoyed, I felt a wave of relief rush over me that I wouldn’t have to disentangle myself from this person I’d perhaps too quickly rushed into a working relationship with. Perhaps I had put too much credence on Airbnb’s apparent recommendation of them. When the co host refused to pay me my share of the booking income and Airbnb did absolutely nothing to help, instead referring me to the police and my local court system, I lost my trust in Airbnb and realised I shouldn’t trust their recommendations
The Second Airbnb Property Management Co host
Ultimately, the house ended up being off the platform for a month, in which time I’d found a new Airbnb manager, based locally like the first, and also recommended by Airbnb. This time I did more due diligence and checked for other reviews, and was a bit more hesitant to dive right in. But ultimately, I did, and my attitude was that as long as the place made more than I’d have made renting it after I’d paid for utility bills, that was ok.
After 2 months the place was making less than half of what I’d get if I rented it out, and that was before I’d paid for utilities. The problem was that the Airbnb manager wasn’t managing the property. Their idea of managing was to get good initial photos, list the property on booking.com and Airbnb, call the cleaner, and respond to customers if they made contact. When I arrived after not checking the place for 2 months, the bins and letterbox were overflowing, and the lawn was a foot tall. The robot mower which I’d been promised would be looked after hadn’t been properly attended to, and so hadn’t done its job. And worse, I hadn’t been notified about the state of my property whose care I’d entrusted to a manager. To this point, I’d not bothered to check the listing, but my faith in the Airbnb manager had been shaken. Upon checking, I saw the average rating – 3.4. Because the Airbnb rental management company hadn’t been reaching out to guests, they’d not been getting the best reviews. The latest review, a 1 star review, lamented the dirty beds, and the dangerous height of the lawn for their dog in a pet friendly property. When I checked the beds a few weeks later, I found them all to have significant dirt marks on the top of the doona covers. A dirty beds review is perhaps the worst you can possibly get, and a business I was paying good money to manage the property had failed to ensure the beds were appropriately clean.
Since that guest had stayed, another had stayed after I’d brought the lawns back down and cleaned up the garden. When I asked the Airbnb manager if they would please reach out to this guest and beg for a good review to put the 1 star review at least not right at the top, my contact responded, “I don’t beg.” When I asked for the guests contact details so I could do it, they dropped me as a customer. It was at this point I’d now been through 2 out of the 3 Airbnb managers in the local area; the third never returned my call. It was time to give up. It just didn’t work with a manager. I put the property back up for long term rent in January 2024 and called it a day.
Key Lessons I Learned From Engaging Airbnb Property Management
The main reason I think that it didn’t work with Airbnb rental management companies was twofold. First, the limited pool of potential Airbnb managers in a small town meant I wasn’t getting the best of the best, or anything even approaching this. The property wasn’t managed well, and pricing wasn’t adjusted dynamically. The second problem was the comparatively low nightly rate paired with a substantial cleaning cost. The best occupancy I had was around 25% when it needed to hit closer to 70% to make it a better option than renting out to a long term tenant. And to do that the pricing would need to be adjusted for midweeks, time of year, and all the other factors when I believe it was just up for the one expensive fixed nightly rate every day of the year of approximately $240.
The second problem was the comparatively low nightly rate that was achievable for the property coupled with the high cost of airbnb cleaning services of around $185 a go on an average 2 night stay. Add the 10-20% charged by Airbnb rental management companies that was taken off the top of everything including cleaning, and there was just nothing left. The cleaning fee was made worse by the relative size of the property as well; it would have been better to have something smaller than a three bedroom detached house.
All up my Airbnb management experience was a failure, and I think it always would have been. Were my property able to be rented out for significantly more per night by being in a trendy Melbourne suburb or inner city, then I think it would be different. There would be access to more and better Airbnb management in Melbourne. Booking fees can be much higher, and the cleaning cost as a percentage of total revenue would be lower.
The main takeaway for those considering Airbnb management in Melbourne or Victoria is this – It is much harder to make the economics stack up when you bring in an Airbnb cleaning service and Airbnb management. Realistically it’s unlikely to work outside of Melbourne unless you’re self hosting. If you’re self hosting it can be a great earner and pay the bills, but for regional Victorians, forget about Airbnb property management for your Airbnb.