Last updated on September 8th, 2020
In this episode, we have had a chat with an Airbnb host from Oakland California. His name is Ansel and he owns one mobile house. Here are Some quick facts. He has been achieving above 90% occupancy rate. He makes about $20,000 per year from a mobile house which is valued around 40,000. It’s an incredible return on investment.
| Summary! |
|---|
| How he got started with Airbnb rental 0:52 |
| Occupancy rates & and his experiment with different pricings 2:34 |
| Revenue is around $3,000 13:15 |
| Net profit is around $1,700 14:13 |
| How much would it cost to buy a tiny mobile like this in Oakland. 17:08 |
So tell me, how did you get started with running your rental on Airbnb.
Ansel 0:58
So one of the things That when I started I I was focused on the tiny house because I knew that nobody else had a tiny house in my area like an actual tiny house on wheels, the car you see on TV, and the thing about my location is that it’s not the ideal location there’s not a lot of places to to go either on bars. So if you’re looking for location most people would rent in another area right? So I asked myself what what else can I do to not necessarily compete but set myself apart? Because I’m dealing with the location issue. Now. I never had any issues with bookings, but I wanted to raise my price. So what I did was I did some research and and I determined that my tiny house needed to be Instagram bubble, right. I needed it to be Be a place where people wanted to take pictures, pictures, pictures, pictures. Now they already took pictures, because it’s a tiny house. But I decided to redesign my interior. I put up artwork, I painted for walls, new furniture, and I made it made it pop, right. I wanted people to say wow, like I really wanted to blow people away. And so when I did that it worked. To where I was, I was able to go from $60 a night to 90 a night.
Occupancy rates of his Airbnb listing in Oakland (CA) & and his experiment with different pricing
Jae Seok An 2:34
Right? Right and feature was it? Excuse me what year yeah 2019 right. So that’s when you first listed your that tiny house on Airbnb. 2018 is when I first listed it, right?
Ansel 2:52
And then a 2019 is when I remodelled it and then I raised the prices. I’ve been a super hostess My first evaluation period that was that was pretty easy because I do a lot of really big on cleaning and I only have one listing. So it’s easy for me to control quality control. Right, right. And once once I did that my occupancy rates Well, I could I could run at 100%. But I did more research and I realised that it’s better to have those higher price bookings. And, you know, if you’re, if you’re at 100% occupancy, your price is too low. That’s what they say. Right. And so in doing that research, I was able to, even when I raise the prices, people would still book so I kept raising the price right? In trying to find that sweet spot, but I never used any of the automated price. I never use any of the tools like the Airbnb has a tool And then there’s a, there’s a couple other platforms where they’ll adjust your price for you, I forget what they’re called. But out because I only had one listing, I wanted to do everything myself. And I also because I work full time as well, right, and I have a son, I didn’t want to overwork myself with cleaning because I didn’t outsource my cleaning. Because I feel like that was one of the things that would have really, really, really, really wanted to maintain my my five star rating. And I was afraid that if I hire someone, they wouldn’t clean it. The way I would think about entrepreneurship is sometimes you have to get out of your own way. Right? If you want to scale up, you have to outsource things. And because I wasn’t in the process of scaling, I never outsource my cleaning. So I increase my minimum, my minimum nice day, right and when I did that, It made it easier for me.
But then
my son’s mother, she had resigned from her job. And she had, you know, a lot of free time. I said, Hey, do you want to, you know, help out with the Airbnb? And she said, Sure. So then I went back to, to allow one night bookings, but I raised the price, right? So if you’re going to book one night, raise the price. If you booked for more nights, there’s going to be a discount. But to my surprise, people were booking at that ridiculous price.
Jae Seok An 5:35
Right? So what’s the discount that you’re giving if people book for more than a diet?
Ansel 5:42
at that? Well, right now it’s different, right? COVID-19 but at that time, I was, I want to say like 20% 15 10% so it wasn’t a lot, right. But I wanted to make it you know how to do it. value because a lot of people are looking for price, right? There’s some people that want to try a tiny house. And then there’s, you know, avid travellers, they’re trying to look for the best price. Right, in a clean space. So it was that it was that balancing act, you know, wondering, are people coming to me for the price? Or are they coming to me for the experience? Right. And I determined that the experience that I offer superseded price, right there were there was the market allow for a lot of people who really want to try out a tiny house, right. So people who are looking to save money. I didn’t have a problem because there were so many people travelling to San Francisco to the Bay Area. We have so many people travelling that that I didn’t have to worry about. I kept figuring out that I can continue to raise and raise and raise and then I got I got featured in the local news. They did a story on my tiny house. So I was able to raise the price again.
Jae Seok An 7:06
Right? So how much did you raise? Like?
