AIRBNB - How much can you make?

pnormal44

Lets say one owns a 4 bedroom 3 miles from City Centre on the Southside on the Dart Line. What sort of annual income could one expect to make by actively letting to AIRBNB renters. Also, what are the pitfalls?

Stheno

Every cent is subject to your higher rate of tax, plus PRSI and USC

Hollister11

Stheno wrote: »

Every cent is subject to your higher rate of tax, plus PRSI and USC

Probably 51% tax + costs

pnormal44

But if one is retired and this is ones only income, the tax would be at the power rate?

Stheno

pnormal44 wrote: »

But if one is retired and this is ones only income, the tax would be at the power rate?

Not if you exceed the lower tax thresholds. And afaik, your pension counts as taxable income also.
http://www.citizensinformation.ie/en/money_and_tax/personal_finance/pensions/taxation_of_pensions.html

How much are you planning on renting it out per day/week?

pnormal44

Whatever demand is out there? Is it a robust business with year round demand or just summer and holidays?

athtrasna

pnormal44 wrote: »

Whatever demand is out there? Is it a robust business with year round demand or just summer and holidays?

Impossible to answer that one. In your case I would look at a corporate let, offer it to Google or Facebook for their executive visitors, they pay you whether the house is in use or not. A much more straightforward way of letting.

PhoenixParker

How much you make will depend a huge amount on your exact location, the quality of the accommodation and exactly what you as a host are offering.

There is a shortage of accommodation in Dublin at the moment therefore there is good money to be made. Dublin is a year round destination with a huge number of weekend tourists so it's far more then summer and holiday season.

With 4 bedrooms a turnover of E500 a week should be readily achievable, beyond that it'll depend on how far you want to push it and decent reviews etc. As others have said it'll be subject to tax etc. And it's also worth nothing that it's not money for nothing, there's a fair bit of work involved. If your priority is generating a long term stable income for yourself, the better bet would probably be to sell the house and invest the money elsewhere.

Michael D Not Higgins

Would you still be living in the room at the end of the garden, OP? Or would you move into the house and just rent the bedrooms?

pnormal44

Unsure Michael. Cost me 10K to unload other problem!!

Michael D Not Higgins

pnormal44 wrote: »

Unsure Michael. Cost me 10K to unload other problem!!

I wouldn't advocate that method but it does seem to produce results in some cases and cost less than exhausting the legal route.

Renting the whole house out will get a better rate, I went to AirBnB and put in random dates for a weekend in July and got an average of €228/night for 4 guests for a whole flat/house. It was an average of €72/night for 2 guests in a private room, so you're getting half the amount for individual rooms as for the whole house.

The prices scale with number of people so renting the whole house out to 2 guests would get a lower amount but the way the system works is you can reject small groups for busier times to wait for a larger number. This happened to me when booking somewhere in Budapest for 4 people. The flat could technically sleep 10 so they rejected the request to wait for a larger group (there was also a music festival on at the time so high demand).

There's definitely some work in it. You need to hire a cleaner between guests or do it yourself, you need to manage meeting guests at sometimes odds hours and with a house you could be stuck with a stag group that end up being rowdy and having the neighbours complain about the noise.

pnormal44

Thanks Michael. Great advice. The stag group thing is significant. Makes me think I don't want to do it.

draiochtanois

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pnormal44

You are the moderator Michael and also give good advice for free. You are worth your weight in gold. What you get from this?

Michael D Not Higgins

pnormal44 wrote: »

Thanks Michael. Great advice. The stag group thing is significant. Makes me think I don't want to do it.

You could request no stag/hen groups. Remember that for AirBnB they have to request to book so you can reject them if you want, but also note that it's also based off ratings but I don't know if rejecting bookings affects that. You can block out dates that don't suit though so it's quite flexible.

pnormal44 wrote: »

You are the moderator Michael and also give good advice for free. You are worth your weight in gold. What you get from this?

Mods get cocaine and hookers according to the lore of boards.ie. It's all a lie though!

pnormal44

Hahahah - Isn't cocaine and hookers still illegal. And I though everything had to be legal here!!!!!!!

pnormal44

One more ques. Is Airbnb the only option. Or is Couch Surfing or some other site also viable options?

Effects

Hollister11 wrote: »

Probably 51% tax + costs

Your expenses are deducted so you're taxed on the net income minus expenses.

Michael D Not Higgins

pnormal44 wrote: »

Hahahah - Isn't cocaine and hookers still illegal. And I though everything had to be legal here!!!!!!!

That's why there's none to go around.

pnormal44 wrote: »

One more ques. Is Airbnb the only option. Or is Couch Surfing or some other site also viable options?

AirBnB are the biggest. I think Couch Surfing works on a different model where you let people stay for free in exchange for you being able to stay in other Couch Surfing places for free too.

