Last updated on September 8th, 2020
Today’s guest is Michelle. She runs 5 Airbnb listings in Kimberely in British Columbia, Canada. This town is well known for its ski and golf resorts. The occupancy rate of her listings goes up to 95% during the high season like Summer, and down to 50% during the low season. During the high season, the net revenue is about $3,000 per month for a 2 bedroom apartment. For your reference, a quick google search shows that a 2bedroom apartment in Kimberely is between 150 – 200k USD.
Podcast summary!
- How Michelle got started with her first Airbnb rental 4 years ago 1:04
- Occupancy Rate during high and low season 5:21
- Revenue during high and Low season. 6:08
- Airbnb rental starting cost 8:36
- Impact of Covid-19 in her Airbnb listings 10:15
Full Interview Transcript
Jae Seok An
When did you start your first vacation rental?
Michelle
It was almost four years ago now. We had been talking with some people that were renting out a year of all things on Airbnb that it was their, their home, but they decided to rent it out on Airbnb and rent a place for themselves long term because they made more money renting the yurt out. And you know, we we heard about that, talk to them about it. And then about a year later, we had one of our apartments our long term rentals came available and we decided as an experiment to try the Airbnb because we’ve had some really bad tenants and our laws and BC are very very stringent on evictions and getting people out. You just can’t they have more rights than the landlords. So we decided to experiment and see if we Airbnb at least if they’re bad, you know, they’re gone in two days. Yeah. So that took off like, like, we, it was unbelievable. We couldn’t believe how, how fast it booked up. And we didn’t we didn’t know we could make a lot more money than we were making. So that was a bit of a surprise to us. And so I think a month later another of our units came available. So we just put that on and we haven’t looked back as soon as you know, people of course, we didn’t push anybody out. But as soon as they moved, we just didn’t rent it out. Again. We just put it on Airbnb.
Jae Seok An
Right. I think See? So how many properties were you renting out or long term before?
Michelle
Just to start with it was four, right? But we renovated our building, and we now have five that we can rent out. We live in one. So there’s six total units. But we’ve created another unit as a direct result of our success on Airbnb and short term rentals.
Jae Seok An
Right? I see. So when you started your first Airbnb on 2016, you already had four available listings to start to it.
Michelle
Well, to start with, no, we only had the one and then the like we had them but they were all long term. So as they became available, so our first one, our first one we rented and then the second one was a month later and then about six months later, our third one came available. And very shortly after that, our fourth one came available. And then of course, the fifth one We have created,
Jae Seok An
right? You mean you build the house on the land?
Michelle
It’s a it’s a small commercial building with apartments in it. So it’s it’s an apartment building.
Jae Seok An
Right. So you have purchased the property or did you just rent? Oh, I
Michelle
see. Yes, yes. No, we bought the building probably about six years ago.
Jae Seok An
Right? And you just renovated to operate it as an Airbnb.
Michelle
Well, we renovated and initially to do short term rentals, right. But the the last unit we transferred some of the commercial space to create a unit for renting specifically on Airbnb.
Jae Seok An
I see understand, and what has been your occupancy rate like for those four listings well
Michelle
Until recently it’s been about 70 to 80% and climbing every day from from month to month it was going up and of course then this this whole thing hitting it crashed. But I was I was looking at a projected 98%. Within this summer coming summer, we would have been booked solid for all our units.
Jae Seok An
I see. Right.
What was the seasonal effect like in your area?
Pardon me? What’s your seasonal effect?
Michelle
Oh, yeah. our busiest season is the summer which is strange for a ski town but I think that’s due to the golfing and hiking. Then our next busiest season is of course the winter for for skiing. But our slow season is November and April. The rest of the time, our occupancy might be a little bit on the lower side like 50 to 60%.
In say May,
and maybe October, but the rest of the time. It’s been really good occupancy.
Jae Seok An
Right? That means above 80% Yes, usually. Gotcha. And how, how much of the profit Have you made per month with those 80% occupancy rate in the good month?
Michelle
In a good month, um, you know what, I’m just gonna I have my spreadsheet available. And I can tell you for I think our best month last last year was August and of course, we didn’t have our fifth unit online at that point and our actual net earnings after we pay all our taxes and fees, and all that That was about $8,000. Oh, nope, sorry, it was our better month was July. And our net was over $11,000, almost $12,000
Jae Seok An
or four properties, right?