Ansel 7:11
So I was at the highest that I went per night was 130 and night for days where there was like an event, because I told you, I’m next to the Coliseum. So for like concerts and stuff like that, that’s why we’re but on average, I was between 90 and 100. And remember, I started at 60.
Jae Seok An 7:34
Right, right. So when you’re at 9200, how much of the occupancy rate is you managed to get?
Ansel 7:41
I want to say I was at about 90%. occupancy.
Jae Seok An 7:44
Well, still, you’re at that. Yeah. Yeah. Why don’t you increase even further?
Ansel 7:51
We said why didn’t there? Yeah.
Jae Seok An 7:54
COVID-19. All right. So you’ve been increasing and increasing and then the pandemic hits. Yes, yes. Okay, so what’s your currency trading now? Because I had a look on your calendar and similar night or
thousand dollars a night. Next?
Ansel 8:11
Well, the reason why I did that is because, well, I’m in the process of deciding do I want to shift to long term,
Unknown Speaker 8:23
right?
Ansel 8:24
Or do I want to stay with short term I’m definitely not doing any one or two, I think it’d be my minimum is going to be at the minimum, five or seven days. But because of the pandemic, I bought an ozone machine and ozone machine is supposed to kill anything in the house is very toxic. You can’t run it, whether it’s you know, plants or animals or anybody inside the house. But if you run the machine, it will kill anything and then you have to air it out. So I want to give myself at least three days between guessed right. And I also wanted to give myself some time to figure out what’s going to happen. So the reason why I set it at 1000 is because I don’t want to block off my calendar because I still want it to show up. And people searches, but I know nobody’s gonna book it right. So I still have people looking at it like, what the hell? Why is this $1,000 and they can feel send me a message and inquire but this is just to give myself time to really look at the market and decide which way I want to go because I really, really like Airbnb. And then I can easily put a long term tenant in there outside of the platform. Right But um, I like the platform a lot and I’m in the process of becoming an Airbnb plus, right. They started to actually have my inspection day was supposed to be this week. But the lady who was scheduled to do my inspection for Airbnb, she got laid off. Oh, so I don’t know what’s happening that Airbnb. But they laid her off. And I made all these improvements You know, there was only a few they only asked me to do a couple things to make it Airbnb plus already. Yeah, now I’m wondering like what’s going to happen with the plus programme? Because I don’t know. But the reason why I put in 1000 tonight is because I want to I want my calendar to be clear whenever I decide to you know, whenever I’m whenever I’m going to do so I still have a couple people holding on and I’m giving full refunds if they can’t if they ask me soon enough, but if they wait to the last minute because my my, my cancellation policy has is strict. And I I set it as strict because I don’t want people to book and wait to the last minute and then cancel. And you know, I only have one listing. Right, right. So now I have five days to try to fill that slot. It doesn’t work for me. Because I am confident that my listing is so cool. It has that cool factor Instagram factor that strict. It never stopped people from booking. Right. But for the people that booked in I had it set to strict. I’m still honouring those full refunds, if they can’t if they if they contact me with Apple time, you know, but some people don’t want to cancel, they want to wait. So I said I won’t be able to honour the full refund if they cancel at the last minute, right, but if they want to cancel now, I don’t know those refunds.
Jae Seok An 11:37
Right? I see. Yeah, you’ve mentioned that you were in the process of keeping increasing the price to like see what’s the sweet spot of the open rate versus price. Are you planning to do that again when the pandemic over? Yeah, as
Ansel 11:57
soon as the pandemic hit, I immediately drop my prices, right as nobody travelling, so I looked, I dropped it really, really low. Because you know, that’s just the market, right? If you want to get booked, right got to drop those prices when when the pandemic ends hopefully soon. I’m going to go by the market, right? I’m going to, you know, basically I’ll start off low, and then and then it is getting booked quickly, then I’ll raise it right. Because we don’t want to be at a I don’t want to be 100% occupancy. And then also because I you know, it’s on my property where my house is right next to it. And it’s kind of good to have a few days where I can do some deep cleaning, or just not have you know, guests coming because every time I have guests, I’m kind of on edge, making sure that things are perfect. I want them to you know, I’m really you know, serious about my ratings. So, I’m always making sure that they have everything they need. I give a lot of extra stuff. frozen food, instant ramen, water. Beer, I give a lot of extras because I really want them to have a really good experience, right? something different than the normal, right?
His Airbnb’s revenue is around $3,000 per month
Jae Seok An 13:15
Yeah, I see. When you said you had like a 90% occupancy rate, then at like hundred dollars per night, that’s around $2,700
revenue per month.
Ansel 13:31
And also higher.
Jae Seok An 13:32
Or even higher than that. Yeah. Including the light cleaning fees with additional gas. Yeah, yeah. Right. So how much was it around?
When you’re at the pink?
Ansel 13:45
I will say 3000.
