How to Make Extra Money Renting Out Space in Your Home

I’m sure you’ve heard this by now, but your home is not an investment. Owning a home is seen as a major accomplishment, but it may not help you get ahead financially. Most people that that buying a home is cheaper than renting. Plus, you can get tax credits and the opportunity to build equity.

However, if you use your home as a primary residence and have a mortgage, it’s not much of an investment.

Owning a home is expensive and when you first get a mortgage, most of your payment goes toward the interest and not the principal.

Personally, I’d love to get into real estate but I know that having my own mortgage won’t help me much. This is why my husband and I have been looking into house hacking.

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What is House Hacking?

House hacking is this cool term for basically sharing your home. To house hack, you can rent out a spare room or guest house. Or, you can purchase a multi-family property and live in one unit and rent the other(s) out. If you have a basement with a private entrance, this could be another opportunity to rent out space in your home.

You probably get the picture. It’s an interesting concept that could save you thousands in living expenses. House hacking can help you pay off your mortgage early, lower your overall cost of living, and even allow you enough cash flow to invest in more real estate.

Of course, you do have to make some sacrifices like giving up some of your personal space and dealing with roommates. One solution I like that serves as a compromise to house hacking is Airbnb.

Why I Like Airbnb

I like Airbnb because it’s a flexible way to make extra money with your home. You don’t have to commit to having a long-term roommate, and you can choose when you accept guests and who you rent out your space to.

If you’re not in the mood to have visitors stay in your home one weekend, you can turn off your listing and mark certain days as unavailable.

Of course, the earning potential of using this platform is also enticing. I’ve stayed in quite a few Airbnbs myself as a guest when I travel. Earlier this year, my husband and I stayed with a super nice mom in Long Beach. Her space was great and she was so friendly and accommodating.

She shared with us that she started doing Airbnb when her old roommate moved out. Our host loved getting to meet so many new people and renting out her spare room practically paid her mortgage every month and allowed her to stay home with her son.

She encouraged us to try hosting on Airbnb too and said it would be a great way to bring in some extra money even if we didn’t live in a tourist area.

What Others Are Saying About Airbnb

I’ve been researching becoming an Airbnb host for some time now and I reached out to a few other hosts to get their stories.

Jen Smith from Modern Frugality was nice enough to share her experience with me.

It’s just my husband and me in a 3 bed 2 bath and we felt we could be making better use of the unused space. I was nervous when we got our first guest so quickly because she had a bad review but she turned out to be a wonderful guest and I’ve been fine ever since.

The best thing is all the extra money (which I share in my side hustle income reports) we can put toward the mortgage and we love meeting new people every week. The idea of having strangers in your house seems weird to some people but we’ve loved opening our home to people and getting to know them. The worst part is all the cleaning. I put my minimum stay to 2 nights because cleaning up after several one-night stays were too draining.

Hosts can achieve Superhost status by hosting 10 times in a quarter and maintaining a certain review score. People can, and often do, filter out listings to only see Superhost homes so it builds trust and gets more frequent bookings.

There will be wear to the house so you shouldn’t be too attached to perfection. A guest left a stain on our couch that won’t come out. We charged her to have in cleaned and she paid but the couch was only $150 and we plan to get a new one anyways but I’ll probably wait until we stop hosting to get it.

I also talked to Paula Pant from Afford Anything.

I’ve been a landlord, earning money with long-term 12-month leases, for several years. I wondered whether not I would be able to earn more as an Airbnb host, so I figured I would give it a try.

Every turnover requires careful management. You have to make sure that the cleaners show up, that consumables like dish soap and sponges are replaced, and everything happens with in a tight time window. And if you’re traveling or out-of-town during a turnover, this management gets a lot tougher.

The best part was getting to meet people from across the country and the world. Every guest had a unique story.

I actually stopped hosting for a while because Airbnb hosting required a lot more work than traditional 12-month leases, but the payoff, in my specific case, was only an extra $600 per month above and beyond what that same unit could have earned on a 12-month lease. That seemed like too small of an amount to justify all of the additional management.

Finally, I talked to Shannyn from The Wonder Luster.

I became an Airbnb host after Hurricane Harvey as many evacuees needed a place to stay while Houston and the coast here in Texas were coping with the storm. We hosted for free at first for evacuees, and then people kept booking with me! I thought it would be totally weird to share my home with others, and it ended up not being the case. In the year I’ve hosted, I’ve never had a problem with theft or destroyed property, but that was my biggest fear!

The best part is truly the income and meeting people from all over the world. It has helped me pay for blinds, new hardware for the house and other projects to improve our home for guests and ourselves. The worst part has been when I get a booking and forgot to block off a day. You have to be aware of your calendar a few months out, and if your plans change and someone already booked, you can’t cancel without losing your Super Host status, so that’s been a challenge a few times!

