A lot of what I am reading about is on the topic of flipping houses which does not really interest me. What does interest me is buying and holding. This means I have to put some type of revenue generating tenants in the space. Either by renting it to a business or by renting it to people that want to live there.

Either way is fine with me actually but I think the easier beginner move is to rent it out to people. So the next question is do I want to do the traditional year lease or do I want to get on board the new AirBNB model?


While deciding this of course I did the obvious thing and googled how to make money on airbnb. There were some great articles of course.

The AirBNB Experiment - affordanything.com:

Luckily for me someone else had posted the results of their own experiment with AirBNB so I could learn from their mistakes. Here are a couple of my takeaways:

The Numbers:

She does a great job breaking down the exact numbers and it turns out that it is noticeably more profitable to run the AirBNB or short term rental then to run the longer term. There are some additional costs like supplying the furniture and increased cleaning costs but over all the numbers look promising.


In the comments there was an interesting debate over if the insurance would change for AirBNBs vs traditional rentals. The author said that it would not but others said that it did to their insurance companies. I just need to remember to find one where it doesn't raise my price any.


One of my favorite parts of this post is how she explains exactly how she started to automate the process so she could free herself to focus on the big picture. Obviously I will try to do the same as soon as is feasible for the business.

Other Notes:

The author of affordanything.com seems to have a lot of traditional rental experience which I do not. This means if I run the same experiment I cannot expect the same results. There are all sorts of little things that the author probably takes for granted that I no nothing about and would cause issue with my execution. But I am sure that is not the only variable that is different. For example obviously the property location, one of the biggest factors, is going to be different.

I also stumbled on to this interesting little post: Behind-the-Scenes: How I Manage Real Estate from Around the Globe

How to Make Money as an Airbnb Host:

There was a lot of good info in there. Mostly stuff you would expect but I highlighted some gems of knowledge I found interesting below:

Pick Your Launch Carefully:

"Time your launch to give you a jump-start. Try scheduling your opening at the same time as a big local event that will boost demand."

The Clock Is Ticking Once Your Listed:

"Airbnb also gives a temporary search-results boost to new hosts to help them gain their first customers. However, once that window expires, your ranking will be decided by your reviews, price, and location. So it’s important to get some happy visitors early on."

Price Low Until You Have Good Reviews:

"One way to find out is to compare your space with other current listings nearby. If you’re just starting out, knock off $20 or more per night until you get some positive reviews under your belt"

Other Services:

They also list some other services I plan on researching in the future.

Interesting Comment #1 - AirBNB class:

Someone posted a link to a class that might be interesting. I am making note so I can check it out later.

Interesting Comment #2 - AirDNA Data Analytic:



Finally I made it to the actual AirBNB website. Don't ask why I didn't start here. Most the stuff was pretty obvious but there were a few things that stand out to me.

Cancellation Penalties:

There are some penalties you can face that you should be aware of. For example the
Cancellation Penalties.

Long Term Guest Risks:

Evidently if you host a guest longer than 30 days there can be some legal issues. They have a whole post you should review before jumping in.

A Crash Course in Becoming an Airbnb Host:

I decided to try and find posts about running an AirBNB in Wisconsin. The I found was fairly general but did have two good points at the end:

"Asking price: The best way to get good reviews (even more important than good photos!) is to start with an unbeatable price. Once the online love starts pouring in, you can raise your rates."

"Be clean: Bad marks for cleanliness can really kill your Airbnb traffic."

My Thoughts:

Overall it looks pretty sweet. But I have some concerns.

My Concerns:


Taxes are always tricky. Luckily it looks like I am not the only one that thinks that. From what I can gather from their tax page AirBNB has build in tools and services to help make it easier to deal with.

I also read a couple things on a hotel tax rate in addition to normal sales tax so I tried searching Google for "what is wisconsin hotel tax rate". The main answer was as follows:

"Wisconsin State Sales Tax: 5 % - 5.6 % depending upon municipality.Wisconsin Hotel/Motel.
Room Occupancy Tax of varying amounts which is levied by municipalities."

Property Damage:

What happens if someone opens a meth house or throws a party and burns the place down? It looks like AirBNB offers a Host Guarantee or Host Protection Insurance to cover anything insane but not basic wear and tare.

As for the little stuff like stains on the carpet and scuffs on the walls I have a plan for that. Everyone that knows me knows I am not big on amenities. I am a person of simple tastes and prefer function over form. So my solution is two fold:

If it is expensive it will need to be durable:

Hard wood floors, concrete counters, no frills. An example would be my desk. I have had this desk for years and have moved it in and out of at least 1/2 a dozen apartments. All my desk is is two of those big metal garage shelving units modified slightly with plexiglass.

If it is breakable it better be cheap:

Keep the things around the house that they are likely to use cheap. I don't drink coffee so I am totally cool with leaving an inexpensive coffee maker there.

Though I don't want the place to be completely spartan. I also could cover the walls with my own art. I will just have to start painting landscapes. Or I could take a hint from my friend Joel and just print out the blueprints for the house and hang it on the walls.

Maybe even take it a step further and get local business to advertise by giving me art/tasteful references to their business that I can hang on the wall... that might be taking it a bit to far.

Next Steps:

I already started researching areas where I am interested in purchasing. Finding the price is easy. Finding the occupancy is not so easy. AirDNA claims their full report can show the occupancy. If I can't figure it out somewhere else I will come back to AirDNA to check it out.

Once I have the prices and the occupancy of similar properties to the properties I am researching to buy I can estimate the amount of annual revenue I could expect.

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