And that wasn’t even 100. Right. A couple of days blocked off. Right? Yeah. And the know how much can you earn if you put that into the Long Term rental in that, oh, I will only be earning, you know, maybe maybe 12 to 1300 a month, like, you know, less than much less than 50%.
Jae Seok An 14:13
Okay, so like after $3,000, like how much of them? Are you spending on, like painting pay for the cleaning fees paying for supplies?
Ansel 14:24
I would say
I would say
about about 1300.
Jae Seok An 14:35
About 1300. So that’s around 1700 after like everything right, right. Yeah. Which is still higher than Yeah, much higher long term rental. Okay. Mm hmm. Are you thinking about like running a few more Airbnb properties because you’re doing well?
Ansel 14:53
I am exactly I’m actually going to buy another tiny house. I have. I have space on my property for two more tiny house. Okay, yeah. So and then I also have a studio I converted my garage into a studio. So I have a long term tenant in there. She’s a long term tenant. They’re a tiny house Airbnb and and I can get two more half space for two more tiny houses. So I’m definitely planning on doing that. I’m just waiting for the market to see you know, I want to get things at a discount, right? now’s a good time to buy stuff at a discount. But I also want to see what’s going to happen with travel. Right?
Jae Seok An 15:32
So yeah, so about the two of two houses that you’re thinking of by easy like we’re in the same building as your house.
Ansel 15:40
Yeah, but these are gonna be smaller. So mine is a my tiny house is 25 feet long, right? lumen, there’ll be 14 feet long. And then they’ll also have composting toilets, right? So it’s gonna be a little different.
Jae Seok An 15:54
Right? So are you we I don’t really get it. So are you buying the new
house? Or is it our already waiting you’re building.
Ansel 16:02
Oh, so yeah, I’ll be buying the tiny houses. They’re on wheels. They’re on the trailer.
Jae Seok An 16:07
Okay, yeah, so moveable house?
Ansel 16:11
Yes. Yes. They’re on wheels. They’re built like a regular house, but they’re on trailer. So we buy it, and then they deliver it and then I park it.
Jae Seok An 16:20
Right. Wait. So this house that you’re renting on right now is also the movable house.
Ansel 16:27
Yes. It’s a typo right
Unknown Speaker 16:29
there. You meant
Ansel 16:31
tiny house on wheels.
Jae Seok An 16:32
Yeah. Okay. Wow. Right.
Like, how does that
work? Do you have to also buy the right to like,
Ansel 16:39
park? No, no, no, it’s not my it’s not my property. So technically speaking my neighbor’s there was a time where they could they could petition the city to say that it’s a blight, you know, an eyesore yet, but I don’t live in that type of neighbourhood. As a matter of I have a nicest house in my neighbourhood. And my neighbours love me. So it’s not a blight per se.
Jae Seok An 17:08
Okay, and so do you mind sharing how much it would cost to buy a mobile like tiny house like the one you have.
Ansel 17:17
So mine’s right now probably be the one that I have right now probably 50,000 maybe a little less because of the market. And also depends on where you buy it. Like where in the United States where you buy it from, because things are cheaper on the east coast and down south and I’m on the west coast in California where the cost of living is more expensive, everything’s more expensive. But right now, I can get a 14 foot for 18,000 and possibly less if I do some of the work if I tell them you know, don’t paint it. Don’t you know, if I just get the shell and I tell them you know, I want to do the cabinets and stuff and can be cheaper. So I will be able to add two more listings for about $40,000.
Jae Seok An 18:08
Wow, that’s really a great return on investment because yeah, making around $20,000 per year.
Ansel 18:15
It cost me 35,000 to buy at the first one. Yeah.
I can’t think of any any other ROI like that.
Jae Seok An 18:24
Yeah, that’s, that’s really crazy. Yeah. Yeah. Finally, what are the top challenges about running Airbnb with the tiny house with the mobile house?
Ansel 18:38
I say that the, the challenges are
cleaning in and because it’s a smaller space. You really have to make sure you have to get into the tight spaces and clean right it takes a little while. It takes a little longer to clean. It I say about about a minimum two hours.
Jae Seok An 19:07
Right?
Ansel 19:09
Unless you’re rushing, right.
But I don’t have anything to compare it to, I would say cleaning. And
other than that.
Yeah, that’s the only the only challenge that I’ve had is, you know, making sure that I
Jae Seok An 19:26
give myself enough time to clean. Okay. Yeah. And then. Yeah, that’s it. All right. Yeah. I think you’ve got a really, you found a really nice,
good investment vehicle. Absolutely.
Yeah, that was it about the interview. Okay.
I appreciate you. Your appreciate your time interviewing me. Yeah. I thank you so much for sharing your story. And thank you for being on here. All right. All right. I’ll talk Do you agree? All right, thank you. Have a nice day. Bye bye, YouTube.