Michael D Not Higgins

draiochtanois wrote: »

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Effects wrote: »

Your expenses are deducted so you're taxed on the net income minus expenses.

But cleaning costs are extra on AirBnB. They might be deductible from the total received but the tax would be on the room price. Definitely worth talking to a tax accountant to make maximum use of any deductible expenses.

My sister does it and you will make money, however there is a lot more work in it that you would think. Tax is not going to be your biggest expense unless you are doing in full time or have multiply rooms to rent out. it is amazing how people hone in on minor important issues while ignoring the bigger picture.

athtrasna

mariaalice wrote: »

My sister does it and you will make money, however there is a lot more work in it that you would think. Tax is not going to be your biggest expense unless you are doing in full time or have multiply rooms to rent out. it is amazing how people hone in on minor important issues while ignoring the bigger picture.

Tax at 51% is not minor! And the OP has indicated that they have a large house and they would be looking to do it full time so tax is a pretty major issue to factor in!

Mrs OBumble

athtrasna wrote: »

Tax at 51% is not minor! And the OP has indicated that they have a large house and they would be looking to do it full time so tax is a pretty major issue to factor in!

But it's only 51% if the OP has other income of 35k. For a pensioner who's looking to make extra money, that's unlikely.

Otherwise it's less.

And the costs of advertising, cleaning, cleaning materials and breakfast food for the quests etc are deductible.

OP forget couchsurfing - that's for people looking for cheap/free. If you are looking for BnB customers, you would be well advised to register with several sites, not just AirBnB.

Effects

Michael D Not Higgins wrote: »

They might be deductible from the total received but the tax would be on the room price. Definitely worth talking to a tax accountant to make maximum use of any deductible expenses.

I'm pretty sure that's not right. It's treated like any extra income. You deduct your expenses and pay tax on the remainder.

Michael D Not Higgins

Effects wrote: »

I'm pretty sure that's not right. It's treated like any extra income. You deduct your expenses and pay tax on the remainder.

I'm giving an example where the only expense is the cleaning cost, which is wholly covered by the contribution by the guest. That means the tax is on the room price. Of course there could be other deductions, which is why I mentioned talking to an accountant.

athtrasna

athtrasna wrote: »

Tax at 51% is not minor! And the OP has indicated that they have a large house and they would be looking to do it full time so tax is a pretty major issue to factor in!

My point is a lot of posters are about tax which is only one issue to look at, there is a lot more to it that that, you would make money from it if you are prepared to put the time in for example it puts a lot of constraints on your time with waiting around to give people keys ect.

athtrasna

mariaalice wrote: »

My point is a lot of posters are about tax which is only one issue to look at, there is a lot more to it that that, you would make money from it if you are prepared to put the time in for example it puts a lot of constraints on your time with waiting around to give people keys ect.

A key box with a variable code eliminates the need to do that for starters.

PhoenixParker

athtrasna wrote: »

A key box with a variable code eliminates the need to do that for starters.

It can do but it's unlikely to completely eliminate it.

For one thing that depends on the type of service you're offering. If you're doing BnB style in your own home, a guest will generally expect you to be there to greet them. I'd be particularly perturbed if I was doing BnB style and arrived to find multiple other guests but no sign of the owner at the property.

If you're renting the whole property a key box is more workable, but if it's normal waking hours most guests will still expect to be greeted and shown around the property by a real human being. If that's not done on arrival, they'll still expect a meeting at some point during their stay. You'll also need to be on call to answer any questions and sort any breakages or problems that arise. It's like the first week of new tenants in a flat every single week.

Chances are you'll also want to be there at check out to make sure the place is left in ok condition and that guests were happy with their stay.

Positive reviews are the key to airbnb and face time and human contact is the key to positive reviews.

newacc2015

The biggest issue with Airbnb is that I imagine you cant write off the mortgage interest against it. AFAIK you have to have a tenancy registered with the PRTB for mortgage interest relief. If you are on a tracker of 1% I wouldnt be too pushed about it. If you are on 5.6% interest, the mortgage interest relief on a sizeable mortgage is important

bleary

PhoenixParker wrote: »

If you're renting the whole property a key box is more workable, but if it's normal waking hours most guests will still expect to be greeted and shown around the property by a real human being.

Positive reviews are the key to airbnb and face time and human contact is the key to positive reviews.

I've rented a number of times on Air BNB
About half the time I've had a person actually meet me and then ask how things went.
It didn't affect my review at all and i see no difference as long as
1. I can access the property easily when I arrive
2. I can contact the owner and get a prompt reply.

The only time I have had an issue was when I rented a room and the owner was living there and the twit wouldn't respond or send me the information to get to the property.

If I wanted a B&B/hotel experience I would usually get one rather than try to rent an entire apt or house
It helps if an owner has a folder with local information , shops, restaurants, local interest and activities

draiochtanois

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