Something I wish I knew when I started was that it’s important to take time to read through other Airbnb listings and see how they’ve written up rules and instructions. If you can, take a few trips to stay with other hosts in a listing similar to yours to see how things go. You can learn a TON from others instead of trying to re-invent the wheel.

What You Need to Get Started

If Airbnb sounds like something you’d want to try, there are a few things you need to consider before getting started.

A Room and Clean Space

This is an obvious one, but to earn decent money on Airbnb you need to have at least a private room to offer. I’ve seen some people in my area offering their living room couch as a space and I think that’s pretty weird. It’s taking the term ‘couch surfing’ to a whole new level and I wouldn’t want to rent there. Consider how many rooms you want to rent and what amenities might come with like a private bathroom or shared kitchen for example.

Basic Accommodations For Guests

You’ll need a comfy bed, sheets, towels, hangers, a hair dryer, and possibly even some basic toiletries for guests.

TV and Internet

You don’t have to offer this, but some guest will be looking for it and will be more inclined to book at a place that offers WiFi and/or a television in the room. We don’t have a T.V. in our spare room as of yet so we are thinking about buying a used one on the Facebook Marketplace.

Welcome Guide

This isn’t required, but I’d highly recommend putting together a one-sheet welcome page for guests to introduce them to your home and the area. You can include important details on the sheet like your contact info, the WiFi password, nearby restaurants and entertainment recommendations in the area. At the last Airbnb I stayed at, the host offered us a pass to the clubhouse on-site where we could visit the pool and grab free coffee in the lobby. These little perks can make a guests’ stay more comfortable and allow you to get more positive reviews.

A Lock and Key For the Door/House

Most guest like being able to lock the door when they’re away if you will be renting out a room or two in your home. This allows them privacy. It’s up to you to decide how you want to arrange for guests to arrive and leave your home during their stay. You may want to make an extra key, get a lockbox, or set up a security code.

Decluttered Space

Finally, you need to make sure your house is clear and decluttered. This can require the most time and effort on your end, but it’s worth it. You want your home to be welcoming, but you probably don’t want guests having open access to all your personal belongings including papers with critical documents, or wall hangings and memorabilia with personal information on it. Take the time to guest-proof your home and get it ready for guests before you set up your Airbnb listing.

How to Get Set Up as a Host

Ready to set up your listing? It’s super easy to get started.

Simply head to Airbnb’s site, and click on ‘Become a Host’ then ‘List Your Place’.

Next, you will answer a few questions to describe your home, the space you wish to rent out, how many guests you can accommodate in one booking, and so on.

From there, you can fill out a more detailed description of your place including what features are included in a guest stay, rules, your thoughts on the neighborhood, and so on. You should add clear images of your space.

As you create your listing, think like a guest. What would you want to see if you were considering staying somewhere? What is a must for you? Is there parking available? What features or amenities would sell you on the property?

Airbnb will need to confirm your address and some other details, but once that’s done your listing will be up and ready to go.

A Few Extra Tips

After doing a ton of research and interviewing Airbnb hosts, I came up with a few extra tips to help you get the most bang for your buck if you choose to rent out your home on Airbnb.

Take High-Quality Photos

Just like if you were looking at a home listing or a resort for a vacation, high-quality pictures will help sell the place. “Bright, airy, magazine-like images make your home look inviting, especially if you make sure nothing personal is in them,” says Kylie Travers, an Airbnb host abroad.

Offer Pricing Deals and Incentives to Book Longer Stays

Another cool thing that Kylie does to book quality lengthy stays is offering a welcome gift basket with coupons and freebies to anyone who stays for 3 days or more. You can also offer discounts on week-long stays if you’re looking to stay booked up more regularly.

I also heard that it’s a good idea to price your listing a little lower than competitors in your area, just in the beginning to help you get your first bookings. Pricing low might alarm people or lead them to think something is wrong with your property so be sure to write in your description that you are offering a special discount for a limited time.

Ask For Reviews

High-quality reviews will improve your booking rates and also bump up your listing in the search results. Don’t wait around for reviews after someone checks out. Be sure to ask them for one while the experience is still fresh in their minds. Airbnb will do a good job of reminding guests to review your property after their stay as well. One thing you can do to push things along is review guests as well in the hopes that they return the favor by reviewing their experience at your place.

Think about the star experience, what level do you want to offer and how can you go above and beyond to get great reviews and bookings. Make something about your place unique.

As you can see, Airbnb is a pretty awesome way to make extra money with your home. It’s one way to turn your home into more of an investment and it’s how we’re planning to pay our mortgage off early. If you think this is something you’d like to try, use these tips and instructions to set up your listing. You never know how much money may end up making.

Have you heard of Airbnb or used it as a guest? Would you ever consider hosting with Airbnb? Why or why not?

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