Michelle
For four properties. Yeah, the fifth one we brought online just before this pandemic hit. So we didn’t have a chance to really get it going. And as soon as the pandemic hit, we took it off, and we’re not renting it at all, because it’s a lockout to our own place and just want to have the security there.
Jae Seok An
I see. You said each of that profit, so that means it’s after paying the
way do you need to pay the rent or mortgage or not?
Michelle
We do pay a mortgage, but our mortgage is very low. It’s only about 1200 dollars. So when I say the net profit, that’s not including our operating costs of Hydro and, you know, supplies and that kind of thing. But I’m just going by our net earnings as far as taxes and fees that we have to pay to the booking agents and the government.
Jae Seok An
I see understood Oh,
Michelle
after that, I would guess we’re probably looking for the 11 $12,000 a month, we’re probably looking at about $7,000 because we’re doing the cleaning ourselves right now.
Jae Seok An
I see.
So, yeah, so
about $5,000 per month were spent on mortgage, other bills, supplies, right, all those things. Yeah. I see. There’s two. What was the starting cost like for you to start your first project 40 from long term rental to occasion rental.
Michelle
Well, that’s that’s the amazing thing. We got very, very lucky. Okay, so we had to furnish these apartments obviously because the people being long term rentals, they were supplying their own furnishings. And that would have been really expensive except that we had a friend who is in the hotel business she she manages a local hotel and they were in the process of changing all of their decor and upgrading. So we were able to get most of our furnishings for all the apartments for free. So, you know, they were hotel casts off cast offs, but being that it was a higher end hotel. The furnishings were really, really good condition. And you know, you would think being a hotel that it may have a lot of wear, but they didn’t because It was a higher end hotel. And they, they were just changing it because to for them it was a dated decor. So, yeah, the only thing we had to really put out for was the mattresses because we didn’t want to use the hotel mattresses, and we just bought those off of Amazon. And, you know, for 200 to $300. Somewhere in there, delivered right to our door. They’re fantastic. We get lots of compliments on those.
Jae Seok An
Right. Okay, that’s that sounds good. And you’ve mentioned that now there are some regulation regarding the corona virus and you only can accept people travelling due to emergencies. And how does that affect your occupancy rate and price?
Michelle
Oh, well, we’ve we’ve slashed our rates for sure we snatched slashed our rates to almost half what they were and our occupancy rate is almost zero at this point. We are being Very, very particular about who we, who we allowed to come in, both for the safety of people who are already here and also to try and discourage this, this travel that seems to be happening all the time. So, we have right now, we have a young man who was planning on travelling before the pandemic gets, so he let his landlord know, I’m going to be travelling until the end of April. And then at the end of April, I’m going up north back to my job. So of course, his house was rented out, so he had nowhere to go. So we’ve rented to him. And then we have coming today, actually, someone from our utility, our internet utility and phone company. He’s coming here for repairs for work. So he’s going to be renting for about a week. So I mean, of course, that’s an essential service right now, especially in these times. So that kind of thing is what we’re renting for, you know, we’re being very proactive and very particular and turning away anything that isn’t necessary. Understood.
Jae Seok An
And how have you been doing your pricing before? before these Coronavirus?
Michelle
We we use wheelhouse and I discovered that fairly early on so we’re very fortunate that way had I not discovered it, we would not be making the amount of money we make. We would have left thousands and thousands of dollars on the table for sure. I’m still using wheelhouse but again, you know, I’ve just set my rates quite a bit lower. And it’s it’s been fantastic. I can’t say it enough good about wheelhouse. Right.
Jae Seok An
Finally, what lessons have you learned as an Airbnb host
Michelle
people don’t read
Yeah, it but I’ve learned that there, it takes all kinds to
make the world go round, I’ll tell you that. I’ve been shocked and surprised at a lot of things. I’ve learned that in order to run this business, you have to have a lot of patience. You have to have thick skin and big shoulders, and you have to be firm in your house rules.
When people ask for exceptions, that’s never a good sign.
It usually leads to trouble. So we’re just you know, very particular about who we let into our place because we were wanting to protect our units. But also, you know, there’s a lot of good people out there too. We’ve had people come and and just amazing people,
and they return. They return every couple of months. Of course, not now, but to It’s just been great.
Jae Seok An
All right. Yeah, that’s it about the podcast.
Michelle
Okay, thank you very much.
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