Now that we’ve opened up our Michigan Tree House and have opened it up to short-term rentals this summer, we’ve been getting enough questions about our experience to warrant a blog post. Today, we’re sharing the ups and the downs of our first season as Airbnb hosts! You can also view the listing (and bookmark it!) right here.
Back in 2017, we purchased a little fixer-upper in Lakeside, Michigan with the intent of renovating it over 18-24 months. Once complete, the goal has always been to keep the home open for a family getaway (or two) each month and list it on Airbnb for short term rentals throughout the summer and fall. The renovation went largely as planned, but ended up taking almost a year longer than intended. In March of this year, we were excited to announce that Tree House would be open for rentals, and then… pandemic.
The start of our summer season was delayed by almost two months, but with expanded cleaning and laundering protocols, we were happy to be up and running with short term rentals by the beginning of July. Bookings in May or June were either cancelled or moved to a later date with no penalty (we left the choice up to the individual), and we’ve been booked solid ever since! As we’re nearing the end of the summer season, we’ve been getting enough questions about our experience to warrant a blog post. One reader asks:
My husband and I are considering purchasing a second home for ourselves and are curious if you’d be willing to share your experience on renting Tree House as an Airbnb. How often do you use your home, do you use a property manager, what % of the nightly rate you take home, etc.? And is there any advice you’d give yourselves looking back?
To Self-Manage or Not to Self-Manage?
In Harbor Country (the collective name of the cluster of towns where Tree House is located), there are a few large scale management companies that will handle every aspect of a short-term rental. They’ll take care of marketing, photography, billing, cleaning, laundry and even small repairs. We reached out to a few of them, but one had an 18 month waiting list and another said they already had an overabundance of similar rentals and weren’t interested in taking on ours. Most wanted a 25% management fee. This isn’t to say that there’s not value in a turnkey operation that would handle everything. There absolutely is. But since Kim is a photographer, we have a built-in platform to market the home, and we do alright with home repairs, we didn’t think a management company would be as much value add for us as it might be for someone else.
Nightly Minimums. It’s a Thing.
In addition to the overlapping services, most rental management companies require 7 night minimums through peak season. A 7 night minimum was also our plan. But once the pandemic hit, we decided to decrease our minimum stay to 3 nights, which would allow for shorter, more budget-friendly visits for those looking for a break from quarantine life.
The downside to this philosophy? More turns means more self-management of check-ins and outs, more cleaning fees and more wear and tear on laundered bedding and towels. Next year, we’d like to switch the 7 night minimums, if only to help with lowering the cleaning costs. Note: While we do charge a cleaning fee with every booking, it only covers half the cost of the cleaning itself. This was a personal decision to charge less, since I know that I personally feel a bit bamboozled on the checkout screen when I see all the add-on charges!
Getting Organized + Stocked for Rental Season
Since we decided to go the self-management route, the next step was to take on the tasks of getting the home ready for rentals. It was very important to us that our guests were able to enjoy our home the way we intended as we’re a particular bunch around here. We gave everyting a lot of thought and made sure that all tasks were able to be repeated by our cleaning crew. The following is a quick (but not complete) list of the systems we needed to put in place before our first guests arrived:
- Interview and hire a cleaning/turnover company that we could trust. We live 90 minutes away, so handling turnovers ourselves wasn’t an option.
- Install locks on a few cabinets that are designated as ‘owner use only’.
- Learn how to use Airbnb from the ‘host’ side of things. Calendar management is critical!
- Purchase at least two sets of bedding for every bed so the cleaning company can take the used set to be laundered and returned.
- Stock up on provided essentials like hand soap, cleaning supplies, shampoo, conditioner, paper towels and TP. It was also necessary to have an organized space to store these items.
- Create an extensive guidebook of things to see, where to dine and where to play! (You can also view that here, if you’re interested.)
- Source local goodies to leave as a welcome gift for our guests.
We also deep-cleaned the home, touched up paint, made sure our old doors and windows weren’t ‘sticking’, and tidied inside every cabinet and closets. Think of it as nesting for the Airbnb host! That said, everything in the list above are pretty universal to every first time host.
How Often Do We Use the Home Now?
This is something we’ve had to work through to find the right balance. Since the start of our rental season was delayed by the pandemic and we’ve been overwhelmed by work at the Two Flat, we held off on our own trips to Tree House for most of June, all of July and part of August. We essentially prioritized all of the rescheduling over our own weekends away, to ensure that we could accommodate everyone without too much disruption to their schedules. Spoiler alert: That was not a good idea!
Upon our first visit back to Tree House after several guests, we realized that this wasn’t the best choice. Unfortunately, a large gap between visits meant that we weren’t able to keep up on tasks that aren’t directly handled by our cleaning company or our lawn care company. Small things like changing furnace filters, touching up scuffs on the walls and millwork, conditioning the leather sofa, making sure the shelves and closets stay organized and weeding the garden beds took a back burner – without us even realizing it.
Since then, we’ve agreed that one weekend in Michigan each month through the busy season is essential to maximize income, but also to enjoy the space ourselves and keep up on maintenance. We’re already planning on spending much more time at Tree House through the winter to make up for lost time, and winter in southwest Michigan is pure magic.
Rental Income vs. What We Really Bring Home
Since we’re not entirely through this rental season yet (we’re booked through mid-November), we can’t put a firm number on things. But after we factor in cleaning and maintenance expenses, the increased lawn maintenance schedule and setting aside enough of our profits for taxes, we estimate that we’ll end up with a net profit of around 50%. If that seems shocking, it felt a little shocking to us, too.
Even still, our net profit will be enough to pay the mortgage and all maintenance/operating costs for an entire year. We’re grateful to be in this position, and at the same time, I simply cannot stress enough how much time and effort goes into managing the home. Since we’re self-employed, we have the freedom to make our own schedules and handle things as they arise (like right now, right this second, I’ve made a quick trip up to fix a broken curtain rod). If work schedules were less flexible, these things could pose a huge challenge – that is, unless we hired a management company, which would take an additional fee.
Advice to our Former Selves
After a few unplanned glitches at the start (hey, COVID), we learned quickly that it’s best practice to stay in the home for at least a few days each month to make sure everything is operating properly. Our cleaning company has been great about being our ‘eyes and ears’ and letting us know when we’re low on supplies or if anything is in need of repair, but this actually took a small hiccup for all of us to be on the same page. And because they don’t actually handle any of the supply purchasing or repairs, this has led to a couple of quick up-and-back trips to handle small issues. Bottom line: Open communication between us and any caretakers is key, and be prepared to take a few unplanned trips if something goes wrong.
We’d also tell our former selves that staying organized and putting systems in place is critical, since the majority of hosting tasks need to be repeated every time a group of guests come and go. For example, we had to talk through our personal protocol for every new booking. For us, it looks like this:
- The moment we receive a new booking request, we book our cleaning crew on the checkout day.
- We assign our guests a temporary access code on our smart lock. Speaking of which, having a smart lock (we have this one) allows us to see when the home has been vacated and when the cleaning crew arrives!
- We send our guests an email, letting them know that we’re looking forward to hosting them.
- A few days before the trip, we send them another personal note that includes details on the check-in process, as well as where they can find our guidebook.
If you’re purchasing a home with the intent to offer it as a short-term rental, the best advice we could give would be to think through everything that make a vacation rental enjoyable for you, and then ensure that those things are in place. Period. Often-overlooked things like comfortable mattresses and bedding, a fully stocked kitchen and a great guidebook for the area are so helpful, and they’ve contributed to high ratings from our guests.
We hope our experience sheds a bit of light on the hosting side of short term rentals and can offer a bit of guidance to anyone considering the decision! It’s so rewarding to read the guest book entries about the memories that families and friends are making in this home, so much so, that Kim cried the first time we sat down to read them. We’ve poured so much love, time and effort into making Tree House a very special place, and it’s been a rewarding experience to know that others can feel it, too.
Leave us a note in the comments if you have any additional questions or if you’re an experienced host yourself. We’d love to soak up your knowledge. There’s always more to learn, especially as we make big decisions on the future of the Two Flat!